SA to spend $500m on Australia's largest battery storage and gas-fired power plant – as it happened.

The main points of Jay Weatherill’s energy plan:

• Building of the largest grid-connected battery in Australia to store energy, funded by a new renewable technology fund.
• Construction of a government-owned 250MW gas-fired power plant to provide emergency back-up power and system stability services for South Australians.
• Introduction of new ministerial powers to direct the market to operate in the interests of South Australians.
• Incentivisation of increased gas production to ensure more of the state’s gas is sourced and used in South Australia.
• 10% royalty stream for landholders for access to conventional and non conventional gas reserves.
• Creation of an energy security target to require a proportion of power used within South Australia is generated within the state.

The reaction:

• The Australian Energy Council says at its core, it is a good plan but now the federal government needs to have a national plan. Matthew Warren also foresees a few problems over the ministerial power to intervene with the Australian Energy Market Operator.
• Greens groups and the Greens party are disappointed at the plan’s reliance on gas but they like the battery storage and grants for renewables. Greens members Adam Bandt and Sarah Hanson Young were hoping for assistance for solar thermal in Port Augusta to transition a coal town to solar.
• Remember the federal government spent the summer responding to the blackouts giving the SA government a bollocking on their high renewable energy target of 50%? Weatherill recommitted to that target today and said his plan would fit with the objectives of the chief scientist, Alan Finkel, who originally favoured an emissions intensity scheme (carbon price). The premier also favours an EIS.
• Weatherill said: “If Malcolm Turnbull tomorrow recovered his memory and decided to go for an emissions intensity scheme, we would be ready to cooperate with him and our scheme would fit perfectly into those arrangements.”
• No federal Coalition ministers have been sighted on this plan.

Thanks for your company.

See you back here next week for the parliamentary sitting.

Good afternoon.

Actually, one more thing

I have to bring you more details regarding the royalties for landholders who let gas companies on to develop the resources.

The SA government is providing $24m for a second round of funding to encourage companies to extract more gas and create more jobs.

This new round will open immediately.
The government has committed to give South Australia first dibs on the SA gas.

A new royalties return scheme will provide 10% of royalties to landowners whose property overlies a petroleum field which is brought into production.

Olivia Kember, head of policy at the Climate Institute has echoed the Australian Energy Council’s comments on the need for a national approach.

The acute problems in our energy system demand rapid responses, but without a nationally consistent plan there’s a risk that state actions could cause more problems in later years.

Given the decades-long failure for national energy bodies to cope with the changes underway in the electricity market, it’s understandable that SA is stepping into the vacuum to solve its immediate problems, but it’s not the best way to run an energy system.

These triage responses to energy crises will keep occurring until we develop a nationally consistent, long-term strategy for our energy system that addresses energy security, affordability and the need to reach net zero emissions before 2050.

Lastly Matthew Warren of the AEC says, whatever the attributes of the SA plan, hopefully it will kickstart the federal government. In other words, rise off your derriere, Malcolm.

Will this kickstart the federal government’s response?

We are all hopeful. We have been asking and the chorus of voices across the economy is agreeing. We need a national plan. We need both major parties to get together and we need certainty. It is no good if we keep running [at] elections and having different plans introduced by different governments. We need this.

Matthew Warren of the Australian Energy Council is also wondering how the new beefed-up ministerial powers will work with the Australian Energy Market Regulator.

Warren gets the battery. That is a tick.

He gets the gas contracts. That is a tick.

But SA probably can’t build a large power station before next summer – more likely the summer after that 2018-19. (I think Weatherill did say it would be a stretch.)

Anything they can do to provide greater firmness to the South Australian grid is welcome. We are concerned about how you would apply two different drivers of the car.

If you have the state government intervening and running the grid sometimes and the market operator running the grid. It is like two people driving the car at the same time and we don’t know how that will work.