Mid-winter can be dreary, but mine is brightened around this time by the arrival of the Energy Supply Association’s yearbook.
In its modern form, it has now been tracking electricity supply for four decades and has taken on gas as well in the past eight years as a result of the transformation of the Electricity Supply Association in to its present guise.
From 1991 to 2003, production of “Electricity Australia” was one of my key tasks as managing director of ESAA and the current “Electricity Gas Australia” has maintained the high standard we sought then and improved on it.
The latest issue landed on my doorstep at breakfast on Friday morning and I am still exploring its many facets, but my immediate attention has been on one of the book’s most interesting features: its rolling 10-year national power load forecast.
This table has proved highly prescient over a long period, but it has always dealt with an environment in which demand for electricity is on a rising trend.
Right now, every galah in the petshop is eager to explain to us the implications of a perceived sudden shift in direction for power demand.
Of course, there is no arguing with the fact that, under a range of influences, including international economic disruption and substantial domestic power price rises, demand for electricity has fallen back from the peak it reached in 2008-09.
(An indication of the trend can be found in the Australian Energy regulator’s weekly market analysis. In 2010-11, the year on which the ESAA report is focussed, AER says the “national” – ie east coast – market had a wholesale turnover of $7.445 billion for 204 terawatt hours of sales. By comparison, the 2009-10 market had a turnover of $9.643 billion for 206 TWh and the 2011-12 market, with a month to go at the time of the report, had sold 187 TWh with a value of $5.534 billion.)
The new ESAA yearbook reports that Australia-wide demand, having been very nearly static in 2009-10, fell back in 2010-11 by 0.6 per cent, a year in which the floods in particular saw consumption in Queensland drop 7.5 per cent.
This weekend, among other tasks, I have been looking at ESAA’s load forecasts over three issues of the yearbook, starting with the 2010 edition.
The furthest horizon consistently available in all three perspectives is 2018-19, with the forecast shifting out to 2020-21 in the latest edition.
The forecasts are pitched as system energy – the electricity sent out by power stations.
The Australian Energy Market Operator’s forecasts, which have been the subject of much recent publicity and have changed dramatically in the past two years, are focussed on the east coast. The ESAA data is national.
For the purposes of this comparison, I will look at two ESAA forecasts – one for the so-called NEM (the interconnected east coast market) and the other for the SWIS (the Western Australian integrated system in the State’s south-west).
First, the east coast:
In 2010, ESAA forecast that NEM system energy in 2018-19 would be 235,378 gigawatt hours.
In 2011, the forecast for that financial year rose to 241,841 GWh.
In the new yearbook the forecast has changed direction – it now sees 2018-19 east coast system energy at 237,873 GWh.
If realised, this would still represent an almost 22 per cent in the NEM load over a decade, not quite what the doomsayers and the environmental chorus have been suggesting lately.
Now, so that you may judge for yourselves how close this load forecasting exercise, which involves very considerable consultation by ESAA with its members plus access to external planning reports, can be, here is the version for 2009-10 published in the 2000 edition of “Electricity Australia.”
It said east coast system energy in that year would be 198,503 GWh. The actual result was 196,958 GWh.
So, no, given the uncertain economic and political environment in which we are living today, I would not be prepared to wager my hard-earned superannuation funds on ESAA being right about 2018-19 — but I am prepared to say that this industry forecast has a darned good track record and should be taken seriously.
The table, by the way, expects 2012-13 system energy on the east coast to be 209,529 GWh.
This is a little under 2,000 GWh below what it was predicting just two years ago for the NEM load this financial term.
Looking at Western Australia, where energy sent out by power stations has risen almost 10 per cent in five years (compared with an almost eight per cent fall in NSW since the 2008-09 peak and an almost static situation in Queensland), ESAA forecasts that there will be a 26.3 per cent rise between 2010-11 and 2018-19.
However, this is not the biggest system energy increase the association foresees this decade.
It estimates the Queensland load will rise by 35 per cent between 2010-11 and 2018-19, reflecting the expected requirements of the LNG trains and some new coal mines.
There are a multitude of commentaries to be made about the new ESAA yearbook.
I intend to embark on a number more in the in next 2-3 weeks, taking time out to deal with whatever else comes whirling past on this extra-ordinary energy carousel ride on which we are embarked at present.