South Australia’s Government-owned emergency power plant is set to cost taxpayers $360 million, plus relocation and setup expenses.
Treasurer and Energy Minister Tom Koutsantonis revealed the price tag in his mid-year budget review after seeking permission to release the figure from the seller, APR Energy.
The Government has paid the US company $111.5 million to lease nine aero derivative diesel turbines, which are already installed at Lonsdale and Elizabeth, to prevent load-shedding blackouts over the next two summers.
But the Government has already exercised a contractual option to purchase the generators for $227 million.
It plans to install them at an as-yet undetermined site and operate them on gas, providing up to 276 megawatts of backup power.
The Government has budgeted $20.4 million to operate the power plant from 2019 to 2021.
It has also set aside a $72.8 million contingency fund, which is expected to cover the cost of relocation and set-up.
Mr Koutsantonis said the figures demonstrated the Government’s $550 million energy plan would be delivered on budget.
But that budget no longer includes the $75 million in loans for companies to invest in new renewable energy technologies.
Mr Koutsantonis said that money was not included because the money would eventually be repaid to Government.
“In terms of what we’d spend and not get back, it’s $550 million,” he said.
“The $75 million we were offered in loans we’ll receive back and they’re deeds linked to assets so we’ve got security over them.”
Industry organisation Business SA remains opposed to the purchase of the generators, arguing the energy market is too “dynamic” to make it worthwhile.
“There was never a need to spend $227 million now to buy generators which were still able to be leased for two more years with an option to buy, or perhaps contract a third party to provide the same level of service to maintain reliability,” spokesman Anthony Penney said.
“However, if the State Government does not permanently install the temporary generators with the associated infrastructure, the value of any potential re-sale should not be significantly reduced.”