Jay Weatherill’s energy plan involves the construction of a government-owned 250MW gas-fired power plant to provide emergency back-up power and system stability services for South Australians, and power for his resources minister to instruct the owners of Pelican Point to turn it on. Yet his plans for cheaper gas, or any gas, will not work quickly and possibly will not work at all. Laura Tingle in an excellent article published under the title of Power sources: steaming Premiers and Pumped PMs tells us that on the futures market on Wednesday, the June contract for electricity in Victoria hit $147.50 per megawatt hour, compared to a price for the March contract of just $80 as energy traders put a price on the closure of Hazelwood in Victoria at the end of March.
Meanwhile a group of former BHP Billiton and BP executives is consulting with SA to build a private equity funded power station, using gas from a floating regasification plant sourcing gas from the North West Shelf and from Singapore, some of which may actually come from the Cooper Basin in the state’s north via Gladstone.
Is this for real, and how did we get into this ridiculous mess? Continue reading Gas to burn