Keeping the lights on: lessons from South Australia’s power shock

Keeping the lights on in SA has been
something of a problem of late.

Soaring South Australian wholesale electricity prices in July have exposed the urgent need for Australia to develop climate change and energy policies that combine to maintain reliable, affordable and sustainable power.

In that month the state’s wholesale electricity price averaged $230 per megawatt hour – three and a half times the price in eastern states.

The price even skyrocketed to nearly $9000 per megawatt hour on July 7, when a lack of wind, coupled with the closure of two coal plants and the temporary closure of a back-up electricity connection meant that gas was generating nearly all the state’s power needs.

The intermittent nature of wind – which now generates about 40 per cent of South Australia’s electricity – creates challenges for the price and reliability of power generation in the state.

Yet while the high July prices triggered a furious blame game, criticisms of wind farms, gas generators or the electricity market are alarmist and unfair. The market worked, the lights stayed on and prices have since fallen to levels more comparable with the eastern states.

Read the Grattan Institute story Tony Wood and David Blowers - “Keeping the lights on: lessons from South Australia’s power shock.”