Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Hansard source

I thank Senator Fawcett for his question. Of course he is interested, as am I, in energy security in our home state of South Australia. As Senator Fawcett would well know, last Wednesday at least 40,000 households and businesses in Adelaide lost power. This was at a time when South Australia had insufficient electricity generation within the state, as we were supplying only two and a half per cent of demand, due to low-wind conditions. The wholesale electricity spot price in South Australia, which had been averaging about $100 per megawatt hour, was regularly hitting the market cap of $14,000 per megawatt hour. The Australian Energy Market Operator is investigating this incident and will provide its report to the government shortly.

But of course this outage follows numerous other incidents, over months and years, of blackouts and brownouts. In particular, there was the state-wide blackout on 28 September, and there were further blackouts in December affecting some 200,000 customers, and others in recent months.

The state-wide blackout was estimated to cost South Australian businesses some $367 million. It particularly affected significant industrial operators, like BHP's Olympic Dam, Arrium at Whyalla and Nyrstar at Point Pirie. It affected manufacturers, like Michell Wool, who identified a $300,000 rise in the contract price of electricity—and, as they said last week, 'We've shut down two or three times; it was cheaper than paying the power bill'. It affected small businesses, like franchisees of a Royal Copenhagen business at Henley Square, who said, 'We're losing ice-cream hand over fist as soon as the power goes off'.

It does not matter if it is a small business, a big business, a pensioner or a student—everybody in South Australia is suffering as a result of this mismanagement of the electricity market in South Australia, the lack of generation capacity and the instability that has been created in that market.