Australia, South Australia sign A$1.1bn energy deal
The Australian federal government and the government of the South Australia state have signed a A$1.08bn ($840mn) energy deal, prime minister Scott Morrison’s office said on April 18.
The State Energy and Emissions Reduction Deal will “deliver secure, reliable and affordable energy to South Australians and help Australia continue to meet and beat its emissions reduction targets”, the statement said.
Under the agreement, the governments will pursue initiatives that create "additional dispatchable generation" to help deliver affordable and reliable power, unlock gas supplies to help prevent shortfalls in the market, kickstart work on a new interconnector between South Australia and New South Wales, and invest in emissions reduction projects.
The federal government will contribute A$660mn and South Australia will provide A$422mn under the agreement. The aim is to produce an additional 50 petajoules/year of gas by the end of 2023 and increase volumes by 80 petajoules/yr by 2030, increasing supply to users in South Australia and the broader east coast gas market.
About A$400mn in federal funding has been allocated for investment in areas such as carbon capture and storage, electric vehicles, hydrogen and other emissions reduction projects in South Australia. As per the deal, up to A$100mn joint support is meant for Project EnergyConnect through joint underwriting of early works on a 50:50 basis to boost the flow of power between South Australia and New South Wales. Also, up to A$110mn in federal concessional finance has been set aside for solar thermal and other storage projects in South Australia.
Morrison said the bilateral agreement is a key part of delivering on the government’s plan to ensure South Australians get a fair deal on energy, businesses get the affordable energy they need to create jobs and Australia meets our emissions reduction targets to address climate change.
“This deal also makes sure that Australia gets ahead and stays ahead in the new energy economy by supporting the next wave of technologies, with a A$400mn commitment for investing in key areas that have the potential to deliver new industries and opportunities for South Australians. This means more jobs and Australia not being left behind,” Morrison said.
Premier of South Australia Steven Marshall said the agreement coordinates efforts to deliver a hydrogen export industry in South Australia, carbon capture and storage to reduce emissions, the infrastructure needed for electric cars, and generate new revenue for farmers from carbon reductions.