TiP

Despite the weekend song and dance about a carbon price, Australia still faces a major task in reducing greenhouse gas emissions this decade – even under the current target demeaned as “weak” by the Greens.

Just how big a job is well illustrated by the newest report on electricity supply and demand.

The Energy Supply Association’s 2011 yearbook records that in 2009-10, a year when power use was affected by the global financial crisis, Australia’s power stations burned almost 55 million tonnes of black coal in three states (New South Wales, Queensland and Western Australia) plus more than 70 million tonnes of brown coal in Victoria and South Australia.

Go back to 2000, the benchmark year for the national 2020 target, and black coal consumption in power stations was 51.7 million tonnes, while brown coal use was 68 million tonnes.

To deliver their share of the national abatement target, which is set at five per cent below 2000 levels, the black coal power stations would need to cut back to 49 million tonnes annual consumption in 2020 and the brown coal burners to 64 million tonnes.

However power demand is on an inexorable rise – and meeting new consumption largely from gas plant does not reduce emissions; it increases them.

The number of electricity consumers rose by a million over the decade to exceed 10 million in 2009-10 and can be expected to do so again this decade.

The Energy Supply Association forecasts that total energy generated by power plants in 2020 will exceed 273,000 gigawatt hours compared with about 223,000 GWh in the past financial year. (Line losses account for the difference between output and consumption, but it is output that dictates emissions levels.)

The bare statistics don’t reveal the other tough issue for attempts to decarbonise: the location of most of the demand and what fuels supply these loads.

A sideshow, but not an unimportant one, is Western Australia – where supply requirements have risen from 13,000 GWh a year at the start of the past decade to 17,000 GWh now and, according to ESAA, are on their way past 24,000 GWh by the end of this decade.

The main game over on the east coast is centred on NSW and Queensland. Supply requirements north of the Murray have risen from 108,000 GWh at the start of the past decade to more than 131,000 GWh at its end – and are on their way to 166,000 GWh by 2019-20, largely fossil-fuelled and mostly using electricity from black coal generation. This is 60 per cent of the national load.

Most of the carbon debate with respect to coal power has been focussed on Victoria, and to a lesser extent western South Australia, where the older, high emissions intensity power stations, and especially Yallourn and Hazelwood, are in the gun for closure.

Victoria’s load growth, however, has been low. Requirements stood at 42,000 GWh a year at the start of the past decade and at 48,000 GWh at its end. ESAA sees this rising to about 52,000 GWh by 2019-20.

Boiled down, Victoria poses a decarbonisation issue twice that of Western Australia but only a third of that arising north of the Murray.

Given that the demand trends signal that NSW and Queensland requirements will be about 200,000 to 220,000 GWh annually by 2030, and on the expectation that a large part of the coal fleet and an expanded gas fleet will be still in operation then, the carbon challenge in the NoM rather than the NEM should be the dominant feature of our debate, but it isn’t.

The Queensland government, by the way, has been anticipating that power requirements in the State would hit 69,000 GWh annually by 2020. The ESAA load forecast says this will be reached in 2015-16 and will exceed 75,000 GWh by 2019-2020.

The State government’s policy is to bring on 9,000 GWh of new renewable energy by 2020 – this fell short of its own forecast of the load gap by 12,000 GWh and this figure is now 18,000 GWh.

Building wind farms on the Eyre Peninsula of South Australia is not going to address the NSW/Queensland issue. Even building a couple of 1,000 MW nuclear power plants there won’t deliver a solution for the largest power region in the country. Building expensive solar farms at Moree and Chinchilla won’t solve anything much, either.

Decongesting the east coast transmission system – the “NEMlink” proposal – is an $8.3 billion, 11-year task to enable power to flow more readily across the east coast and no-one is talking about it in the weekend hullabaloo about a new renewables agency and so forth.

A $23 per tonne carbon price, or whatever the Prime Minister announces on Sunday, will not address the north-of-the-Murray challenge in any meaningful way. Playing games with who decides renewables subsidies is not a step in any direction worth having, either.

Perhaps the real news of the weekend is that nothing has happened to even start to address – other than in media-friendly gesture politics – the carbon challenge in NSW and Queensland, where, in electricity terms, it is by far the largest.

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