Coal generation hits 3-year high in Australia following carbon price repeal

More than a year after the repeal of the carbon tax and the coal sector continues to recover, with coal generation reaching a new three-year high of 75.6 per cent in October, despite notable increases in rooftop solar PV output.

The latest update from the Pitt & Sherry Cedex team says coal reached a low of 72.4 per cent in July 2014, the end of the carbon price which was then repealed by the Abbot government.

Brown coal was the initial beneficiary, with production rapidly increasing, and now black coal is also lifting its generation output. With the carbon price gone, the main federal initiative for reducing emissions is Direct Action, which places no restrictions on coal generation.

The report says total demand in the NEM has recovered from its lows early in 2015, but the rate of its recovery appears to have slowed recently. The headline result masks a continuing increase demand in Queensland counteracted by a flattening of demand in New South Wales and Victoria.

Emissions from the NEM continue to rise, with an increase in the share of coal (black and brown) in the total generation portfolio and a corresponding drop in the share of both gas and renewables (Figures 3 ‐ 5).

Black coal output is at its highest for two years. While at the same time, brown coal generation has decreased slightly over the last four months, following its post‐carbon‐pricing rally (Figure 3).

Rooftop solar output continues to grow, while wind output remains virtually unchanged recently, but is still on a longer term growth trend (Figure 3). Total generation from hydro plants continues at well below the level of the last few years.