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Category: Business, Economics and Finance / Electricity Energy and Utilities / Industry / States and Territories

SA blackout costs revealed with fears of more outages

Friday, 9 Dec 2016 09:10:32 | Nick Harmsen

Police direct traffic around the CBD in Adelaide after the power network stops working. Wednesday September, 28, 2016. (AAP: David Mariuz)

South Australia's state-wide blackout in September cost businesses $367 million, according to the state's peak business lobby.

Key points:

  • Median cost of the blackout on SA businesses was $5,000
  • Business SA concerned about further blackout over summer
  • Lobby group wants PM and premiers to listen to chief scientist about energy sector

Business SA's survey found almost a third of the cost was borne by four big businesses — Arrium, Nyrstar, BHP Billiton and Oz Minerals — when storms swept across the state and caused five system faults across the electricity network.

The blackout lasted from a number of hours in some areas to several days in other regions including the Eyre Peninsula, where businesses' median costs associated to the event was about $10,000.

Business SA's Anthony Penney said the result could have been far worse.

"The median cost for all businesses including the loss of production, trading, wages paid even though they weren't operational was $5,000," he said.

Mr Penney said the blackout happened at 4:00pm but cost to businesses would have been "significantly higher" if it had of been earlier in the day.

The group surveyed about 200 businesses to gain information about the impacts of the blackouts.

It found the blackout cost to Arrium, Nyrstar, BHP Billiton and Oz Minerals was about $115 million.

It also found only 37 per cent of businesses had business interruption insurance and of those businesses, more than half were not covered for any costs associated with the blackout.

Only 12 per cent of businesses had a back-up generator.

Summer blackout concerns for business

Business SA said it was deeply worried by the prospect of further blackouts over the coming months.

What do the AEMO's findings into SA's blackout mean?


South Australia's ABC News political reporter Nick Harmsen breaks down the latest findings from the Australian Energy Market Operator into the state's recent blackout.

"Business SA and the broader business community have serious concerns that come this summer if there are consecutive days of extreme temperatures in Victoria and South Australia, that is going to place additional pressure on the interconnector, on the system and that we're going to have rolling brown outs," Mr Penney said.

He has called upon the South Australian Government and the Australian Energy Market Operator (AEMO) to make clear what plans are in place to guarantee supply.

"The market operator has indicated that there are reserve shortfalls come this summer but that there are plans in place to ensure there won't be any disruptions," he said.

"Business SA has called on Government for transparency and assurances that rolling brown outs won't cause disruption and further cost to business.

"Business is lacking confidence. Confidence in investment, confidence in reliability and security. Perception becomes reality.

"We need to be communicating that things are being done to address this situation."

Lobby urges governments to listen to chief scientist

The lobby group also offered a veiled criticism of the Federal Government's decision to reject an energy intensity scheme before chief scientist Alan Finkel delivers a report on the electricity sector to the Prime Minister and state premiers today.

A leaked copy of the report refers to an EIS as being good option to reduce emissions and to keep electricity prices low.

"We are encouraged by and looking forward to Dr Alan Finkel's findings," Mr Penney said.

"We are though again, concerned that the results are going to be highly politicised and that the end result being a complete lack of action.

"We're not wanting a blame fest, we're wanting a road map and consideration, with bipartisan support, state and federal governments, on how to move forward transitioning the electricity market to a low-carbon future."

Mr Penney urged the Prime Minister and premiers to listen to the chief scientist's recommendations.

"Yes, we would expect government to listen to him because he's representing the broader business community and all of the stakeholders in terms of the entire energy market.

"So without listening to his findings, where are we going to go? The whole purpose of having the Finkel review was to understand the complexities of the situation that we're currently in."

AustraliaPlus


 

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