SA to nationalise power market?

Big news here:

Federal and state energy ministers will today be told by the Weatherill Labor government that it will “retake control” of South Australia’s fragile power network so blackouts “do not happen again”.

The Weatherill government, which faces an election in just over 12 months, maintains last week’s forced power cut to 90,000 homes and businesses was “completely unnecessary and entirely avoidable”.

…“We are going to use every inch of our authority, everything we can, to retake our sovereignty…We believe that renewable energy, mixed with gas can meet (capacity) demands.”

…Premier Jay Weatherill and Mr Koutsantonis blamed the Australian Energy Market Operator and private distribution company SA Power Networks for a “litany of errors” that led to blackouts last week during a heatwave.

Hard to disagree with that:


I’ll reserve judgement until we see what SA has in mind but given Do-nothing Malcolm’s appallingly political response they no doubt feel they have little choice in acting unilaterally.

Looks like the fossil fuel gougers that refused to support the network have pushed too far.


  1. Glad to see that at least someone has the balls to place the blame exactly where it lies. Chopping a natural monopoly (and strategic asset) up into a series of private fiefdoms is textbook neoliberalism. It has failed.

    Who knows, maybe this was the plan of the owners all along. That’s a lot of money that’s about to get washed.

  2. It’s an empty threat. SA can’t unilaterally change the rules of the NEM. It can’t withdraw from the NEM, either, because it depends on getting electricity from Victoria on days when the wind doesn’t blow.

    • I’m not familiar with the rules of the NEM, is there anything stopping SA government building new peak demand gas fired generation and competing on the NEM with existing operators?

      • ResearchtimeMEMBER

        No point if there is no gas… which runs via pipelines and has a given capacity which cannot be increased. You can go down the route of gas storage, but then again thats reliant on continuing gas, which in SA’s case is not a guarantee.

        So here is a bubble situation for you. (a) Victoria can not longer supply consistent power, because the closure of several big coal fired power stations over the next decade or so will mean it will not be able to export a much, in fact, during heat waves that Victoria and South Australia share, there is a close to 100% Victoria will export nothing to South Australia. No matter what price. During day time, this should be mitigated by solar roof tops, but from 3.30pm onwards when the heat stays and the sun begins to disappear, black outs will be the norm.

        (b) Gas resources that South Australia relies are mostly conventional – although multiple sources and linkages are reversible. On a net basis, SA still exports interstate. But these are largely old discovered sources, decades old fields. News of new potential basin (don’t know the geology on that one) – but require a big return on investment to be developed, which simply isn’t there. If SA was to grow its demand (unlikely – probably flat going forward, with localise solar matching growth during day time), the required infrastructure would be prohibitive. And this is the bit people are in total denial of, if current exploration expenditure continues – in 10 years, there may be way less gas than there is today!!! Simply because there is no economic return…

        But (c) that means no BHP expansion (unlikely anyway) and no real growth for manufacturing once it closes.

        (d) Moreover, SA has to find additional power generation capacity to take into account Victoria not being able to help with supply! Its a bit like Denmark, which doesn’t want nuclear power, but gets half of its power from Sweden, which is half nuclear!!! This is the rub, it doesn’t have the gas capacity to built more gas plants – UNLESS, it builds massive gas storage plants. Which are massively expensive, and only required for a couple of weeks a year. And this is the other side of the equation, the gas required for storage if Victoria is out of the equation, will be so enormous, and cost so prohibitive, it will never be economic under any circumstance!!!

        Alternatively, it builds a high-tech 1,000MW coal fired plant, run it as efficiently as it for a fraction of the cost of coal, and use gas when it should used be for – peak!

      • Researchtime – SA should build a small, modern coal plant (or refurbish an existing/unoccupied one) as you say, so it can have it’s SAELEXIT. But, this coal plant should be an interim step until it becomes cheaper to store gas and solar as the technology matures.

      • ResearchtimeMEMBER

        It will never be cheaper to store gas because the volumes are so large, and the resource base declining. In fact talking about totally relying on gas is such a stupid idea… given the state of play.

        Energy storage, will happen. But realistically, it could be decades away. Its a bit like NASA planning missions, assuming technology would make certain functions possible. Then cancelled, realising it was a hopeless situation. Only revisiting them decades later!

        I remember as a young kids in the 1970’s early 80’s (M&D a bit hippieish) fellow voyagers having big banks of lead batteries as storage, wire taped together for power sources. Probably really dangerous. But things were simple then, it was just a small fridge, and a black and white TV that was only on for a couple of hours at night. Now we are so electrically charged, and the technology simply hasn’t kept up…

        Magnesium batteries are at least (Toyota say a decade) two decades away…

        It really is a stupid policy – run by ideologues, who are stupid enough to still be in power when the brown stuff hits the fan. Dumb, dumb, dumb – should be out of power by now on a fat pension and perks…

      • So after reading all that, it seems SA actually has surplus gas which they could use to plug gaps in intermittent renewable supply. Only gas can do this, because coal (or nuclear) power station’s base load generation cannot be ramped up and down (or switched off) dramatically as is required so isn’t much help managing fluctuations in supply from renewables.

      • ResearchtimeMEMBER

        No you are mis-reading the discussion – they can only supply a certain amount at a certain time. Once exceeded, no more!

        So yes, in a year SA is a net exporter, but at certain critical times, the current infrastructure cannot meet demand because of capacity constraints.

      • I don’t understand the physics of it but that sounds like it makes sense – gas combusts instantaneously while a coal-fired steam turbine would probably take some time to get going.

      • run by ideologues, who are stupid enough to still be in power when the brown stuff hits the fan

        They’re not stupid, it’s the people who vote for them who are stupid. No shortage of stupid Australian voters.

    • Yes and no. Energy is a constitutional responsibility of state governments. SA could withdraw from the NEM if it really wanted to. At a practical level, it makes no sense. SA has no real capacity to operate the system anymore. AEMO does that.

      What they are probably talking about is not withdrawing from the NEM but underwriting some additional reserve mechanism at a state level which they can direct under emergency situations.

      • I don’t understand the system.

        But given that it has been broken up into essentially a series of private fiefdoms as has been pointed out, how would they respond to the SA government trying to add it’s own power station into the grid even just for backup purposes? It surely wouldn’t be that good for their bottom lines.

      • They might not like it, but there is nothing stopping SA Govt from owning generation. Qld govt, Tas govt all own generation resources. As the owner they can decide what they do with those resources including forcing them into dispatch (via negative bids) when required.

      • Could the fact that others own main transmission, distribution, wholesale and retail be used to impair the will of the owner of the generator? Bearing in mind that I’m not an electrical engineer – can I force the multiplicity of private owners of various parts of the system to take what I’m producing?

      • “As the owner they can decide what they do with those resources including forcing them into dispatch (via negative bids) when required.”

        Of course, all they needed to avoid SA’s latest blackout were additional bids at ANY price.

  3. ResearchtimeMEMBER

    H&H – when does fakes news deserve credit? Renewables and gas cannot cover power blackouts – as a graph you have already shown he other day. Yet you print as if its true!

    You don’t address base load – and gas storage, given peak will overload any ongoing supplies.

    And you publish crazy crackpot ideas from guys with water from 100m cliffs creating hydro plants!

    This is not news my friend, this is political hyperbole, based on a CO2 fetish and an irrational angst against coal.

    And you constantly claim renewables are the answer – well, all the evidence from South Australia suggests they are not!!!

    • SA has one coal mine at Leigh Creek. The government didn’t shut that down, Alinta Energy did. It is cheaper for SA to import power from other states rather than coal.

      Until we have some kind of reliable base load, Australia cannot afford to shut down coal power generation. However, the decision to shut down coal powered electricity generation is all done by the private sector, which is beyond government control. RET or not, private companies will not building new coal power plants because of the simple reality : renewable electricity WILL be cheaper than coal before the lifespan of the coal power plant is amortized.

      • ResearchtimeMEMBER

        Import Newcastle spec from NSW… its pretty good quality. Relatively close, shipping not really an issue. Gas cannot touch it for cost per unit of capacity.

    • Renewables are the only solution. Climate science is new, however if there is a genuine risk that we are collectively raping the entire planet and future generations will have to live in biodomes (ok a bit extreme) why take the risk? Just because Johnny down the road is selling coal doesnt mean we have to. We could just grown poppys and start a new opium war.
      Renewable technology is ready to be implemented at scale if the political will is there. Germany is investing heavily in the Hydrogen Economy, Ammonia storage, flow batteries and energy storage. Rather than spending hundreds of millions on new coal power why not spend it on new energy storage pilot plants, solar thermal and wave.

      • ResearchtimeMEMBER

        blah, blah, blah… talk about something you actual know something about! I am sure there is a cave somewhere with your name on it!

    • At this point I’m obliged to inform everyone that Researchtime is a Young Earth Creationist. Ask yourself this, is someone who believes the world is 6,000 years old to be taken seriously on any technical matter?

      • @Reaserchtime “blah, blah, blah”

        You do know that if we don’t solve this problem of generating electricity reliably in a cost efficient manner without emitting carbon the world is stuffed?

    • Thank you for your informative posts. It is all pretty obvious stuff to guys like me with an engineering background. Shame they don’t teach thermodynamics and electrical engineering to the politicos – and the dumbing-down of the public discourse on things like climate and so-called Renewable Energy.

      It seems to me that we need badly a proper shut-down of the grid for a few weeks in some capital city before reality makes a comeback and retired engineers – the ones not contaminated by the AGW ideology – brought out of retirement to straighten things out.

      • You, like RT, obviously missed the admission by the AEMO that the blackouts could have been avoided if the reserve gas generators were cranked up sooner. There’s a discussion needed about the infrastructure required to prevent this from happening and the appropriate industry structural arrangements (which does point to government ownership). There are viable solutions that don’t require more coal power stations.

      • “cranked up sooner”

        So now the politicos are going to tell the engineers which units to “crank up” and when. Interesting viewpoint. Each to his own as they say.

      • AlexD,

        Engineers of my generation do not believe in the “Global Warming” hoax – even if they pretend otherwise. We remember that the party-line was “Future Ice Age” when we were in our 20’s.

        The new lot have been totally brainwashed by their politically-correct professors at university – employees who don’t want to lose their pensions. Critical-thinking is discouraged.

        The media have done a stellar job at persuading even primary school teachers to “believe” (in the religious sense) in the scam and they feed that drivel to my own kids.

        A look at the temperature levels over the past 10,000 years would dispel delusions anyone has of a direct link between temperature and CO2. We had much warmer periods with far less CO2.

        Once you start accepting that sort of lie – in order to be able to pay your mortgage – then everything else you do is based on a lie. You cannot do your job properly.

        So yes, you are correct. Technically they are far better engineers than I am, but they are chumps. It is far too late for them to admit that they were wrong all along and that they chose to keep quiet.

        Please don’t forget that pretty well all the infrastructure of Australia was built by previous generations. The lights did not go out in SA for sixty or more years – until 6 months ago. That is what engineering with no moral compass leads to.

      • drsmithy,

        So what happens in Greenland does not reflect on the rest of the world. Interesting.

        Well, the Romans did cultivate grapes in England and make their own wine. They even had vineyards as far north as Northamptonshire. Today, the few struggling vineyards are far south in places like the Isle of Wight

        “Veni, vidi, viticulture – remains of Roman vineyards found in UK”

        I guess now you are going to tell me that English weather is unrepresentative, well here is what the trees tell us from all over Europe:

        “Scientists Can’t Figure Out Why Leaf Unfolding In Europe Not Happening Earlier”

        The guys who wrote this piece of research sound very disappointed. I expect they thought their funding would be cut off if they did not come out with the “right” results.

        Look mate, whether you like it or not, we have had much warmer periods during historical times – let alone the last 100 years.

      • You struggle to comprehend that local climate can be at odds with overall global climate trends because you have little interest in being objective Alfred. Even in a climate system that is warming overall, you will have record low temperatures and areas that are cooler on average. Google “Atlantic Conveyor Belt”, for some background on why temp samples from the North Atlantic region can be unrepresentative of what is happening globally

      • So what happens in Greenland does not reflect on the rest of the world. Interesting.

        And yet these hypocrites whine on-and-on about how what happens in the western USA does not reflect on the rest of the world. Interesting indeed.

      • “unrepresentative”


        So where exactly am I supposed to get the data that disproves the fake theory of AGW?

        The places I referred to – Greenland ice-cores, England’s vineyards and forests all over Europe are not good enough for you. These sources are not so easily fixed by the US government. Note that the Russians do not believe in the AGW nonsense – even though they would love it if their country were 5 degrees warmer.

        “Putin does not believe in the global warming hoax”

        The data concocted by the NOAA are fake as the whistle blower Dr John Bates claims. He had to wait until his retirement to tell us the truth and if Obama were still in power he would have kept quiet for obvious reasons. Some years ago, the emails showed how the “climate scientists” at the University of East Anglia smoothed down the temperature data so as to hide an earlier period of “global warming”

        “Our hopelessly compromised scientific establishment cannot be allowed to get away with the Climategate whitewash, says Christopher Booker”

        “NOAA whistleblower tells how they used bad data to rub out “pause” for Paris”

        You guys must live in a wonderful world where governments don’t fix inflation data, unemployment data, GDP data, interest rates, the gold price and myriad other things besides. Now, you are claiming that the US government does not fix climate data. What is so sacred about climate data that they would not want to fix it so as to raise taxes and scare people?

      • Christo,

        What happened or did not happen on Twitter and Facebook is totally irrelevant to me. I am interested in reality. It is not some sort of popularity contest or fake reality show.

        Here is some stuff the newspapers in Oz don’t really want you to know:

        “New research shows that at least 58 New Zealand glaciers advanced between 1983 and 2008.”

        and to ensure that they don’t lose their grants, the researchers come out with the following amazing explanation:

        ““We found that lower temperature caused the glaciers to advance, rather than increased precipitation as previously thought,” said Mackintosh. “These periods of reduced temperature affected the entire New Zealand region, and they were significant enough for the glaciers to re-advance in spite of human-induced climate change.”“It may seem unusual—this regional cooling during a period of overall global warming—but it’s still consistent with human-induced climate change,” Mackintosh adds.”

        Oh dear, I forgot, New Zealand is “unrepresentative”

        Here is what just happened in Perth:

        “Perth’s temperature maxed out at 17.4 degrees at 4.19pm, well below the lowest previous top for the month of 19.0 degrees on February 17, 2014” – they “forgot” to mention that this is the lowest since records began over 120 years ago.

        Just in case you think that is a freak occurence, here is what happened in Perth last September:

        “Coldest Perth September recorded in 120 years of records (must be climate change)”

      • The link Smithy provided above should give you the needed background Alfred. I note you’re still cherry picking data from areas heavily influenced by the North Atlantic which, as I have already explained, is pretty silly.
        PS-you’ll also find record low temps in Perth are usually in company with highs over east. Such is life with local weather. Not understanding the difference between weather and climate speaks to your lack of understanding.

      • “cherry picking data”


        When it comes to cherry picking the NOAA has done a good job of ignoring the buoy data to get the desired input to the IPCC Paris conference. NASA is notorious for preferring ground over satellite data.

        Sorry mate. The game is up and I hope Trump gets the FBI in on the act to find out what is really going on and that those who cooked the books for 25 years get locked up.

      • Now, you are claiming that the US government does not fix climate data.

        Actually, I believe the claim is that there hasn’t been a multinational, multigenerational conspiracy to corrupt data and science for what appear to be undefined reasons and unclear goals.

        You guys would be more convincing if you didn’t keep using circular references back to the same tiny group of people without accreditation in the relevant fields who are nearly always demonstrably wrong.

      • drsmithy,

        You are not countering my data with any of your own. It is like talking to a religious Catholic about the virgin birth story.

        If it is an article of faith for you, that is fine by me. But I am only interested in the data.

        “Former Obama EPA Chief concedes: ‘Climate change has become a religion'”

      • You are not countering my data with any of your own. It is like talking to a religious Catholic about the virgin birth story.

        If it is an article of faith for you, that is fine by me. But I am only interested in the data.

        Now there’s some weapons-grade irony. The guy claiming all the data that disagrees with his opinion is fabricated or corrupted due to a worldwide conspiracy – a conspiracy without any apparent motivations or objectives – lasting generations, is accusing others of holding “articles of faith”.

        Plenty of data on Sceptical Science, conveniently collated by “argument”. From what I’ve seen, you haven’t yet posted anything they don’t already refute.

        I don’t hold any illusions anything will change your mind. I’m throwing in the odd link here and there to help other people who might be taken in by your quackery.

  4. Don’t forget that ‘Do nothing’ is founding principle on which free market economics is based. That’s because the markets will always autonomously sort out the balance between supply and demand in the most efficient…

    I’m sorry. I just can’t finish that statement without LMFAO.

  5. armchair economist

    SA cld go nuclear like all other advanced economies or they could get lots of hampsters chasing cheese turning lots of little wheels

    • Nuclear power needs a place to store nuclear waste. The good thing is that once a place is found, all the nuclear waste all over the world can be stored there, thus vastly reducing the risk of another Fukushima. I think Christmas Island would be a good place for it.

    • desmodromicMEMBER

      The nuclear option requires engineers, physicists and know how. Given our record with the NBN and submarines, nuclear power would likely complete a hat-trick of expensive duds. I have no confidence in any Australian government to delivery such a complex project at a reasonable cost.

  6. “He said Labor was “concerned” about further blackouts next summer, ahead of the next state election, and “that’s why the state government will be making interventions”.

    Interventions are NOT nationalisation. Your headline is misleading.

  7. Do they have still have some control of Santos? In the past, the SA parliament needed to approve any shareholder who held more than 15% of the stock. I think it was scrapped but I am not sure if they still have any left over powers over them.

    • ResearchtimeMEMBER

      Still doesn’t give you any more gas? There has to be an economic return to justify investment – which is currently not happening!

      Soon you can reserve 100% – of… wait for it, nothing!!!!

      • Tassie TomMEMBER

        @RT – you’re good at pointing out (hypothetical) problems, but you haven’t offered all that many solutions.

        As an employer myself, I employ “solutions” people over “problems” people any day.

      • Tassie TomMEMBER

        @RT – You say what you say in every thread – “Maintain the status quo; Any change is crap; I’m way smarter than anyone who suggests anything other than maintaining the status quo”

      • ResearchtimeMEMBER

        Not at all, I merely pointing out the obvious. Have your supposed high tech wind-mills and the like, I am merely pointing out some pragmatic issues, and suggesting a bit of old school coal. Because if your physics is actually any good, you would know the thermodynamic difference between coal and gas, and if you know a little about engineering, the bottle necks from peak use.

        This pie in the sky politico talk is great, but if it doesn’t match reality (and it doesn’t) – then you will do more damage to your cause than trying to defend the indefensible. I am all for renewables, but stupid political decisions have been made, and the situation is about to degenerate massively over the next decade. I am very serious, potentially 20% shortfalls within the next five to six years…

        Personally, I don’t care, don’t live in S.A.

  8. So when will the Vic government buy 51% of MEL airport?

    Or buy 51% of Avalon Airport and build a train station there?

    Some infrastructure should be government owned – the stuff that is a natural monopoly or has extremely high barriers to entry.

    • ResearchtimeMEMBER

      Totally agree… create government corporates, and they can run the operation like a business, with cheap debt under-written by the Government, but not actually on the government books! New government policy, new infrastructure needed, seed a new corporate, move on…

      Clearly a model not meant for education defence or health, but everything else – why not? Get things built, get things done…

    • Some infrastructure should be government owned – the stuff that is a natural monopoly

      Like land for example. Good luck taking on the robber barons.

  9. Called it.

    Was speaking with the head of one of Australia’s largest energy companies – wont say more – and this was in the pipe works.

    Will say this – there is plenty more to come.


  10. Tassie TomMEMBER

    This is awesome – I hope SA goes it alone and “sticks it up ’em”.

    Uni of Adelaide could focus their minds on developing the world’s best battery technology, and the Holden factories up north could be converted to battery factories. (The first factory to open in Australia for 20 years). They could export all over the world.

    If 80% of homes each have 100kWh of battery hanging off the walls (enough to recharge their cars), feeding into the grid as well as taking from it, then intermittent renewables are all the state will need.

    Jay and Tom could “Make South Australia Great Again”

    God I hope it happens.

    • I’ve ranted to others about this type of thing before. SA and Tassie should just figure out where they can get an advantage over the other states and go for it. Whack an NBN in Adelaide, throw in a land tax for some value capture and let Adelaide become the tech hub of Australia. Attract Telsa somehow. There is a lot of sunshine and soon to be unused manufacturing space in Adelaide.

      • Tassie TomMEMBER

        Tassie’s been doing ok since it started raining at the start of May 2016 – every month since we have been in the bottom two states (out of 5) for average wholesale price, and on the couple of occasions that we were not we were within $3 of being in the bottom two.

        The “power crisis” between December 2015 and May 2016 was completely man-made – Tassie produced too much power in the 3 years before that and net exported too much to the mainland. 2013-2015 were Carbon Tax years, but I’ve got no idea why they kept hammering production after the carbon tax got repealed until the spring of 2016 turned out to be dry. If the dams were 70% full when Basslink went down instead of about 25% full, it wouldn’t have even made the news.

        Interesting link re. cobalt. I suspect that in 10 years we won’t even be using lithium. I’m hoping that the Aluminium-Graphene-Air cells turn into something exciting – they might and they might not, but for every 10 fizzers there might be one game-changing success. Storage is almost economical right now in houses and in vehicles – one more big step forward and the whole world changes.

      • “The “power crisis” between December 2015 and May 2016 was completely man-made”

        Tassie Tom,

        Most of these crisis are “man-made” – both in Tassie and SA. If they had not been greedy and overloaded their interconnector to Victoria, the dams would not have been almost empty and the electricity could have come back from Victoria. Since then, they have invested in diesel generators – which must be a comfort to consumers. 🙂

        “I suspect that in 10 years we won’t even be using lithium”

        Well, they have tried pretty well every combination in the periodic table so I admire your optimism. The Liebig minimum is cobalt. Plenty of lithium out there – but expensive to extract.

        I suspect we will have to go back to a less complex society.

    • If 80% of homes each have 100kWh of battery hanging off the walls (enough to recharge their cars)

      It really is a good idea to walk before you can run. 10 kWh of battery is enough for the vast majority of homes to be almost entirely self-sufficient through the summer months even with a modest amount (3-4kW) of solar cells. Avoiding getting blacked-out is a bonus. It’ll be nice to charge your car from home-generated energy one day but there are some very desirable but much easier objectives before then.

      • Tassie TomMEMBER

        It’s quite true, we need to “Walk before we can run”.

        I think we will be “running” sooner than we are currently projecting.

        We are one significant advance away from batteries being useful. By that I mean clearly superior for homes and clearly superior for vehicles. Right now the situation is “Maybe better in some cases but still usually one for the early adopters”.

        When this advance happens, and it will, the whole world is going to change.

    • one significant advance away

      100kWh is significantly more than 10kWh. Probably at least two significant advances away.

  11. I suspect a lot of this is posturing for the coming election period in SA.

    The Libs sold the power system in 1999. So look for a theme of “power shortages are the fault of the Coalition, and Labor is doing something about it” over the coming year. Any power outages over the next year, the Liberals will wear.

  12. Philly SlimMEMBER

    Watch for TransGrid to proffer the SA – NSW high voltage interconnector.

    That said, it is a long line all the way to Broken Hill and then into SA. You could really get a blackout if you put your eggs in that one basket and it went down.

    • if you put your eggs in that one basket

      There’s actually another basket, the Heywood interconnector to Victoria. It would seem logical to make the NSW-SA interconnector at least as capacious as the Heywood interconnector. Indeed if the NSW-SA interconnector had had the same capacity as the Heywood interconnector then last September’s huge blackout would not have happened.