South Australia taps new gas plant, batteries to fix power crisis

Tue Mar 14, 2017 3:10am EDT
 
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By Sonali Paul

SYDNEY (Reuters) - South Australia, the country's most renewable-energy dependent state, outlined plans on Tuesday to spend A$510 million ($385 million) to keep the lights on, just four days after Tesla Inc (TSLA.O: Quote) boss Elon Musk offered to save the state from blackouts by installing large-scale battery storage.

The plan includes A$150 million to encourage the development of a 100 megawatts of battery storage, possibly from Musk or from local providers. The state will also build and operate a new A$360 million 250-megawatt gas power plant to stabilize its electricity system.

The South Australia government came up with the emergency plan after a state-wide blackout last September during a storm left homes and businesses in the dark for up to eight hours and paralyzed some industries for up to two weeks.

"Today, South Australia takes hold of its energy future. We have a national electricity market which is failing not only South Australia but failing the nation," state Premier Jay Weatherill said in a statement.

The state, which relies on wind for about a third of its power capacity, has become vulnerable to outages and soaring prices as it does not have enough back-up power when the wind is not blowing.

South Australia's last coal-fired power station shut down last May, as it was making losses, and France's Engie SA (ENGIE.PA: Quote) mothballed one of two units at a gas-fired power plant for the same reason.

On the batteries front, Weatherill said he was speaking to a range of providers.

"We want as much local content as possible," he told a news conference. "We also need to put in the balance the reputational effect of attracting an international player of the size of Elon Musk to South Australia. "   Continued...

 
A Tesla supercharger is pictured at the Tesla store in Sydney, Australia, March 13, 2017.    REUTERS/Jason Reed