A decade low in electricity market emissions Opinion Article

Nov 16, 2012 - 3:00pm

This article first appeared in ClimateSpectator on 16 November 2012.

By Hugh Saddler and Graham Anderson. Saddler sits on the Board of The Climate Institute. 

This is the fifth monthly CEDEX update on emissions from the National Electricity Market, containing CEDEX graphs for electricity up to the end of October 2012. As described in the July 2012 CEDEX update, what is called ‘demand’ in the NEM is the total electricity generated by all power stations despatched by AEMO. It includes all ‘big generators’, including large wind farms and hydro generators, as well as the major coal and gas-fuelled generators.

In the year to October 2012, greenhouse gas emissions fell to the lowest level since the year ending September 2002. Emissions were 21 million tonnes CO2-e, equivalent to a drop of 11.5 per cent from the highest level reached during the intervening 10 years, which was in the year to December 2008. This reduction is equivalent to approximately 4 per cent of Australia’s total national greenhouse gas emissions. The electricity sector is therefore making a significant contribution towards Australia achieving a real reduction in its emissions. Demand for electricity supplied by NEM generators continued to fall, showing no sign of the upturn projected by Treasury modelling and, with less certainty, by AEMO in its most recent Statement of Opportunities.

The latest data provide no clear evidence that electricity consumers have significantly changed their behaviour as a result of the July price increases. Demand has been falling at an average rate of about 2 per cent per year for over two years, and October 2012 saw a continuation of this trend.

Coal share of NEM generation continues to fall. In NSW, all four units at Eraring were shut down for most of the month, to allow repairs necessitated by a major steam leak failure at one unit during September. One unit at Bayswater was off-line for much of the month. In Queensland, one of the two units at Callide C was out of service for the whole month and, as reported in the media at the time, one of the four 350 MW units at Tarong was shut down for an indefinite period early in the month. In South Australia, by contrast, the relatively small Northern power station operated at near full capacity for most of the month, displacing output from the ageing Torrens Island gas fuelled steam power station.

Overall, generation at black coal power stations is 18 per cent below its peak level, reached four years ago, and is at its lowest annual level since mid 2000, over which period black coal’s share of NEM generation fell from 63 per cent to 52 per cent.

Annual generation at brown coal power stations in Victoria also fell for the third month in a row, a reduction marked by the widely reported decision of TRUenergy (Energy Australia), the owners of Yallourn power station, to shut down one of the four units indefinitely. Other units were shut down for short periods during the month, so that during most of the month only two units were in fact operating. Total brown coal generation in October was at its lowest level since November 2002, and supplied 24 per cent of NEM generation, compared with 27 per cent 10 years ago.

By taking account of net flows on the interconnectors between state regions, it is possible to estimate net demand for electricity from the NEM in each State. Unsurprisingly, the fall in annualised demand from the peak of late 2010 is evident in all five states. The reduction has been greatest in NSW (7 per cent) and least in Victoria (3 per cent). It is 6 per cent in Queensland and 5 per cent in South Australia and Tasmania.

Consumer (business and household) actions driving the demand reduction include (in no particular order):

-- Making energy efficiency improvements;

-- Energy conservation; and

-- Installation, or increased use of ‘non NEM’ energy sources – PV, solar hot water, co-generation etc.

In turn, these actions are driven by one, or a combination of:

-- Higher electricity prices;

-- Energy efficiency programs aimed at changing energy using behaviour;

-- Regulatory measures to mandate increased energy efficiency of appliances, equipment and buildings;

-- General economic conditions.

Unfortunately, lack of data makes it impossible to estimate the relative contributions of these actions and their drivers with any certainty.

Hugh Saddler

Dr Hugh Saddleris currently a Principal Consultant with Pitt&Sherry and the Managing Director of SustainAbility Advice Team Pty Ltd. He is also an Adjunct Professor at the Australian National University. He has a degree in science from Adelaide University and a PhD from Cambridge University. He is the author of a book on Australian energy policy, Energy in Australia, and over 70 scientific papers, monographs and articles on energy technology and environmental policy, and is recognised as one of Australia's leading experts in this field.
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