Kangaroo Island, the iconic tourist location south of Adelaide, has lodged an unprecedented challenge to the state’s main network operator over its decision to effectively close an opportunity for the island to become a major exporter of renewable energy.
The island’s administrator and council have become the first to use new rules that allow network spending decisions to be challenged by local communities. They say the decision lacks transparency and they want a review – and they are questioning the whole process.
Some of the island’s residents had hoped to convince the network operator to junk plans to replace the ageing cable that links the island to the main grid, and instead support a home-grown renewable energy plan to enable the island to use renewables – wind, solar and biomass – to meet its own electricity needs.
It was a project, its proponents said, that could pioneer a new age of renewable energy, on what was the country’s first free-settled colony.
That plan, however, came undone after South Australia Power Networks revealed that the cost of replacing the cable would only come to around half of its previous estimates ($25.6 million versus $45.6 million). That undercut the 100% renewable energy plan.
But SAPN earned the islanders’ wrath when it decided on a new 33kv cable to the island, rather than a 66kv cable that could carry more capacity.
The Kangaroo Island community wants a 66kv cable installed, noting it would cost just $1.9 million more, would ensure that all future needs are met, and offer an opportunity to export power back to the mainland.
As a result, the Commissioner for Kangaroo Island and the Kangaroo Island Council have lodged a formal “dispute notice” to the Australian Energy Regulator, the first time a Regulatory Investment Test has been disputed.
“This piece of crucial infrastructure must be able to provide for growth in demand for electricity on Kangaroo Island and for the island’s potential to harness its natural resources and export energy back to the rest of South Australia,” mayor Peter Clements says.
The islanders want to keep their options open – they have vast swathes of eucalyptus plantings that could generate biomass power, not to mention excellent wind resources – and also question if SAPN has taken into account nearly $200 million of new developments.
Wendy Campana, the island’s commissioner, says the community is questioning the whole process, and why SAPN originally described the best option as a 66kV cable that would cost around $45 million, when they ended up settling on a cable with half the capacity and half the price.
According to advice it has received, the commission suspects that the network owner will get a “bonus” of around $10 million for having found a “cheaper option”.
“We are actually questioning why it can go to submissions, and say 66kV and $45 million, (then say) we only need 33kV and $25 million. They get to keep the difference.”
Campana says that if it was clear that the cable would cost around $25 million, then proponents of competing options, including those of high renewables, might have been able to better tailor other options.
As it is, one of the proponents of the 100 per cent renewable energy plan, the Sydney-based Institute for Sustainable Futures, is regretting the decision, saying that there was an opportunity for a mix of wind, solar, storage and biomass that could have looked after the island’s needs.
However, ISF’s Chris Dunstan says it was a difficult plan to pursue without the enthusiastic support of a majority of the island community. “It seems like a lost opportunity,” he says.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.