Surging electricity prices in South Australia have sparked calls for a national inquiry into renewable energy and whether the electricity market is coping with the influx of wind and solar.
Over the past month South Australia has had surges in wholesale electricity prices. Normally sitting below $100 per megawatt hour, they have fluctuated dramatically in recent weeks, hitting as much as $14,000 per megawatt hour and regularly jumping above $10,000, according to The Guardian.
The prices have spooked energy-intensive heavy industry in the state, including the embattled Arrium steelworks, and led the premier, Jay Weatherill, to call on a recently mothballed gas power plant to fire up.
South Australia leads the Australian states and territories when it comes to reliance on renewable energy sources besides large-scale hydro. About 40% of its electricity comes from variable renewable sources such as wind and it has a 50% renewable energy target for 2025.
In response to the price surges, the South Australian senator Nick Xenophon told the Australian Financial Review he would suggest a Senate inquiry examine the mix of renewable energy in Australia.
“I am not anti-wind but there are legitimate questions to ask about the renewable energy mix and the role of interconnections and the like,” he said.
The Northern Territory chief minister, Adam Giles, called for a “national energy summit” to look at the state’s “over-reliance on renewables”.
“The nation can’t afford to see heavy industry shut down because of crippling power prices and uncertainty over supply,” he said.
But the problem wasn’t the state’s reliance on renewable energy, said South Australia’s treasurer and minister for energy, Tom Koutsantonis. Instead, he said South Australia was being penalised by the National Electricity Market for its success in attracting renewable energy to the state.
“The National Energy Market has passed its use by date – it has failed to keep up with environmental policies and advances in technology,” he told the Guardian.
Koutsantonis said one problem was a trade imbalance since, while South Australia only had an electricity connection to Victoria, Victoria had a connection with three states.
“A truly national energy market with greater interconnection would allow this clean renewable energy to be sold into other states, and would help meet the renewables targets of those states.”