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SA Budget 2009 « Previous | |Next »
June 5, 2009

Labor Governments in South Australia operate with the overhang of the 1980s when the then Bannon Government came close to bankrupting the state. Rann Labor has always presented itself as the party of probity, even parsimony, and they make a big deal of the state's triple-A credit rating from agencies such as Standard & Poor. They are economic conservatives, rather than Whitlamites.

This budget is no different--- the Government is cancelling new prisons (a new men's and women's prisons at Murray Bridge and a new youth detention centre), capping public sector pay rises at 2.5 per cent per annum for four years, and plans to cut $750million in government outlays. Public transport fares will increase and government charges will rise by an average 4.2 per cent. And there is no new tax relief. The state's revenue has fallen, and there would be a Budget deficit of $265 million in 2008/09, a deficit of $304 million in 2009/10, with the Budget returning to surplus in 2010/11. Unemployment will continue to rise. The State retains triple-A credit rating.

So we need to look on the margins of the budge to discern any difference or new becomings. First, the state would spend around $2.1 billion over four years on water security, including the desalination plant, wastewater recycling and stormwater harvesting and reuse.However, no water had been allocated for new environmental flows for the Murray River whilst storm water initiatives continue to receive marginal finding.

What we also find is that SA is claiming that it can carve out a new industry for South Australia so the state could become the renewable energy hub for Australia. South Australia, according to the Rann Government, had 56per cent of the nation's wind power, 90 per cent of its geothermal investment and 30 per cent of solar power. It will reach the 20 per cent renewable energy target by 2013 rather than 2020. SA's 2020 target is 33 per cent.

A region with abundant renewable energy potential should be actively moving to make use of it. How realistic is the state's 33% renewable energy target of the state’s electricity generation sourced, and by what energy sources will this be achieved? Is the Rann government implying that SA can become self sufficient in electrical generation? Does it look good because the other states are doing next to nothing?

But let us accept that SA is making the right moves re green jobs and businesses and ask what investment is there is a knowledge economy based around the shift to a more sustainable mode of living? Well there is a new $20 million renewable energy fund over two years to support the research, development and commercialisation of renewable energy technologies with the first project to be a $1.6 million geothermal research centre at the University of Adelaide. These are small steps, but at least they are not giving truckloads of money to coal or sucking up to the big polluters.

Barry Brooke at makes some good points about SA and renewable energy. He says:

SA has a relatively small electricity demand compared to the national total, an already well developed renewable energy infrastructure, and some of the best resources in the world to tap into. The other states are way behind in build out, as some of the figures in the press release indicate. But most importantly, SA can reach a 33% level with no requirement for large-scale energy storage, and potentially no further fossil fuel backup. The state is connected to the large east coast grid, powered predominantly by coal, and can draw on this abundant supply via the Murraylink interconnector when the wind stops blowing and the sun stops shining.... We can also sell to the east coast grid when delivery is near peak.

Like WA SA has excellent wind resources especially along the west coast of Eyre Peninsula. Will SA do with solar what it has done with wind? Or is geothermal going to provide the base load power?

| Posted by Gary Sauer-Thompson at 1:44 PM | | Comments (2)


If SA's target is 33% renewable energy target of the state’s electricity generation sourced by 2020, then where does the other 67% come form?

My guess is that 67% of SA's baseload power will be drawn from low grade brown coal from Leigh Creek and gas from Moomba in the north-east of South Australia.

The coal is used by the Port Augusta Playford power station and the nearby Northern Power station. These are the only coal-fired plants in South Australia and they supply around 30% of the state’s electricity. NRG Flinders purchased the former Electricity Trust of South Australia Leigh Creek coal mine and the two Port Augusta power stations in 2000 as part of the Olsen state government’s privatisation campaign.

The remainder of baseload power is sourced from gas from the Cooper Basin, which is used by the Torrens Island power station. Moomba is becoming increasingly unreliable with three incidents over the past two years - and declining reserves. The Moomba processing plant has been run down. We have an ageing plant and under-spending on critical maintenance. Moreover, the gas will runout.

Even though a new gas pipeline from Victoria is under construction, the budget signifies a turn to geothermal for alternative baseload power. There is no need for SA to take the nuclear option.

My guess is that South Australia's power industry has been marked by chronic underspending resulting in sharp hikes to electricity prices over the past few years due to the lack of generating capacity once the industry was privatised.