The Irish reindustrialisation of South Australia

They say if the Irish had been offered the choice of oil or potatoes they would have chosen potatoes. The South Australians could have put a few tens of millions into an old coal-fired power station to maintain reliable energy for some years to come. They chose wind farms instead, and a big battery for publicity for Elon Musk.

They lost some industries but now the good news is they are reindstrialising with cheap renewable energy!

The first project in a US$1 billion nationwide renewable energy program has been launched near Whyalla, in South Australia, as part of a push to bring down Australia’s electricity prices.

Key points:
• Sanjeev Gupta’s SIMEC ZEN Energy has launched a $1 billion, one-gigawatt dispatchable renewable energy program
• It will comprise of many renewable energy projects, including co-generation at the Whyalla steel plant
•The first project, Cultana Solar Farm, could power almost 100,000 homes

The 280-megawatt Cultana Solar Farm will begin construction in early 2019, employing 350 workers during construction and providing greater energy security to the Whyalla Liberty OneSteel steelworks.

Billionaire Sanjeev Gupta said the investment by his company, SIMEC ZEN Energy, formed part of his firm belief there was a great future for energy-intensive industries through a transition to more renewable energy.

Buried in the hype is a warming from Mr Gupta that coal still has a role to play and the move to renewables “will have to be handled carefully.” You can say that again.

This entry was posted in Global warming and climate change policy, Rafe. Bookmark the permalink.

47 Responses to The Irish reindustrialisation of South Australia

  1. Tim Neilson"?

    How much “investment” is being made in this project by Australian (or SA) taxpayers?

  2. Tezza

    I always get a laugh out of statements like “Cultana Solar Farm could power almost 100,000 homes … providing greater energy security to the Whyalla Liberty OneSteel steelworks.” I always want to add “… when the sun is shining. When it’s not, back up, load shedding, and storage arrangements yet to be costed, announced or built will be called on.”

    Somehow or other, that necessary addition never makes the press release, and our esteemed journalists never seem to ask about it.

    Having been lied to on these matters by the green left for a quarter century, I am getting mighty tired of such puffery.

  3. Bruce of Newcastle

    How is he building a dispatchable 1 GW solar set up?
    There’s this odd even that happens each day: the Sun goes down.
    If he plans an Ivanpah style solar thermal rig he must know Ivanpah has been a disaster.
    And that doesn’t even count all the fried birds.

  4. Leo G

    “So (wind, solar and batteries) together that gives us the ability to offer dispatchable baseload power at prices cheaper than other forms of power.”

    I expect that means that they will be mostly offering other people’s baseload power, which they buy at a regulated price, and make a reasonable profit out of cross-subsidies.

  5. wozzup

    ” They chose wind farms instead, and a big battery for publicity for Elon Musk.”

    The batteries should have been cardboard cutouts not real ones.
    First they would have been at least as useful in the energy chain. Second they would have been much, much cheaper. Third, they look just as good when propped up behind ex Labor Premier Weatherill for a campaign brochure photograph (which after all is what they were really for) and finally they could at least have been burned to produce warmth when the wind stopped blowing to generate electricity to charge them.

    Of course if the Greens really believe that these forms of energy are cheaper than other forms as they constantly assert, they should welcome deregulation of the market and elimination of subsidies and rules that prop investment in them up.

    (Footnote: Isn’t it predictable that wasteful expenditure on ideologically derived boondoggles like this are ALWAYS referred to as an investment. Hint for lefties, investments produce a RETURN.)

  6. Scotty

    How much taxpayer loot, ongoing subsidies, and smoke and mirrors will be going into this great scam…?

  7. Rafe Champion

    I wonder what powering almost 100,000 homes means in 24/365 terms?

    Greenpeace set up a solar scheme to power some number of homes in Africa or India but it barely charged their mobile phone batteries and there was a riot demanding real power at the ceremonial opening.

  8. Bob in Castlemaine

    “Buried in the hype is a warming from Mr Gupta”
    And this nonsense on the watch of a woul-be “Liberal” government. Talk about hollering for a Marshall.
    It’s as though the hapless Weatherill Labor/Greens had never left?

  9. Neil

    he South Australians could have put a few tens of millions into an old coal-fired power station to maintain reliable energy for some years to come.

    Yep and also saved the jobs of hundreds of people at the power station and Leigh Creek coal mine supplying the coal. The govt (Federal and State) most probably would have got their money back from any money provided from payroll tax, income tax and the coal mine may have given royalties to the State govt. Leigh Creek as a town is now dead.

    Instead the SA govt had to spend $100M on diesel generators as a back up and spend who knows what building a new gas fired power station

  10. Mark M

    How many solar panels must be installed before said solar panels prevent their first drought?

    Adani solar plant guzzles illegal fresh water in drought-hit Tamil Nadu

    The world’s largest solar PV farm uses 200,000 litres of water each day to keep the panels clean.

    The world’s largest solar power plant, installed by the Adani Group in 2,500 acres in Kamuthi taluk of Tamil Nadu, is not as green or sustainable as it seems.

    … Yet some people think that we are soon going to source all our electricity from solar farms in deserts.

    http://www.newindianexpress.com/states/tamil-nadu/2017/jun/06/adani-solar-plant-guzzles-illegal-fresh-water-in-drought-hit-tamil-nadu-1613326.html

  11. None

    When even Bernard Keane’s outfit points to Gupta as being one giant rentseeker, you know that South Australia has got huge problems.

  12. Oh come on

    Whyalla Wipeout continues apace.

  13. Dr Fred Lenin

    Thats what happens when you have no state government , according to the left media the last government in SA was comrade weathercocks ,oh sorry they do have a government ,its a “liberal “one ?
    Aux guillotine I thought turnbull was out of politics ,instead he is runninng SA for the global fascist party ? When is this bullshit going to stop ? Heads should roll for this criminality ,literally .

  14. JohnA

    Census 2016 for South Australia says 765,786 homes.

    He claims he will supply power to 12% of the homes – for how long each day?

  15. Nob

    Bruce of Newcastle
    #2855296, posted on November 2, 2018 at 7:27 pm
    How is he building a dispatchable 1 GW solar set up?

    Quite simple:

    They’ve become aware of criticisms that solar power is not dispatchable, so they’ve fixed it.

    By adding the word “dispatchable” to their project description.

  16. NuThink

    A term commonly used by the pollies is to “put downward pressure on electricity prices”.
    When I walk on a concrete slab I put downward pressure on the slab but it does not move (OK it moves microscopically).
    So putting downward pressure on the electricity prices is meaningless mumbo jumbo, it has nothing to do with the prices actually falling.

  17. GD

    I thought the South Australians elected a Liberal government, not a clone of Weatherill’s failed socialist regime.

  18. RobK

    I think jounos and the pressers conflate “dispatchable” and the newly coined term “firming”. I dont know if Gupta can run extra coal through his furnaces to boost the co-generation when needed. I am sure there will be a lot of subsidies in such a polically charged environment .
    A few years ago I established that “household equivalent” was based on a household that used about 12kWh per day, this was when the figure was used by wind turbine sprukers. (A frugal household using gas heating, HWS, cooking and evaporative a/c). I dont think there is a formal standard so it can be what you what it to be, like so much of this agitprop.

  19. They say if the Irish had been offered the choice of oil or potatoes they would have chosen potatoes.

    No they don’t Rafe.
    Never heard this saying and it makes not a lick of sense in relation to your article.
    Good piece btw.

  20. Bruce of Newcastle

    They chose wind farms instead

    Diabolical things they are. Today:

    4 Charts Expose Abominable Inadequacy Of Europe’s Wind Energy …”Power Collapses Within Minutes”

    German wind energy opposition organization Vernunftkraft here posted some charts at Facebook showing just how abominably inadequate wind as a source of power really is. … Vernunftkraft writes that with wind energy in Europe, “power generation collapses within minutes.”

    Yet wind proponents and lobbyists like to counter by telling us that the problem will be manageable by simply adding more capacity, some storage and using a smart grid.

    Growing grid instability

    But as the following chart shows, Germany has in fact doubled its installed capacity over the past 8 years, but this has done nothing regarding grid stability, and has only made things worse

    Note that the peaks are far greater and that the instability has become far more extreme. Yet, this is not stopping green energy activists and lobbyists from calling for doubling, tripling or even quadrupling the country’s installed wind capacity.

    Grid control engineers in Europe must be tearing their hair out and having nervous breakdowns trying to cope with the crazy swings. Who’d want to be a power guy?

  21. Nob

    Farmer Gez
    #2855594, posted on November 3, 2018 at 7:36 am
    They say if the Irish had been offered the choice of oil or potatoes they would have chosen potatoes.

    No they don’t Rafe.

    What an Irish farmer told me back in the day was, “they say if the Dutch had Ireland, they could feed the world” and he added sardonically, “and if the Irish had Holland, they’d drown”

    Rafe’s version is just your standard Polish/Irish/Italian/Newfy /whatever joke.

    Today’s Ireland has proved a whole lot better at attracting business than any part of Australia has.

  22. Arky

    Can we just give the country straight to the Chinese and skip the whole de-industrialisation and energy poverty step?

  23. Arky

    For sure I don’t look forward to the gulags, but we will all deal with it better without the years of eating raw onions in the dark first.

  24. Fat Tony

    Onions? Luxury!

    At least the Irish had potatoes……..

  25. John Constantine

    Given a choice between Gaelic speaking redheaded Irishmen and chicom property developers with Ponzi houseprices, the Irish have chosen to be paid to vote for the Gaelic Genocide.

    https://www.irishtimes.com/news/irish-could-be-minority-ethnic-group-here-by-2050-professor-1.424517

  26. Rafe

    If you cant beat them join them. My second wife is chinese.
    Good luck suckers☺

  27. Pyrmonter

    The South Australians could have put a few tens of millions into an old coal-fired power station to maintain reliable energy for some years to come.

    Except, that simply isn’t true. The government was invited to pay c. $25 million to allow the plant (less than half the size of SA’s main generator, Torrens Island) to stay open until 2018 and pick up the (unquantified) environmental remediation expense of demolition. Any government that had succumbed to that bit of theatre, rent-seeking on a grand scale by the generator, would have deserved to have been thrown out by its taxpayers.

  28. RobK

    Pyr,
    Is that a fact? What liabilities did the State carry in the present scenario? They were certainly theatrical about the demolishion to be projected as political pay dirt. Does anyone have any references to the actual offer?

  29. Pyrmonter

    The letter used to be available online – I thought on SA’s Treasury website; I’ll see if I can find it. It did require some contextual understanding to understand – that was the theatrical side.

  30. Pyrmonter

    Doesn’t seem to be available now (might be on the Advertiser/MyAdelaide/News website, but it’s paywalled). It was summarised elswhere – in short, Alinta/Flinders Power offered to keep running the station if the govenment paid $25 m up to 2018, refundable if the Flinders Power/Alinta decided to discontinue anyway; repayment was to be supported by bank guarantees. There was some option for the generator to run on for another 2 years at a further subsidy, the refunding of which wasn’t to be guaranteed.

    The SA market has caught the worst effects of the renewables subsidies – SA’s geography (dry, fairly hot, windy) lends itself to renewables, and the state government seized on the ‘nice shiny new thing’. The reality is though that it was all driven by the nation Large Renewable Energy Target – a Howard government policy (but little more than window-dressing) that Rudd ramped up in 2009. It’s bad policy. But paying bribes to a business like Alinta to keep going, and picking up the tab for private remediation expenses is also bad policy; not one that would have cancelled out the problems created by the first one.

  31. RobK

    Thanks Pyr,
    Interesting. There is often an issue with legacy enviro rehab. If the State ever owned the site,they might be up for some costs anyway. I’ll keep an eye out, it’s not my State but pollies can be hard to pin down anywhere.

  32. RobK

    https://mobile.abc.net.au/news/2017-03-30/port-augusta-power-station-giveaway-a-bad-deal/8398898

    It has been revealed that Alinta Energy offered to give away the Port Augusta coal-fired power station for free.

    Key points:Alinta Energy approached SA Government to take ownership of coal-fired generatorSA Government rejected offer due to clean-up billLiberals no confidence motion voted down in Parliament

    The company approached the South Australian Government to take ownership of the plant under a “walk-in, walk-out” basis during negotiations in 2015, where it had also sought $25 million in subsidies to keep it running until 2018.

    Alinta’s offer is referred to in a letter from chief executive officer Jeff Dimery in 2015, obtained by the ABC.

    Last year, the plant closed following the 2014 end to coal mining at Leigh Creek, both with the loss of hundreds of jobs.

    SA Energy Minister Tom Koutsantonis said despite the apparent free deal, the Government would have taken on huge costs.

    PHOTO Coal was transported to the power station via train.ABC NEWS: KHAMA REID

    “Alinta would have walked away without having to pay any of the money for the clean-up of the mess that they had incurred and legacy liability they had taken on which is worth hundreds of millions of dollars,” he said.

    “So it’s not free, it’s actually hundreds of millions of dollars.”

    He said the price of taking on the plant’s liabilities would not have cancelled out the impacts of job losses or the cutback of thermal, baseload power.

    “We would be getting a coal mine that had no coal, to run a power station that was losing hundreds of millions of dollars,” he said.

    “It was a bad deal for the taxpayers and we said ‘no’.”

    SA power milestones and mishapsSA’s power generation and supply security has been under scrutiny in recent times. How did we get here?

    South Australian taxpayers once owned the plant, but it changed hands several times after privatisation in 1999.

    Mr Koutsantonis said the circumstances would have been different had it stayed in public hands all along.

    “We would have been investing in it while we owned it, we would not have been losing hundreds of millions of dollars, and we would have been running it in the interests of South Australian taxpayers,” he said.

    “If you take one part of the market back into government hands you have to take all of it, because when we ran ETSA, there wasn’t a national electricity market and we weren’t competing in a retail sense with anyone.”

    Liberals move a motion of no confidence

    The State Opposition later moved a motion of “no confidence” in Premier Jay Weatherill over what they called a failure to provide affordable and reliable electricity after investing in wind power over the last decade or so.

    Nick Harmsen

    ✔@nickharmsen

    @marshall_steven given his #saparli marching orders as @JayWeatherill defends his govt in a no-confidence motion @abcnewsAdelaide

    11:58 AM – Mar 30, 2017

    3

    See Nick Harmsen’s other Tweets

    Twitter Ads info and privacy

    The motion was a symbolic one as the Government voted it down with the support of its two independent ministers.

    Opposition Leader Steven Marshall told SA Parliament the state’s electricity problems were of the Government’s own making.

    “This Premier, this Energy Minister, have made South Australia the laughing stock of the entire nation with their failed experiment which has plunged South Australia into a competitive disadvantage with every other state in the nation,” he said.

    “Highest priced least reliable energy, highest unemployment.”

    Independent MP and Investment and Trade Minister Martin Hamilton Smith — a former Liberal leader — told Parliament Mr Marshall needed to “get with it” on the issue of power.

    “The Premier and Treasurer have exposed the absolute naivety of the Leader’s thinking on this matter,” he said.

    “The lack of business acumen, the lack of an alternative plan, the poor understanding of the energy market and the business of government — it foreshadows the mistakes those opposite would make if in government.”

    Mr Weatherill told Parliament the public response to his Government’s $500-million energy security plan to build a storage battery with a 100 megawatt output, and a 250-megawatt gas-fired power plant was a vote of confidence.

    “The reason why there is this growing sense of confidence in the South Australian community and this Government is because it has taken one of the most significant public policy issues confronting our state, something that affects the lives of every citizen, the livelihood of every business, and has seen a threat to it and has responded assertively to remedy it,” he said.

    Mr Marshall and four other Liberal MPs along with a Labor backbencher were later given their marching orders from the House of Assembly for interjecting.

    EXTERNAL LINKAlinta energy letter

    POSTED THU 30 MAR 2017, 7:03 AM AEDT

    It would be interesting to know the actual liabilities transfered with the original sale from State ownership.

  33. RobK

    Im not convinced that the SA Gov has no legacy liabilities from what ive seen.

  34. Neil

    Except, that simply isn’t true. The government was invited to pay c. $25 million to allow the plant (less than half the size of SA’s main generator, Torrens Island) to stay open until 2018 and pick up the (unquantified) environmental remediation expense of demolition. Any government that had succumbed to that bit of theatre, rent-seeking on a grand scale by the generator, would have deserved to have been thrown out by its taxpayers.

    The $25M would have saved hundreds of jobs at the power station and Leigh Creek coal mine. I do not know but I suspect the SA govt would have got royalties from Leigh Creek. Hundred of jobs means a lot of tax money for the govt. Leigh Creek is now dead

    Because they got rid of Playford SA govt had to spend $100M on diesel generators which may never be used

    $25M of taxpayers money was a good investment

  35. Rafe Champion

    Pyrmonter, thanks for correcting my simplistic report. Still there is a question, what were they going to get for 25 million plus additional costs compared with what they got for the 500 mill energy security plan?

    Mr Weatherill told Parliament the public response to his Government’s $500-million energy security plan to build a storage battery with a 100 megawatt output, and a 250-megawatt gas-fired power plant was a vote of confidence.

    Like every other bit of state interference gone wrong you ask “how do we get to some place sensible from here” and the most obvious answer is “I wouldn’t start from here”. Another country joke.

  36. RobK

    The Alinta letter pretty much spells out that the RET is directly and indirectly the cause of the losses.

  37. RobK

    The Alinta letter pretty much sp el ls out that the RET is directly and indirectly the cause of the losses.
    Spaminator victim.

  38. Neil

    $25M from the govt would have saved the jobs of hundreds of workers at the power station and Leigh Creek coal mine. Leigh Creek is now dead and the SA govt had to spend $100M of taxpayers money on diesel generators because they chased out coal generated electricity

    https://www.abc.net.au/news/2017-07-04/leigh-creek-recovers-after-mine-closure/8676580

    More than 18 months after Alinta Energy closed its coal mine at Leigh Creek, in South Australia’s Northern Flinders Ranges, the mammoth job of remediating the mine is well underway.
    For more than 70 years coal was extracted from the open pit, and sent 250 kilometres by rail to the power stations at Port Augusta.

  39. Nob

    “environmental remediation” is an open chequebook on your account, held by your enemies.

  40. Pyrmonter

    @ Neil

    Your logic rests on the ‘government (can) know better’ theory of fiscal policy generally eschewed at the Cat.

    In particular:

    The $25M would have saved hundreds of jobs at the power station and Leigh Creek coal mine. I do not know but I suspect the SA govt would have got royalties from Leigh Creek. Hundred of jobs means a lot of tax money for the govt. Leigh Creek is now dead

    On Alinta’s proposal, they’d have deferred the terminations by maybe 2, maybe 4 years. This sort of ‘I’ll reform tomorrow’ argument was stock-in-trade for the manufacturing and protected ag lobbies; it’s no more sensible in respect of a private generation business.

    Because they got rid of Playford SA govt had to spend $100M on diesel generators which may never be used

    They spent a bunch, but $100M? And who is to blame – the SA government? Or the Feds, above all, Tony Abbott and his then ministeri for industry, Ian Macfarlane, who continued the LRET, while crowing about their ‘success’ in dismantling a carbon tax that never bit, and never would.

    $25M of taxpayers money was a good investment

    ‘investment’ would have left some residual benefit. What Alinta offered – in a letter written to the press, with a copy to the government – was to walk away from the contingent liability it had bought when it acquired the Flinders Power business. That was part of the deal when SA leased its electricity assets 20 years ago – the purchasers had to pick up those costs. Why would government make a free gift of tens of millions to a business for the sake of staving off closure by 2, maybe 4 at the out-most years?

    @ Rafe

    You’re experienced enough to have seen governments exaggerate the value of their outlays; the SA government in the final few years of Weatherill threw around numbers as if they were confetti. A ‘$500 m’ program doesn’t mean the net outlay.

    @ RobK

    The letter is clearly intended to be published to the world at large – it’s a PR exercise. Of course they blame the RET. And they have a point. But the LRET was (and with the abandonment of the Turnbull FEG, remains) a national (at least, eastern seaboard) issue, not a folic of the SA government. The earlier letter (I think – one addressed to a public servant) ran to two or three pages and set out their proposal. It wasn’t one any government properly advised was going to accept.

  41. Win

    Funny how an Indian business man will light south Australia in preference to providing the millions of his country men basic power .How many Indians would like to replace their present light source of a plastic bottle cut through their roof with a light bulb. Then again India’s efficient coal powered power stations fueled with Australian coal is the key to their industrial revolution and Mr Guptas must know his renewables with beggar Australia in competition.

  42. Neil

    Pyrmonter

    The diesel generators to be used as a backup in SA cost at least $100M. They could have kept the coal fired power station open for much less and saved the jobs of hundreds of people. Those people pay tax

    And SA is to blame because they have gone much further down the renewable energy path than any other State

  43. Tel

    Funny how an Indian business man will light south Australia in preference to providing the millions of his country men basic power

    To be fair, he lives in NSW so I guess he might be a tiny bit worried about the South Australians draining us dry (and when Liddell Power Station shuts down we will need all the help we can get).

  44. egg_

    Can we just give the country straight to the Chinese and skip the whole de-industrialisation and energy poverty step?

    +1

    We’d probably be better off for it.

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