South Australia's $550 million energy plan will improve the state's power security and reliability, ratings agency Moody's says.
The agency has released a report on the energy strategy, outlined by the state government last week, which includes construction of a new gas-fired power station along with battery storage for SA’s renewable energy.
Moody’s says having extra gas generation that can be brought quickly online would reduce the risks of blackouts at times of peak demand.
However, it says questions remain over whether the plan will have an impact on power price volatility.
Moody’s says there will also be a hit to the budget bottom line, although it believes SA has the financial flexibility to fund the increased spending.
“Moody’s central scenario is that the energy initiatives should, if executed as outlined, improve the state’s energy security and reliability over time,” the agency said in a statement on Tuesday.
“Furthermore, these considerations will influence the investment climate in the state, which in turn is a factor in managing its economic transition after the forthcoming closure of its motor manufacturing industry later in 2017.”
The agency’s assessment comes as a new poll conducted by communications consultancy Essential found that 68 per cent of more than 1000 people quizzed across Australia about the energy plan approved of the state government’s approach.
Among South Australians, that figure dropped to 59 per cent.
Public approval aside, the Liberal opposition maintained its stand that the power plan would drive up electricity prices at a time when the state’s energy policies had delivered the highest rate of disconnections and the most customers on hardship programs.
Energy spokesman Dan van Holst Pellekaan said South Australians were almost twice as likely to have their power cut off than consumers in other states and the situation was likely to get worse.
“South Australian households are facing surging electricity prices that will result in ever greater numbers of households being disconnected,” he said.