"SACOME members require a balanced approach to energy policy reform which is technology neutral and provides affordable, reliable, secure and sustainable energy.”
Access to affordable, secure and reliable sources of energy remains vital for the South Australian resources sector to prosper.
The South Australian and national energy markets are undergoing a period of significant change, moving from a centralised system, once reliant on large fossil fuel (coal and gas) generation, towards renewable energy generation, consisting primarily of wind, solar and battery power.
The deeply complex nature of the energy market coupled with the desire to rapidly decarbonise the economy represents one of the most significant public policy challenges in recent history.
South Australia is at the forefront of this energy transition process and is grappling with the urgent need to manage and reengineer the energy system to accommodate the mass influx of distributed energy resources and the rapid development of renewable generation. Our State also faces a unique challenge in bringing greater reliability of supply to the energy market and addressing price shocks that occur when renewable generation is insufficient.
While South Australia has the highest penetration of renewable generation in Australia, our State still experiences increased volatility and higher wholesale and retail electricity prices. The retirement of baseload generation due to changing market conditions has prompted a reduction of synchronous generation, traditionally responsible for frequency control and inertial services critical to the stability and reliability of the network.
Gas remains a critical component of South Australia’s energy sector, with gas-fired generation comprising 50% of the State’s electricity production. A reliable, affordable supply of gas will continue to underpin reliable, affordable electricity generation.
Given the ad hoc approach to managing electricity security in South Australia to date, commercial and industrial operators have incurred significant additional expense, characterised by a combination of government and regulator intervention, along with significant investment in new transmission and system stability infrastructure.
In the absence of a unified national framework, industry has set its own emissions reduction and/or abatement targets in line with international obligations and expectations of shareholders. The consequence being that much of the resources sector is further progressed in strategies for emissions reduction and/or abatement than is the Australian Government.
SACOME and its member companies recognise that meeting these decarbonisation goals is critical to demonstrating environmental, social and governance (ESG) responsibilities and in securing project financing.
Going forward, SACOME believes that detailed consideration must be given to how the ongoing energy transition process links with economic and industry policy, noting the specific challenges faced by heavy industry and the desire to preserve and transition the State’s industrial base to net-zero operations.
Recognising the scale of the energy transition challenge, SACOME has called for creation of a South Australian Energy Advisory Board with representation from industry, government, regulatory organisations and customers, to consider the impacts of energy policy across the economy and prepare a South Australian Energy Transition Roadmap.
This will be fundamental to ensuring the reliable, affordable supply of energy to all users.
Read SACOME's Energy Policy here.