Mr RAMSEY (Grey—Government Whip) (18:55): I’m addressing the Minister for Energy and Emissions Reduction, who knows my electorate well. I come from South Australia, and he would know that 60 per cent of South Australia’s electricity last year came from renewable energy, which is quite an achievement. In fact, there has been huge investment across South Australia in wind and solar, both large and household. More than 290,000 households now generate around 12 per cent of annual consumption, at a peak of 1,400 megawatts per hour when it’s fully functioning. But largely that supply of renewable energy and the ability to absorb it into our grid has been maxed out.
AEMO has passed an upper limit on wind generation in South Australia of 1,300 megawatts when there is 2,053 megawatts of wind energy already installed in South Australia. So sometimes when the wind is quite brisk and you know that the demand is high, or at least moderate, you can drive around and see these wind turbines already switched off. The reason that AEMO has to do that is that the grid becomes unstable with that much fluctuating electricity and that there’s a strong need to keep the gas generators that supply baseload electricity chugging over and supplying the bottom line, if you like.
It’s interesting that investment in new generation continues at speed across South Australia when investors know there is an absolute limit at the moment. At the moment at Lincoln Gap there are another 86 megawatts of wind going in, and at Port Augusta in another project another 320 megawatts of solar and wind are going in, knowing full well that the market—for South Australia, at least—is already saturated. I have spoken to some of the companies involved, and they made their decisions based on the back of the decision of the South Australian and New South Wales high-voltage electricity movers to build a new connection between South Australia and New South Wales. It’s going ahead. It’s been announced. There’s an 800-megawatt interconnector going in. It will hook up South Australia to Snowy Hydro 2.0, and that will provide a new market for new generation in South Australia, and it will also provide more stability back into the South Australian grid.
The fly in the ointment here is that, the more diversity you have in your electricity grid, the more stable it is and the more reliable it is. But, in fact, there are still times when you need to, virtually, fully back up that grid. The government made recent announcements about an 1,000-megawatt capacity to replace Liddell, and there was much made of the fact that it will only generate two per cent of time. The more that you have renewable energy, the more that you actually need the plug to fill in the gap when renewable energy is not available, even though it is on a smaller and smaller time scale that that plant will be operating.
Thank you very much to the minister, who has put some money into the development of pumped hydro possibilities in South Australia. We have more renewables, and things are generally going pretty well. I’m very interested in hydrogen and the fact that the minister and the government have announced as part of the budget an extra four sites, which will give us five hubs around South Australia. It’s worth noting that even at two kilograms—and that is the aim of the government investment—it is still about four times the price of coal when it comes to generating electricity, at least in direct forms, which is slightly less of a margin on gas. Some of the great possibilities in hydrogen lie in the transport industry, where $2 hydrogen is more than competitive with the diesel price of $1.50. It’s just how we get to this $2 hydrogen and how much of it is a renewable in the first instance.
I’m very pleased that the minister found the time last week to visit Moomba, which I think will be the site of one of the world’s most efficient carbon capture and storage projects. The government has invested $15 million there. I ask the minister to update the chamber on how the government is providing affordable, reliable energy to families and businesses like those in my electorate of Grey. Can the minister outline how we’re doing this while at the same time, importantly, reducing emissions?