Australian electricity emissions fall slightly as wind energy blows harder | RenewEconomy

Australian electricity emissions fall slightly as wind energy blows harder

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Australia record small drop in electricity sector emissions as renewable generation rises, but is still well above levels when carbon price was in place.

Figure 1
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The year to July 2016 saw the slowdown in demand growth, first identified in May, shift to an actual fall in demand for the National Electricity Market in total.

Total emissions from electricity generation in the NEM again fell slightly in the year August 2015 to July 2016. Annual emissions were 4.6% higher than in the year to June 2014.

Total coal generation was 75.6%, compared with a minimum of 72.3% in the year to July 2014. Gas generation fell again albeit only slightly, for the eighteenth month in succession. Both hydro and wind generation increased and, as a result, total renewable generation reached 13.9%, its highest level since August 2014.

Figure 1
Figure 1


In July, total annual demand for electricity fell in every NEM state except Queensland, where it increased, but at a slowing rate. This meant that total NEM demand fell by 0.16% in the month. By contrast, demand in the WA South West Interconnected System (SWIS) increased quite strongly in the year to June (Figure 1).

The end of July is an opportune time to look at the winter peak for the year, since this always occurs between the beginning of June and the middle of July (typically in the early evening, on a day when it is dark by 5.30 across most of the NEM and the weather is cold and wet across south east Australia).

Note that, with the occasional exception of NSW, winter peaks are lower than summer peaks in all mainland NEM states, in the NEM as a whole, and in WA. Hence winter peaks generally place less stress on the supply system than summer peaks. That is partly offset by the fact that distributed solar generation makes no contribution to meeting winter peaks, since they occur after dark.

Winter and summer peak 30 minute electrical energy demand in each state are shown in Figure 2 (winter only for Tasmania, where summer peaks are lower than winter). The interesting point is that peak demands this winter were the highest for some years in NSW, SA and Tasmania, even though total annual electrical energy demand was lower.

The same goes for the NEM as a whole; the highest 30 minute demand, which occurred on Monday 27 June, was the highest since 2011, even though total annual energy demand is now considerably lower than it was in 2011. In WA, both annual demand and winter peak demand have continued to increase throughout the period covered by CEDEX® Electricity Update, though peak growth has been faster.

Figure 2
Figure 2

Winter peaks occur later in the day than summer peaks, meaning that residential consumption is a larger contributing factor. A feature of residential energy consumption over the past few years has been a shift away from gas space heating, towards use of heat pumps (reverse cycle air conditioners), particularly outside Victoria. This shift may be a driver of the higher winter peaks.

Generation and emissions

Total annual NEM generation fell from June to July, in line with total annual demand (Figure 3). Emissions fell quite sharply, largely driven, as is always the case, by a lower coal share of generation. Black coal generators supplied 53.3% of total supply and brown coal generators supplied 22.3%, making a total coal share of 75.6%. This is down from 75.8% in the year to June 2016 and the four year maximum of 76.2% in the year to April 2016.

As has been the case for a year now, Victorian brown coal generation continued to fall; black coal generation actually increased slightly (Figure 4). Gas generation was almost unchanged with only a very slight fall to 10.5% of total annual NEM generation; continuing falls in Queensland were offset by increases in SA, as gas replaced the supply previously provided by the closed Northern power station.

Looking at the NEM as a whole the key trends seen in the year to July 2016 are precisely those which must be sustained over the long term to achieve major emissions reductions for the electricity sector:

  •   Demand decreased (notwithstanding continuing growth in Queensland
  •   Coal fired generation decreased
  •   Gas fired generation decreased
  •   Hydro generation increased (though it is now approaching its long term sustainable level)
  •   Wind generation increased.Can these trends continue – and with greater vigour?
Figure 3
Figure 3


Figure 4
Figure 4

July was a particularly good month for renewable generation in the NEM. Total renewable generation reached its highest ever monthly figure of 2.99 TWh. As a share of total generation, it reached 17.9%, almost exactly the same level as in August and October 2013, when total demand and generation were significantly lower.

In the year to July 2016, total renewable generation was 25.7 TWh, equal to just under 13.9% of total sent out NEM generation. In total and as a share, this was the highest level since the first half of 2014, when high levels of hydro generation, stimulated by the carbon price, lifted total renewable generation to just under 27.0 TWh and 14.7% of NEM generation.

Looking at wind generation alone, the July total of 1.27 TWh was second to the record 1.32 TWh generated in May. The annual total to July of 10.7 TWh was the highest ever, as was the 6.1% share of total generation. This makes it timely to look briefly at the overall performance of wind generation in the NEM. The table below shows performance, measured by average capacity factor, in both July and in the year ending July. It also shows mean generation in July and the standard deviation of the mean.

NEM region





Total NEM

Share of installed wind capacity






Average capacity factor July 2016






Average capacity factor Aug 2015‐July 2016






Total generation July 2016 (GWh)






Average generation July 2016 (MW)






Standard deviation of mean






Points that stand out include the following:

  •   The two wind farms in Tasmania achieved much higher capacity factors than wind farms, on average, in other regions, both in July and throughout the year. On the strength of the wind resource alone, Tasmania is a sensible place to consider new windfarms.
  •   Windfarms in SA, as a whole, performed less well than windfarms elsewhere. As we have explained previously, this may, in part, reflect the fact that a number of windfarms in SA are older than elsewhere and so do not have efficiency advantages of contemporary technology. Interestingly, however, the gap between performance in July and year round performance was less in SA than in other regions, which suggests that SA windfarms achieve relatively better year round performance.
  •   The very high standard deviation values, calculated over the 1,488 thirty minute trading intervals in July, reflect the variability of wind generation. The differences between regions indicate that, during July, variability was largest in SA and smallest in Tasmania. In an ideal world these relationships would be the other way round. Tasmania’s hydro based system makes it very well placed to accommodate large amounts of variable generation (and also variable demand, again pointing to Tasmania as a sensible option for more wind). SA is at the other extreme, being entirely dependent on expensive gas generation, plus the Heywood interconnector with Victoria. During July, unavailability of the interconnector for some days to allow capacity upgrade work to be completed, together with high gas prices, resulted in very high average wholesale prices over the first three weeks.
  • As would be expected, variability across the NEM as a whole is less than in any individual region. This clearly demonstrates the performance benefit of spatial diversity of wind generation. There is also of course a benefit in reduced transmission losses of having generation closer to load, all else being equal. Another way of looking at the benefits of diversity is to examine the correlation between wind generation in the different regions. During July at both the 30 minute and the daily levels, wind generation in SA was quite highly correlated with generation in Victoria, more weakly correlated with NSW and not correlated at all with Tasmania. Note that all currently operating windfarms in NSW are located in the south east of the state. It will be interesting to see how approved wind farms in northern and western NSW perform, if and when built. Two aspects of performance will be particularly important; capacity factor relative to existing windfarms and correlation of generation period. Reasonable capacity factors coupled with weak correlation of generation period with southern NSW and Victorian windfarms would make further development appealing.

    Hugh Saddler is an energy analyst with Pitt & Sherry and The Australia Institute.

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