Gas-fired generators for South Australia government's backup power station leased but ready for crisis

Generators proposed by Labor to be the core of a state-government-owned emergency-backup gas-fired power station.
Image courtesy ABC news

Generators for a proposed $360 million government-owned 250MW emergency-backup gas-fired power station in South Australia, part of the state Labor government’s 2017 $550 million energy plan, will instead be leased over 25 years to private interests.

The gas generators were to be the first state-owned electricity infrastructure since the Liberal government privatised the Electricity Trust of South Australia in 1999. The 250MW fast-start power plant was to supply 10% of the state’s energy quickly in an emergency and provide year-round grid stability and help avoid the blackout events of 2016-17.

The option of the South Australian Labor government buying or leasing a gas-fired electricity generator to help stabilise the state’s expensive and unreliable power supply had been raised by the state’s influential Economic Development Board. It suggested that, without national progress on energy policy, South Australia should consider going it alone.

Nine new General Electric aero-derivative turbines, leased through American company APR Energy, were installed by the state Labor government in time for 2017 summer as an emergency backup to avert power blackouts.

Part of the $550 million energy plan, the generators were a fill-in measure for two summers before they being merged into a government-owned gas-fired power generator.

The turbines were capable of quickly producing up to 276 MW of energy. The state-owned generators would be only used when required to prevent an electricity supply shortfall.

The Labor government budgeted $20.4 million to operate the power plant 2019-21 and set aside a $72.8 million contingency fund, to cover mpving and setting them up at the southern end of Bolivar waste water treatment plant, next to the Moomba-to-Adelaide gas pipeline and the SEA Gas transmission pipeline, as well as ElectraNet’s 275kV electricity transmission network.

South Australia’s biggest private power provider, AGL, told investors the state-owned 250-megawatt plant was the “most problematic” part of the state government’s energy plan, adding that it was “wishful thinking” to expect the plant wouldn’t compete in the electricity market. The Labor government responded that AGL’s monopoly, as owner of one of the largest power stations after ETSA was privatised, have been charging “extraordinary (power) prices to South Australians”.

Despite a report it commission criticising the Labor government's move, the new Liberal state government in 2018 decided not to sell the generators but to lease them long-term to a private company that would make them available for emergency use.