Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

My question is to the Minister for Industry and Science. Minister, the news last week that Alinta was closing its Flinders power stations—both Playford and Northern, maybe by March next year and certainly by March 2018—has sent shock waves through the Port Augusta community, a city of about 14,000 at the top of the Spencer Gulf, and Leigh Creek, a purpose-built mining town owned by the government 250 kilometres north with a township of about 500 people. In Port Augusta, 185 direct jobs will be lost, and in Leigh Creek, 235 direct employees will lose their jobs. Obviously, many more jobs will be lost with associated contracting industries in the broader community as the ripple effect works its way through.

Last Friday, following the surprise announcement in Thursday's The AdvertiserI think it was intended that the story would go out on Friday, but such are secrets—I met in Port Augusta with the state member for Stuart, Dan van Holst Pellekaan; the mayor, Sam Johnson; Business Port Augusta's David Versteeg; and the council CEO, John Banks. We discussed a range of ramifications that are not immediately obvious, including the loss of a large slice of council rates and the maintenance of Bird Lake. For those who do not know about Bird Lake, Bird Lake fronts up to Highway 1 and is an overflow pond of the cooling system. Significant groundworks have gone in around it to beautify it and attract birds into the area. Of course, if the power station does not exist and water is not pumped, it will dry out and become a stinking mess on the southern side of Port Augusta. The council has also anticipated a figure of almost $6 million that they expect to receive in the next 12 months or so over land development in the area, which would appear to be highly unlikely at this time.

Alinta, as a company, has made an admirable commitment to the nature of its departure from Port Augusta, including fully honouring the workers' redundancy packages, worth $75 million, and spending an estimated $100 million for the clean-up and restoration of both of the Flinders power stations—that is, Northern and Playford stations—and the Leigh Creek mine. They have also committed resources to counselling, career advice and assisting the adjustment of their workers. This company is being a model citizen on this issue, and we could not ask for much more. I thank the minister in particular for meeting with Sam Johnson, the Port Augusta mayor, and the CEO, John Banks, on Monday morning. He also met with a very exciting prospect in the area at the moment, Sundrop Farms, and I thank him for his time and consideration of the issues put before him.

There are two proponents of renewable energy projects in the area at the moment, and the government has a number of avenues from which it may be able to provide assistance, including the Clean Energy Finance Corporation, ARENA and the renewable energy target. I look forward to the further development of those proposals, and of course my door is always open to try to assist them in developing those proposals and to provide any assistance that I possibly can to help them.

The reason Alinta is closing its doors is that it is simply not possible in the current market for them to operate profitably. In fact, they have lost $100 million over the past four years on generation—that is almost $½ million a month. At the same time, they have invested $200 million in the operation, trying to bring it back to profit. All of that capital is now lost. I have been predicting the likelihood of such an outcome for some years in public and in this place and posing the question as to how the South Australian electricity grid would cope if such a situation came to pass. In my opinion it is an entirely predictable and inevitable result of the RET that perhaps got a little bit in front of where it was supposed to be in that it was meant to provide the new generation electricity as renewable into the grid when in fact it has replaced and forced out the bottom-end providers.

I have two questions for the minister. What will withdrawal of the Flinders power stations do to the consistency, reliability and price of electricity in South Australia? And what do you identify as the best opportunities for the Port Augusta community going forward?

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