SA defers Energy Security Target

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The South Australian Government has announced they will defer the start date of the Energy Security Target to 2020.

The Energy Security Target (EST) was announced as part of the State Government’s $550 million energy plan in March 2017, to boost energy security and increase local competition by requiring energy retailers to source more power from South Australian generators.

Minister for Energy, Tom Koutsantonis, said the Energy Security Target is designed to both put downward pressure on power prices and improve system strength.

“However, since we announced the EST a number of changes in the National Electricity Market have delivered system security outcomes similar to those the EST would seek to achieve. These include new gas generation capacity coming online, new system security requirements from AEMO, and the implementation of 49 out of 50 Finkel recommendations,” Mr Koutsantonis said.

“Modelling from Frontier Economics also shows that an EST would have the greatest impact when introduced into a more competitive market. By delaying the introduction of the EST to 2020 we can deliver better outcomes in terms of putting downward pressure on power prices.”

Since announcing the EST a number of significant changes have occurred in the energy market that are delivering system security outcomes in South Australia.

These include recent changes in the National Electricity Market, such as AEMO’s requirement to have at least three synchronous generators operating in South Australia at all times, and announcements by private generators that will bolster synchronous generation capacity in the state.

Additionally, 49 of the 50 recommendations of the Finkel Review are being implemented, many relating to system security. South Australia has joined with other states in tasking the Australian Energy Market Commission to work with AEMO to immediately develop and design the options to implement a Clean Energy Target, after the Commonwealth failed to endorse that recommendation.

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