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Tensions between the federal Australian government and the state of South Australia reached new heights at a press conference today, where the state’s Prime Minister attacked the federal Energy Minister for supporting a US$1.54-billion (A$2 billion) hydropower project amid a growing threat of power shortages in the south and east of the country.
The live disagreement—which some media outlets are saying was unlike anything they had ever seen—included the two political rivals standing next to each other, sharing a single microphone as they hurled insults, mostly about Australia’s renewable energy and power outages, and reached crescendo with Frydenberg suggesting that Weatherill should step down as Premier of South Australia.
The go-ahead for the Snowy Hydro expansion project was announced earlier in the day by PM Malcolm Turnbull. It envisages a generating capacity increase of 2 GW, which will produce enough power to supply about half a million households.
Interestingly, the announcement came without Canberra consulting the co-owners of the project, which include New South Wales with 58 percent and Victoria with 29 percent.
PM Jay Weatherill called the Snowy Hydro project “a $2-billion insult” and added that Minister Frydenberg’s call for the state and Canberra to work together in energy matters was “a disgrace.” He went on to say that the Snowy Hydro will take between four and seven years to be completed, but South Australia planned to become energy self-sufficient sooner, referring to the state’s ambitious renewable energy initiatives.
Federal PM Malcolm Turnbull recently slammed South Australia and other states for their reliance on renewable energy, saying it was this very reliance that threatened the country with power shortages. His remarks came after the nation’s Energy Market Operator warned that power shortages could come as soon as next year unless gas-powered generation capacity is increased, mainly in the eastern states.
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Since then, two LNG providers have agreed to redirect some of their output to the domestic market to help solve the problem, after Turnbull said they may lose their “social license” to operate if they refuse to contribute to the energy security efforts of the government.
South Australia is the most renewables-dependent state in Australia, and in recent months has experienced several power outages, prompting strong criticism from the federal government. Weatherill’s comments at the press conference, however, suggest that the state government is determined to go ahead with its renewable energy plans, despite the outages.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.