Are the lights still on in South Australia?

Yesterday, I called a friend of mine in Adelaide. Beyond the usual niceties to start the call my first question was: ‘is the power out?'

Perplexed, he answered in the negative, no doubt wondering whether I had control of my faculties.

It was a strange first question to come from a friend you haven't spoken to for a month, after all. Especially from an avid Richmond supporter after the team's biggest win in years.

But I was concerned for the state of South Australia after receiving some interesting news during the day – wind now makes up 31 per cent of the state's power supply, with solar PV accounting for another 3.5 per cent.

According to a leading energy advisory firm (Energy Quest), wind already “appears to be the new baseload.” Not bad in spite of the campaign against wind by they-who-shall-not-be-named.

But while green groups were likely dancing in the streets, I was worried the lights in those streets might have gone out. I have been told for years that wind and solar are not capable of supplying power consistently enough to power one house, yet alone be able to supply a third of the energy needs for an entire state.

It appears to be all a Y2K-like false alarm however, with everything operating as normal.

Build, baby, build

People are always afraid of what's different.

It's why Australian energy ministers have been so keen on geothermal, because they can most readily understand the concept of drilling for energy. You can't dig up solar and wind power.

But while you may not dig, you can still receive. And South Australia is doing so in spades, making the ‘wind is the new baseload' claim credible.

Since the last March quarter, wind's share of South Australia's energy supply was 31 per cent compared to 21 per cent 12 months prior. In the meantime, coal's share dipped from 30 per cent to 26 per cent, while gas has fallen from 45 per cent to 39.5 per cent.

Pricing

Not only are wind and solar playing increasingly significant roles in the power grid, but they are also helping to make wholesale electricity prices cheaper. In the March quarter, wholesale electricity prices were between 30 and 60 per cent cheaper in the eastern states compared to a year ago. Energy Quest said the reasons for the wholesale price falls were “lower demand for grid power and the growth of wind and solar.”

South Australian wholesale prices fell 50 per cent, while the country's most heavily reliant coal state, Victoria, only realised a price fall of 31 per cent. Average wholesale prices in Victoria, the only eastern state to have coal increase its output for the quarter, fell to $24.53/MWh from $35.50/MWh. South Australian prices fell to $26.17/MWh from $51.82/MWh. The gap is closing rapidly.

Obviously the switch to a sustainable energy future is a gradual one to be made over decades, not in the next year or two. But the progress with renewable energy in South Australia is promising and shows that with a friendly policy environment – for example, no 2km wind farm exclusion zones – great strides can be made.