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South Australia Minister for Energy Tom Koutsantonis

Energy Security Target Start Date Deferred

Victor P Taffa

State Government will defer the start date of the Energy Security Target to 2020.

Energy Security Target was announced as part of the State Government’s $550 Million energy plan in March, to boost energy security and increase local competition by requiring energy retailers to source more power from South Australian generators.

“Energy Security Target is designed to both put downward pressure on power prices and improve system strength.” Minister for Energy Tom Koutsantonis said.

“However, since we announced the EST a number of changes in the National Electricity Market have delivered system security outcomes similar to those the EST would seek to achieve. These include new gas generation capacity coming online, new system security requirements from AEMO and the implementation of 49 out of 50 Finkel recommendations.”

Since announcing the EST a number of significant changes have occurred in the energy market that is delivering system security outcomes in South Australia.

These include recent changes in the National Electricity Market, such as AEMO’s requirement to have at least three synchronous generators operating in South Australia at all times, and announcements by private generators that will bolster synchronous generation capacity in the State.

Additionally, 49 of the 50 recommendations of the Finkel Review are being implemented, many relating to system security. South Australia has joined with other states in tasking the Australian Energy Market Commission to work with AEMO to immediately develop and design the options to implement a Clean Energy Target, after the Commonwealth failed to endorse that recommendation.

Modelling from Frontier Economics also indicates that for the EST to lower power prices it requires the operation of a more competitive energy market. By deferring its introduction to 2020 the EST will be more effective at putting downward pressure on power prices.

(AEMO) Australian Energy Market Operator


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