The South Australian and federal governments have come to an agreement to provide $1.08 billion towards reducing emissions and energy costs. Under this deal, the commonwealth will contribute $660 million and South Australia will contribute $422 million.
The governments weren’t very specific about how this money would be spent, but they did give us some details.
One of the key components of this deal is to acquire more gas. They have implemented the following goals in order to provide South Australia with more reliable and affordable gas:
- 50 petajoules per annum by end of 2023
- 80 petajoules per annum by end of 2030
When discussing the reasons for these goals, Federal Minister for Energy and Emissions Reduction Angus Taylor said that they intended to prevent forecast shortfalls in the gas market. However, the Australian Energy Market Operator (AEMO) has forecasted that there wouldn’t be a gas shortfall in the coming years. In response to this, Minister Taylor said that the AEMO has made mistakes in the past, and that they’ve under-forecasted the amount of gas needed multiple times.
Part of this deal is also providing up to $100 million joint support for Project EnergyConnect. This project will involve the construction of a 330-kilovolt above-ground transmission line connecting South Australia and New South Wales, with an added connection to north- west Victoria. This transmission line will have a transfer capacity of approximately 800 MW. The project will have an estimated annual savings of $100 for SA residents and $58-$64 for NSW residents.
This deal is also planning on spending up to $110 million on solar thermal and other storage projects in SA, but there weren’t any other details for this section. However, on a related note, the Clean Energy Council recently released a study stating that batteries are superior to gas in terms of both cost and emissions.
Carbon Capture and Storage, Electric Vehicles, and Hydrogen
Finally, the governments intend to spend $400 million in investments towards CCS, EVs and hydrogen. They say that this spending is to help South Australia not only meet but also beat Australia’s commitments under the Paris Agreement.
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