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Posted: 2017-03-14 13:24:32

A state premier's responsibilities are clear enough. Putting your state first has been played out many times since Federation, and is getting another run-through in South Australia.

Reducing the vortex of problems that has hit South Australia's electricity supplies during the past six months – serial power blackouts that are likely to worsen with the planned closure of the Hazelwood power station – to a series of sound bites is only to be expected.

South Australia 'going it alone'

The South Australian government says it's taking back control of the state's electricity generation; the federal government accuses it of 'going alone'. Courtesy ABC News 24.

"It's about incentivising South Australia power for South Australians," Premier Jay Weatherill​ said on Tuesday of the six-point plan outlined to resolve its energy woes, laying the blame on the national electricity market and Canberra's dismantling of the carbon tax.

South Australia's measures – principally two new gas power stations with one to be owned by the government, battery storage, exploration incentives and the like – won't insulate the state from electricity shortages, which could recur well before year end.

And the decision to give the energy minister extraordinary powers of market intervention threatens to open a Pandora's box of issues at a time when many in the electricity market are calling for a more cautious approach overall to help cope with the energy market's stresses.

Despite the big headline of a shiny new power station, this is no quick fix for any power shortages. And where will the gas to fire the new power stations come from, and at what price, since the high gas price is why the Pelican Point power station sits largely unused.

There are cheaper options, especially since Mr Weatherill has conceded the state-owned station could lose money. Similarly, rolling up the bulk of the government's electricity contract into a single deal with a new provider could work to force an existing supplier out of the market. After all, this proposal won't result in a large new block of power demand.

Exploration incentives, including to farmers so they don't block oil and gas companies from coming onto their land, also raise questions. Any gas found must be offered first for power generation, then for industrial and household use before being available for sale across state borders. But whether this will emerge as a gas reservation policy is not clear.

And at the end of the day, blaming Canberra is an important part of the mantra, especially for a Labor government.

"An emissions intensity scheme would have brought on South Australian gas before Victorian coal," Mr Weatherill said. 

Malcolm Turnbull walking away from an emissions intensity scheme in December, the February blackout and the closure in a few weeks of the Hazelwood power station forced the government to act.

"All of those factors have led us to the conclusion that we need to take control of our own future. We need to protect ourselves before there is some sort of coherent national energy policy emerging at that federal level. "

"We've got market failure. We know there is an investment strike. The private sector just isn't building power generation."

Yes it is, just not baseload capacity, which can operate 24 hours a day, when renewable energy can't.

South Australia is open to criticism for going it alone and not waiting for the Finkel Review's recommendations before acting. But the reality is any response to Finkel will itself take time. So at the end of the day perhaps it had little choice.

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