TAXPAYERS will pay 20 per cent above regular power prices to run the $1.8 billion Port Stanvac desalination plant on renewable energy, electricity retailer AGL says.
AGL announced it had secured a 20-year deal to power the plant.
While AGL would not say how much the contract was worth, the Opposition estimates the plant will cost $75 million each year in power.
AGL did say the renewable power would cost the government 20 per cent more than regular power based on the current market.
AGL will have to divert Renewable energy to the project from its existing green Power program.
General manager, merchant, Jeff Dimery said the company went through ``a very extensive competitive process with the Government to secure the contract''.
``I am sure they are quite happy with the deal from their side and we are happy with the deal from our side,'' he said.
It would meet the desalination plant's power requirements with existing South Australian generators along with new Wind-farm projects in the pipeline.
AGL would also be able to meet the 20 per cent renewable generation targets set by the Government with current supply.
AGL stated the 132MW Hallet 4 wind farm near Jamestown would produce enough energy to supply the 500GW required by the desalination plant.
ETSA chief executive Lew Owens said AGL would not need to build new infrastructure to meet the plant's energy requirements.
``It doesn't mean they have to go out and build a couple of hundred megawatt of wind capacity - AGL has just taken that additional capacity out of the system,'' he said.
``What it does mean is that it brings forward the time that other ones (wind farms) come on board even though a lot of them were going to happen anyway.''
University of Adelaide director of the Centre for Energy Technology, Professor Gus Nathan, said SA's grid network was reaching its limits for renewable energy supply.
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