SA Government must underwrite new gas-fired generator

9 February 2017

Senator Nick Xenophon has called on the South Australian Government to intervene in the state electricity market by effectively underwriting the construction of a new gas-fired power plant - in order to provide energy security and lower prices for consumers. 

"The events of last night are yet another reminder of market failure in our electricity sector, with enormous impacts on residential consumers and businesses. The State Government has the market power, with its ability to contract for the power it uses, to effectively underwrite a new gas-fired generator, and to bring with it major electricity users as well," said Nick.

Senator Xenophon said the effect of such a move would be to add real competitive pressures on existing generators and prevent the price gouging that is currently occurring due to the intermittent and unreliable electricity supply in SA.

"Last night there was a period when the price of power in other states was around $200 per megawatt hour, but in South Australia it hit over $13,000. That is completely unsustainable. 

"I'm sick of the pathetic blame game between the Liberal and Labor parties on this. There is a solution in sight and that solution is for the SA Government to get involved and act immediately. Even the announcement of that generator will send a signal to the marketplace that the price gouging has to stop.

"Unless the SA Government gets involved, South Australians will be condemned to more and more blackouts, and more and more power price rises, which is increasingly prohibitive and incredibly damaging to people's lives and to the state's economy."

Senator Xenophon also called on the Federal Government to support an Emissions Intensity Scheme, of the type he advocated for with then-Opposition Leader Malcolm Turnbull in 2009, which would also provide greater energy security and lower prices. 

Senator Xenophon was also highly critical of the Australian Energy Market Operator (AEMO) and its decisions. 

"It seems the peak body responsible for operating the electricity market isn't doing its job and has made a number of bad calls which have only worsened the energy crisis in SA."

Senator Xenophon said he would be asking questions of AEMO's own operations and decisions at a Senate inquiry into electricity markets in Canberra tomorrow (Friday). 

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