Doing it by numbers

One of the more eagerly awaited business happenings of my year is the appearance of “Electricity Gas Australia,” the yearbook of the Energy Supply Association – and the new version was published late today.

Now call it cupboard love – I was responsible for the Electricity Supply Association version from 1991 to 2003 – but I think this volume is in a league of its own when it comes to energy data, and each year’s issue is never far from my elbow as I write for the Coolibah website, the OnPower website and “Business Spectator.”

The key message that ESAA wants to convey this year – the media statement is on their website – is that a shift in greenhouse gas emissions from power generation began as far away as 2007.

Chief executive Matthew Warren also wants to drive home the point that a substantial increase in renewable generation in an east coast market where demand has been steadily diminishing has shrunk sales values by 40 per cent in four years – to the tune of $4 billion.

However, he warns, low wholesale electricity prices are not necessarily a good thing. “They make life tougher for all suppliers,” he says,” including renewable energy generators – and they could have long-term effects on reliability and stability in the NEM.”

My first port of call in the yearbook is almost always the rolling 10 year load forecast. This has proved to be remarkably accurate over a period of at least 25 years but it has never had to cope with a down-trending demand line in the past.

One snapshot will suffice to show how the ESAA members’ mindset has changed over the past year as it has become only too apparent that the slide is a trend not a blip.

Last year, looking to 2015-16, the yearbook forecast that east coast market system energy (that’s the electricity sent out from power stations, not consumption) would reach 225,589 gigawatt hours.

This year, the annual’s projection for 2015-16 is for 205,053 GWh – that’s a nine per cent reduction in the outlook.

The other numbers I have seized on tonight with a certain amount of amusement are the data for consumption of black coal in New South Wales and Queensland.

Now you can hardly have missed the federal government and various persons of green persuasion carolling in the recent days about how the implementation of Julia Gillard’s carbon price on 1 July 2012 has led to an impressive decline in greenhouse gas emissions.

The rather large fly in this ointment is to be found in the fact that coal-burning in the two States peaked at more than 52 million tonnes a year in 2007-08 and 2008-09 and had dropped, according to ESAA, to just over 46 million tonnes in 2011-12. It’s a remarkable tax measure that can have such an effect before it is even applied.

The brown coal numbers (for Victoria and South Australia) went the other way: up from just over 69 million tonnes in 2007-08 to almost 72 million tonnes in 2011-12. One will expect to see them lower for 2012-13.

The other early data to which I gravitate are the figures for consumption.

What the new yearbook shows, in brief, is this:

East coast residential demand in 2011-12 was 6.9 per cent down on the total for the previous financial year – 50,028 gigawatt hours versus 53,745 GWh – with the big drop in Queensland, home of the biggest rush to rooftop solar power, where household consumption fell 10.3 per cent.

Business demand overall, on the other hand, was slightly higher in 2011-12 compared with the previous financial year, although it dropped in NSW.

The “NEM” totals are 128,857 GWh (2011-12) versus 127,908 GWh.

Demand dropped only in NSW (down more than two per cent) and Tasmania (down 2.6 per cent). In Queensland, the rise was 5.5 per cent, reflecting perhaps an improvement after the floods.

Finally, here’s a set of numbers from this preliminary surf through the statistics that’s rather interesting.

A year ago, ESAA was still forecasting that national power generation demand for gas would rise from 343 petajoules in 2010-11 to 446 PJ in 2015-16 and 558 PJ at the decade’s end.

The new yearbook forecasts a reduction in generation demand for gas Australia-wide from 332 PJ in 2011-12 to 260 PJ in 2016-17 and only 271 PJ at the decade’s end.

Faced by forced use of renewable energy (mostly wind power) through the RET, a continuing rise of solar PV use, projections of significantly higher east coast prices and an overall slump in “NEM” demand, the dash for gas has run out of puff.

What will make a lot of politicians frown is that these projections also show a marked decline in manufacturing demand for gas – tumbling from 368 PJ in 2010-11 to a projected 300 PJ in 2016-17 and 271 PJ in 2020-21.

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