Koutsantonis fires back in energy debate

DOUBTS: Smelter operator Nyrstar raised doubts about the state government's energy plan.
DOUBTS: Smelter operator Nyrstar raised doubts about the state government's energy plan.

Energy Minister Tom Koutsantonis has fired back after the state government’s energy plan was questioned by Nyrstar. The company raised doubts regarding the policy, according to Opposition energy spokesman and Stuart MP Dan van Holst Pellekaan.

Mr van Holst Pellekaan said the Liberal Party had released submissions made to the state government from Nyrstar, AGL, Momentum Energy and Alinta “pouring cold water on Labor’s claim its energy security target will drive down the price of wholesale electricity”.

He said Nyrstar had said on May 19 that “while the intention of the scheme is to lower wholesale prices, given the generation market structure and in particular the high concentration of generation in South Australia and the high underlying cost of the predominant fuel (gas), it is debatable whether the scheme will be effective at reducing wholesale pricing due to these factors”.

Mr Koutstantonis responded that independent modelling from Frontier Economics had found that the energy security target would put downward pressure on power prices as the government acted to increased competition in the industry.

“Our energy plan includes a range of measures designed to increase competition, including using the government’s own electricity procurement to bring a new participant into the market and building the world’s largest lithium-ion battery, which will lower the cost of stability services and add additional competition to the system,” he said.  Energy prices have risen dramatically for the smelter, according to Nyrstar’s half-yearly report. The costs increased period-over-period by about $20 million because of higher coking coal prices and by about $25 million across the zinc smelters due to greater electricity prices.