Labor has stormed back to power in South Australia, unseating the Liberal government after just one term in a devastating result that saw state energy minister and deputy premier Dan van Holst Pellekaan lose his seat, among other ministers.
The result has enormous implications for the upcoming federal election and the future of national energy and climate policy. There is a real chance Australia will finally have one, after an absence of nearly nine years.
But it also matters at state level, in the state that in many ways matters most, because it is leading the world in the uptake of wind and solar and the technologies and protocols that will be required for a grid running on 100 per cent renewables.
Labor’s stunning victory – unthinkable just six months ago – will likely see the return of Labor’s elder statesmen Tom Koutsantonis to the energy portfolio he held for more than seven years up to 2018, a time when South Australia stole a march on the rest of the country, and the world, in the uptake of wind and solar.
But the return of Labor – now under the leadership of Peter Malinauskas – raises question marks about some of the signature policy initiatives of the Liberal Party, including the shape of green hydrogen policy which is seen as fundamental to unlocking up to $20 billion of new investment in the state, and making South Australia a renewable energy superpower.
There have been a couple of key points of difference between Labor and Liberal over the management of the green energy transition.
Koutsantonis was not keen, although he insists he did not oppose (at least at the end), the new $2.3 billion transmission link – Project EnergyConnect – that will South Australia to NSW, and which will likely unlock billions of dollars in new wind, solar and storage investment in both states.
Koutsantonis says he has had question over the scale of benefits to South Australia. But the reality is that project is now locked in and has begun construction. What is less clear is the shape of the state’s green hydrogen policy going forward.
Both Liberal and Labor see huge potential for green hydrogen in the state with the biggest share of wind and solar in the world (64 per cent in last 12 months), and massive resources that are yet to be tapped.
But while the Liberals went for a series of hydrogen hubs, including one huge facility at Port Bonython that has attracted a number of big name investors, including Fortescue, Origin and a group of Japanese and other international companies, Labor has opted instead for a government funded project at Whyalla.
Just weeks ahead of the poll, Malinauskas unveiled a plan to build the government-funded hydrogen hub at a cost of $592 million, that would include a 250MW electrolyser and a 200MW hydrogen-fuelled power station.
It says this will be a catalyst to $20 billion of new hydrogen investment, but the focus on a hydrogen power plant being the key to provide “firming” capacity to support renewables in the state has also raised eyebrows about whether it is the smartest and cheapest avenue. Koutsantonis has insisted that it is, comparing it to the Tesla big battery at Hornsdale that the previous Labor government funded being losing power in 2018.
How these two hydrogen plans dovetail with the other – if they do at all – remains to be seen. The Liberals had insisted that a government-funded hydrogen hub is not needed, and is a waste of taxpayers money.
The Liberal government of Steven Marshall got off to a rocky start in 2018 with some mixed messages about the future of the household battery scheme that Labor had instigated, but van Holst Pellekaan has shown how being a Liberal minister should not be a barrier to supporting a clearly defined green energy transition.
Van Holst Pellekaan, along with NSW energy minister and now Treasurer Matt Kean, have been among the strongest advocates of a rapid transition to renewables.
And in doing so, they have underlined the poverty of ideas and ideological dogma that has hamstrung progress on the federal front, particularly under prime minister Scott Morrison and federal energy minister Angus Taylor.
While van Holst Pellekaan openly promoted a target of “net 100 per cent renewables” by 2030, and “500 per cent renewables” by 2050, and Kean laid out a plan to replace possibly the entire coal fleet within a decade.
Their federal counterparts have been reduced to an unrelenting defence of coal and gas, against all economic and environmental considerations, and mind-numbingly stupid attacks on new technologies like EVs and batteries.
Van Holst Pellekaan has also expanded the state’s home battery scheme, worked closely with AEMO to tackle some of the technical challenges of the switch to renewables, and laid out a well-defined EV strategy and infrastructure investment. The one missing link has been pumped hydro, but that may be because there is no longer a commercial case for it.
South Australia is poised to make a big leap in its renewables share – even beyond the 64 per cent level it is at – with the 317MW Port Augusta Renewable Energy Hub ramping up, along with the next stage of the Lincoln Gap wind project and the first 412MW wind stage of the massive Goyder South project.
In some ways, Labor doesn’t have to do much at all, apart perhaps from ensuring that the home battery scheme is rolled out properly, and they keep a close eye on the innovations and programs needed to deal with the technical challenges around the growing share of rooftop solar, which will now reach 100 per cent of local demand for the first time on their watch. That’s why the shape of the hydrogen policy will be crucial.
The switch to Labor also poses problems for federal energy minister Angus Taylor, assuming the Coalition is able to retain power at the federal election due in May, which seems increasingly unlikely as Morrison poll ratings plunge.
It means that of the six state and two territory energy ministers helping to form new market rules, only two are Coalition ministers (NSW and Tasmania). One of them – NSW’s Kean – has been openly critical of Taylor’s policies, and Tasmania appears only interested in getting funding for the Marinus Link.
It does, however, offer hope of a co-ordinated national strategy should Labor win at federal level, as now appears more likely. National policy has been so lacking that most states have had to “go it alone” and create their own strategies, including renewable energy zones and their own bespoke security measures.
This has caused confusion and added cost as big energy companies negotiate a raft of different rules and regulations. Labor has shown interest in embracing AEMO’s Integrated System Plan and has promised a $20 billion fund to support the infrastructure required.
Which means Tasmania may still funding support for Marinus, although that remains a controversial and hotly disputed project, on environmental and economics returns. Most of all, Australia will have a clear path to a zero emissions grid, and South Australia can continue to lead the way.
