Analysis of SA-BEST Energy Policy compared to Liberal and Labor Energy Policy for the 2018 SA Election

? John Noonan 2018

March 17 is a day of significance every year for the Irish, it is St Patrick's Day. For South Australians in 2018, it also happens to be a significant day for another reason. Saturday, March 17, 2018, is the day when SA voters get to decide which political parties will make up State Parliament for the next 4 years. For the first time in SA history, there is a genuine three-way tussle for a majority of seats. SA-BEST is standing candidates in 36 of the 47 lower house seats. There is a mathematical possibility, however remote, that SA-BEST could have candidates successfully elected in more seats than either of the two traditional parties.

SA Energy Reality Prior to the 2018 March SA Election

In the last 4 year term of Parliament, Premier Weatherill's SA Labor government has presided over a shocking level of mismanagement of SA's Energy Strategy. Labor's negligent mismanagement of SA's Energy Strategy, has delivered:

1. An SA Region Wide Blackout on Wednesday 28th September 2016.
2. Rolling Blackouts on Wednesday 8th February 2017.
3. A spending spree on two counter-productive Infrastructure investments. The first, a Big Battery at Hornsdale Power Reserve (HPR), reputed to cost the SA Taxpayer somewhere around AUS$40M, a magnificent investment for South Australia. The second, 9 x Diesel Fired Generators, reputed to cost the SA Taxpayer somewhere between AUS$339M to more than AUS$700M, a disastrous investment for South Australia. They will probably never be used for anything other than routine testing, or at best, support of other mendicant Coal-fired States like NSW and Victoria. They may be useful in Heat Waves, maybe once or twice a year for hours at a time, as NSW and Vic's creaking, ageing, filthy Coal-fired Power Stations fail under pressure. The 9 x Diesel Generators will be of no use or financial return to the SA Taxpayer who was forced to pay for them by Labor.
4. Lack of competition in Gas and Retail Electricity Markets in SA leading to the highest Retail Electricity Prices in the world. This is SA's most pressing tactical Energy problem. Every SA Business and Resident is being exploited, ENRON Style, by the privatized Gentailers like AGL and Origin on the one hand, and by the Chinese owned Transmission and Distribution Operators on the other, who focus on getting SA to "Gold Plate" the Transmission and Distribution Networks.
5. Blackouts in Operating Theaters (during medical operations on patients) of the most Expensive Hospital Building in the world, the nRAH. The construction of this Hospital has been so poorly managed by Labor's Treasurer (Koutsantonis) that it will cost SA at least AUS$11.9 Billion by the time it is paid for. More than twice Labor's disastrous 1980's State Bank Debt. To make matters much worse, the building is not fit for purpose. With a litany of horrors unfolding in 2018 as SA's Health Professionals try to cram patients into a building too small for SA's seriously ill. Under a failed system introduced by Weatherill and Labor "TRANSFORMING HEALTH", seriously ill South Australians requiring hospitalisation will suffer and be forced back on the streets until "TRANSFORMING HEALTH" is eradicated from SA's Health System.

One of the deciding factors in the 2018 SA Election is Energy Policy. All SA residents and/or businesses are suffering from the highest Electricity Prices in the world in 2018. Retail Electricity Companies are promising only that prices will rise further. It is impossible to understand why Retail Electricity Prices should rise further in SA. Retail/Generation Companies (Gentailers) are making obscene profits. Gentailers have built no new SA fossil-fueled Generation infrastructure since ETSA was sold off by the Olsen Liberal Government, when SA's Electricity was the lowest priced in the world. When SA elects a new Government on March 17, 2018, Energy Policy for any new Government must be a key deciding factor as to who wins power.

Liberal and Labor Energy Policy Election Promise Analysis

As SA approaches March 17, 2018, both Liberal and Labor are making significant competing Energy promises. The following rudimentary analysis is based upon promises repeated in the Leader's Debate hosted by the ABC on the evening of Monday, March 5th 2018.

Liberal Energy Promises:

The SA Liberal Party are promising to contribute AUS$200M to an Inter-connector to the NSW NEM Region. This sum represents at best 10% of the cost of construction of an SA/NSW Inter-connector. The costs of an SA/NSW Inter-connector could reach AUS$5 Billion or more. SA already has two (not 1 but 2) Inter-connectors to Australia's east coast via Victoria, the HVDC Murraylink, and the AC Heywood. THE SA REGION OF THE NEM DOES NOT NEED A THIRD INTER-CONNECTOR TO NSW.

This proposal is just more "Gold Plating" of the Transmission Grid to the benefit of Chinese owners of Australia's Transmitters. Paid for by the (confused) Australian taxpayer. The AUS$2-5 Billion needed for this 3rd Inter-connector would be much better spent on multiple new Public hospitals for SA to fix Labor's disastrous nRAH screw up. Note Labor, nRAH should have cost no more than about AUS$1-2 Billion, like the 1600 bed Queen Elizabeth University Hospital in Glasgow built from 2011 - 2015. not AUS$12 Billion for 600 beds built from 2011 - 2017 through your shocking mismanagement!

The SA Liberals are also hamstrung by the Federal Coalition's addiction to Coal and on-again-off-again relationship to a so-called Energy Strategy "The NEG". "The NEG" resulted from the Federal Coalition's refusal to accept the advice of Australia's Chief Scientist for a NEM strategy. Morrison prefers to take his advice from his Head of Department, a former Minerals Council of Australia Coal Lobbyist.

In a vain effort to convince South Australians that the SA Liberal Party is not anti-renewable, the Liberal's have released an election promise around Residential Battery subsidies. If the Liberals are committed to this promise it is a good thing. At the same time, the SA Liberals have proposed removing the SA Renewable Energy Target. The SA Liberal Party is conflicted on Energy Policy prior to the March 2018 Election. Liberals have no strategic Energy Policy for SA.

A potential SA Liberal Energy Strategy is to bait SA with a Residential Battery subsidy to win power and switch to the Federal Coalition's as yet undefined "NEG" post election. "The NEG" appears to be nothing more than a Federal Coalition Political strategy designed to continue the use of "East Coast" coal-fired Power Stations well beyond their use-by date.

The SA Liberal Party is a party that expects to win SA government simply because Labor has been in for 16 years and has dropped the ball. The SA Liberal Party believes that in 2018, it is their turn to replace Labor Snouts with Liberal Snouts in the trough. If that happens, SA's Energy crisis will not be resolved, it will potentially be made far worse if indeed the Liberals go back on their Battery promise and proceed with an AUS$2-5 Billion SA/NSW Inter-connector.

Labor Energy Promises:

Labor is in a disastrous situation in early March 2018. The future of Labor is under a cloud. Fresh from the announcement of yet another scandal that would bring criminal charges against accountable Politicians in most other States and Countries. The Oakden Report by The Honorable Bruce Lander QC, the Independent Commissioner Against Corruption (ICAC), would have seen any other leader with integrity, resign their position. But not Jay Weatherill, he wants another term in parliament. The gall of this man and this party is sickening.

Labor's Election promises on Energy appear to be fabricated to try and distract South Australian's from outrageous scandals associated with Labor's mismanagement of SA while in Government. Scandals such as (i) The outrageous mismanagement of the construction of the nRAH at a price of at least $11.9B. More than twice the State Bank Debt for a building which is unfit for its purpose. (ii) Oakden. (iii) Transforming Health and mismanagement of essential hospitals such as nRAH, Flinders, Lyell McEwin, tQEH, Modbury and the REPAT, and disastrous services like EPAS. (iv) Government Policies that allow SA Government's Shared Services to charge hard working public servants just to get their pay. (v) The most aggressive privatisation push of any SA Government in history with the sale of Government Agencies such as The Motor Accident Commission (MAC), the Lands Titles Office (LTO), the South East Forests, the privatisation of nRAH by placing it under a Public Private Partnership, the sale of Glenside, Hampstead, and the Repat hospitals, and the list goes on.

The comprehensive list of the Labor Government's mismanagement scandals is far too long for this Energy analysis. Whether through (lack of) personal integrity, or (lack of) accountability under the Westminster system of Parliament. Accountability is ignored by Weatherill and the Labor Government. Weatherill must be reminded of the quote on the plaque on President Harry Truman's desk, "The Buck Stops Here".

In the lead up to the release of the Oakden Report, Labor released a barrage of Election Promises around Energy. These promises appear to be a sugar hit, attractive at first and distracting from Labor's scandalous mismanagement of SA. Major questions are raised about the ability for SA to fund Labor's rambling, almost never-ending Energy promises. Labor has no Energy Strategy for the State of SA, just a series of thought bubbles. A thorough analysis of how low SA's economy has sunk in response to the Labor Govt's mismanagement is identified in the January 2018 Economic analysis by Associate Professor Michael O'Neil of the University of Adelaide Centre for Economic Studies. This independent review of SA makes for very sorry reading. It paints the Labor Government's mismanagement of SA in stark contrast to Labor's own claims.

The question remains, how does SA-BEST, the third alternative for Government, or at least the balance of Power, differentiate itself from the two Traditional Parties on Energy Policy?

SA-BEST Energy Policy Objectives

SA-BEST's Energy Policy is fundamentally different from Labor and Liberal Election Promises. SA-BEST's Energy Policy is based upon a long-term vision and at least 10 year Energy Strategy for the State of SA. Objectives of SA-BEST's Energy Strategy are clear:

1. Over a period of 10 years and by no later than 2030, introduce competitive tension into the SA Wholesale and Retail Gas and Electricity Markets so as to reduce SA's Energy Prices (Gas and Electricity) back to the lowest in the world. This objective is achievable. SA used to have the lowest Electricity Prices in the world when ETSA was SA government-owned and operated, prior to the Olsen Liberal Government sale of ETSA.
2. Encourage the establishment of a Battery Electric Vehicle (BEV) and Renewable Energy Generation and Storage Manufacturing Industry in SA. This can be done by legislating to make SA the most attractive location in the world for BEV and Renewable Generation and Storage Manufacturers to establish themselves. This can also be done by legislating for people to purchase and use BEV's and Renewable Technologies in their homes and businesses. This will only succeed if SA is successful in re-making Electricity Prices in SA the lowest in the world (see Objective 1).
3. Develop a World First Government owned "Not For Profit" Energy Generation and Distribution Utility and Retailer (cETSA) and Infrastructure owner with assets predominantly behind the meter or "Demand Side". cETSA will be a world leader in driving innovation in Renewable Energy Generation and Storage as well as community distribution grids behind the meter. cETSA will also invest wisely and selectively in "Supply Side" Utility-Scale Storage and Generation to complement its "Demand Side" Infrastructure and to generate greater Wholesale (among NEM Operators) and Retail (for consumers) competition in the SA market.
4. Develop a Manufacturing and Export Industry built around Generation of Hydrogen from Electrolysis. Develop Policy that has the long term goal of 100% replacing Gas Fired Power Generation by 100% Hydrogen Fired Generation for any Industrial generation requirements that cannot be met by other Renewable Energy Generation and Storage requirements. Legislate to transition away from a Residential Gas Network to the use of highly efficient Residential Electric Heat Pumps for heating and cooling and Electrical Induction cooking. Develop a strong Export market in Hydrogen to Asian and other Economies that cannot satisfy their own Energy needs through Renewable Generation and Storage.

SA-BEST's Energy Strategy for SA

1. SA-BEST: Creating SA Competitive Gas and Electricity Markets

The SA Region of the NEM is unique on the NEM in that all Major SA Power Stations are Gas Fired, in the order of 2.7GWatts of generation capacity in total. The 9 x aeroderivative Diesel Generators purchased (foolishly) by Labor, run duel fuel and are planned for conversion to gas (from Diesel). Consequently, the most important Energy Strategy component to implement for SA is a Domestic Gas (DOMGAS) Reserve Policy, similar to one that is already in place in WA (since the 1970's).

Specifically, SA needs to legislate for at least a 15% Domestic Gas Reserve (same as WA) from Moomba, or any other Gas Producing Assets within its boundaries, onshore or offshore. This will reduce the price of SA Gas to the SA market by at least 50% if not more. The result is that SA Gas-Fired Electricity Generation will become 50% cheaper overnight. It will also be cheaper than transmitted East Coast Coal-Fired Electricity Generation in both SA and on the East Coast NEM as is the case everywhere else in the world in 2018.

An SA DOMGAS Reserve Strategy makes a new NEM Interconnector with NSW totally redundant for SA's Peak electricity requirements. NSW needs an Interconnector built to access SA's cheap Gas-Fired and Renewable Generated Electricity. If NSW needs it, then NSW should pay 100% of the cost for any Interconnector(s) with SA. An SA DOMGAS Reserve Strategy also makes the construction of LNG Import Terminals on the East Coast of Australia redundant saving AUS$Billions which could again be put into building SA Hospitals.

The Australian east coast is unique in the world in 2018 to find itself in a ridiculous situation whereby Transmitted East Coast Coal-Fired Power is cheaper than local SA generated or East Coast Transmitted Gas-Fired Power. This situation is created by a total lack of State and Federal Government regulation of competition in the Gas and NEM Electricity markets on the East Coast of Australia NEM (not WA). Regulators like AEMO, AEMC, AER and the ACCC have been as incompetent with the Energy Industry as Regulators were with Australian Banks prior to the Royal Commission. Price fixing of Wholesale and Retail Gas and Electricity Prices is illegal, where are you ACCC?

The Australian East Coast NEM markets are non-competitive privately owned monopolistic ENRON style CARTELS. The ENRON style CARTELS are created by Gas and Electricity Gentailer companies due to State and Federal Government mismanagement of Energy Strategy and (lack of) regulation of the NEM regions. This lack of Energy Strategy and regulation means Australia's East Coast NEM is the only Electricity market in the world where Gas-Fired Electricity costs more than Coal-Fired Electricity. Australians on the East Coast are in the ridiculous situation where Australian Gas can be purchased cheaper in Tankers from Japan than Australians can get Australian Gas from Australian Gas pipelines on the East Coast of Australia. At the same time as Australia becomes the largest LNG (Gas) exporter in the world in 2018.

This ridiculous ENRON style CARTEL must be resolved for SA to get the price of Retail Electricity back down to the lowest price in the world. SA-BEST will force the application of SA DOMGAS Reserve Legislation. This will create an LNG investment boom in new Hydrocarbon exploration and development in SA. In a similar way WA's DOMGAS Reserve Legislation, first introduced in the 1970s, underpinned WA's massive LNG Infrastructure Investment boom since the 1970s.

SA-BEST is the only party at the 2018 SA State Election identifying that an appropriate Domestic Gas (DOMGAS) Reserve must be legislated in SA. We will break the "Regulatory Capture" stranglehold of the mostly foreign government and privately-owned Oil, Gas, Coal and Mining companies on SA State Government.

2. SA-BEST: Transition to 100% Renewable Energy in SA by 2030

SA must transition to 100% Renewable Energy Generation and Storage as quickly as possible, with a goal of reaching this objective by 2030. The Australian Federal Government from John Howard on, compounded by the East Coast and Southern State Governments, have shown a total absence of sound and sensible regulation of Australia's East Coast Energy markets for both Gas and Electricity. In this vacuum of regulation, the ENRON style greedy and unconscionable CARTEL behaviour of Privatised Gas and Electricity Monopolies (Gentailers) in SA and Australia can only be tempered by two government actions.

1. Government stimulation of serious competitive tension in the Gas and Retail and Wholesale Electricity markets.
2. Regulation and prosecution of Gentailers for ENRON style rorting of the NEM and Price Fixing.

SA-BEST is the only party advocating for 100% Renewable Generation and Storage in SA by 2030. For skeptics who believe 100% Renewable Energy cannot be achieved, viewing of the ANU Video on Pumped Hydro Storage is a must.

3. SA-BEST: Government/Community-Owned Utility and Retailer (cETSA)

SA-BEST will implement a "Not for Profit" Retailer cETSA. cETSA will predominantly use "behind the meter" or "Demand-Side" Infrastructure (at least Solar PV Panels, Electric Heat Pumps, Batteries, Smart Meters, Vehicle to Grid BEV (V2G) agile Charging and Discharging Infrastructure combined with agile Tariffs) to develop a Virtual Power Station using all Residential, Government and Commercial Buildings, and BEV's across the State. This Renewable Energy Infrastructure will ultimately be Government owned (eg cETSA). The roll-out of such Infrastructure across the entire state of SA is expected to take in the order of 10 years, with the goal to be completed no later than 2030.

SA-BEST is the only party at the 2018 SA State Election advocating for a Government Owned community Utility and Retailer cETSA to compete in the SA Retail Electricity Market.

4. SA-BEST: Vendor and Technology Independent and Agnostic

cETSA will not only use "behind the meter" or "Demand-Side" infrastructure. cETSA will also use Utility-Scale Generation and Storage designed appropriately for distribution across the "Supply-Side" of the SA Region of the NEM, often attached to Generation Stations, Substations, and large consumers. cETSA's strategy will embrace all storage technologies, including at least Pumped Hydro, Lithium-Ion, and Flow technologies, as well as other technologies as they emerge and become price/performance competitive. Vendor Independence is the only way cETSA can achieve true price/performance competitiveness for acquisition, installation, operation, and maintenance of Renewable Infrastructure Assets either on the "Demand-Side" or the "Supply-Side".

SA-BEST is the only party at the 2018 SA State Election advocating vendor and technology independence in the development of SA's Energy Strategy, consistent with its goal of achieving the lowest Retail Electricity Prices in the world in SA.

5. SA-BEST: Making Distribution and Transmission Competitive in SA

cETSA's Government and Community-owned Infrastructure will complement and compete with existing Private Monopoly Owned SA Region NEM Assets, and other Privatised Assets across the NEM. SA-BEST envisages cETSA becoming the first Government and Community- owned Retailer to demonstrate groundbreaking world leadership in establishing predominantly behind the meter infrastructure "Demand-Side" Utility and Retailer.

cETSA will lead in the implementation of the most cost-effective appropriately designed and implemented Renewable Technologies as it grows. cETSA will also lead in development of "Demand-Side" community micro-grids to introduce competition in the SA Distribution marketplace. A market currently monopolized by Chinese owned SA Power Networks (SAPN) and ElectraNet.

For example, cETSA will develop Community-owned Battery Storage deployed around South Australia in an appropriately designed and distributed fashion to capture excess Rooftop Solar and to minimize Curtailment of Renewable Generation. Deployment of DER Community storage will strengthen the existing Distribution and Transmission Grids, and reduce the need to expand on these traditional grids. DER will also allow rural and remote communities to run off-grid in SA for the first time, supported by the State Government and Community-owned Retailer cETSA.

SA-BEST is the only party in the 2018 SA State Election with a strategy to introduce a new retailer like cETSA to introduce competitive tension in the Distribution and Transmission market in SA.

6. SA-BEST: Identifying the Problem

cETSA will be grown in such a way as to resolve the SA Region NEM, ENRON style rorting and Price-fixing activity by existing Gentailers identified in the following article.

Part 2.3 Resolving the Megaproject Paradox: Failure of a National Electricity Market

SA-BEST is the only party in the 2018 SA State Election focused on a long-term resolution to the unique ENRON style anti-competitive rorting problems for the SA Region of the NEM.

7. SA-BEST: 100% SA Renewables by 2030

SA Best: 100% renewables by 2030 is a feasible goal. SA-BEST will strive to introduce an Energy future for SA that is based on 100% renewables as soon as can be achieved and by no later than 2030. SA-BEST's objectives in achieving this goal will require a stable, smart, high-performance Electricity Grid that delivers lowest cost Retail Electricity in the world.

SA-BEST is the only party in the SA 2018 State Election with such an attractive Renewable Goal backed by a strategic and competitive infrastructure roll-out planned for completion by 2030.

8. SA-BEST: BEV and Renewable Technology Strategy

As part of the transition to 100% Renewable Energy Generation and Storage by 2030, SA-BEST will legislate to develop a new manufacturing industry in SA with the associated jobs. SA-BEST will legislate to make the purchase of Battery Electric Vehicles (BEV's) and Renewable Generation and Storage Technologies and the Manufacture of BEV's and Renewable Generation and Storage Technologies in SA, more attractive than anywhere else in Australia and the world.

SA-BEST has the objective of reducing SA Retail Electricity prices back to the lowest in the World, as when ETSA was SA Government-owned. Both objectives must develop together and coexist to complement the development of each of the objectives. There is little point in developing a BEV and Renewable Generation and Storage Technology Strategy if the cost of Retail Electricity is allowed or artificially forced to remain high.

SA-BEST is the only party in the SA 2018 State Election to identify a coordinated BEV and Renewable Generation and Storage Technology future for SA. A future based around making SA the most attractive location in the world for both manufacture and purchase of BEVs and Renewable Generation and Storage Technologies.

9. SA-BEST: Energy - Our Plan to Bring Down Power Prices

SA-BEST will bring down Power Prices paid by SA voters and SA business by focusing on four key issues:

1. DOMGAS RESERVE PRICING LEGISLATION: SA-BEST policy is to introduce a Domestic Gas (DOMGAS) Reserve with legislated pricing that limits Australia's Gas Price to below the cheapest Export Gas Pricing on Australia's East Coast. This will reduce wholesale Electricity prices generated from 100% of SA's Power Stations which are all "Gas-Fired". It will also reduce Retail Gas prices to all SA businesses and consumers in their homes. It will make SA the most attractive location for manufacturers to operate in the world because SA's Energy Prices (Gas and Electricity) will become the cheapest in the world, as when ETSA was State Government-owned.
2. ELECTRICITY AND GAS RETAIL COMPETITION: Introduction of a Government and Community-owned or part-owned Electricity and Gas Retailer cETSA. SA generates the lowest cost wholesale Electricity on the NEM from its Massive Renewable Energy and Storage Assets. It is outrageous that SA in 2018 pays the highest Retail electricity prices in the world, principally because of Australia's east coast monopolistic Gas CARTEL Price Fixing. Price Fixing is illegal and must be prosecuted by the Federal Government and the ACCC. SA will drive the Price Fixing case against the CARTEL. The disparity between SA wholesale and retail pricing is due to a lack of competition in the Retail of Electricity and Gas in SA. SA-BEST policy is to introduce an SA Govt "Owned" Retailer into the market cETSA. The SA Govt will earn revenue from competition with the existing Privately owned monopoly retailers and save money for all South Australians who sign up with the Government-owned Retailer cETSA.
3. COMMUNITY ENERGY NETWORKS: SA-BEST policy is to introduce Virtual Power Plant (VPP) Technology with subsidies for SA consumers with Rooftop Solar Panel and Battery combinations, including Vehicle to Grid charging for BEV's. Through the SA Government owned Retailer, an SA Government Subsidised VPP will earn money for the State Government Owned Retailer and build a more reliable, stable and redundant network for all VPP participants. The SA Govt Owned Retailer will sponsor behind the meter "Demand side" community network (micro-grid) trials including the roll-out of Community Storage to compete with the SA Distribution and Transmission companies. The SA Govt owned Retailer will work with individual Local Government bodies or combined through the LGA, to help local communities relieve themselves of the outrageous Gold Plating charges of the Privately Chinese owned monopoly Transmission (ElectraNet) and Distribution (SAPN) companies in SA.
4. DEVELOP A HYDROGEN EXPORT ECONOMY: Develop a Manufacturing and Export Industry built around Generation of Hydrogen from Electrolysis. Develop Policy that has the long term goal of 100% replacing Gas-Fired Power Generation by 100% Hydrogen Fired Generation for any Industrial generation requirements that cannot be met by other Renewable Energy Generation and Storage requirements. Legislate to transition away from a Residential Gas Network to the use of highly efficient Residential Electric Heat Pumps for heating and cooling and Electrical Induction cooking. Develop a strong Export market in Hydrogen to Asian and other Economies that cannot satisfy their own Energy needs through Renewable Generation and Storage.

Competition and Regulation is the best way to bring downward pressure on prices in South Australia. These four policy strategies will bring about the desired results for South Australian Energy Consumers, and will engage each level of Government, Federal, State, and Local in the implementation of various facets of the strategy.

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