Coal hits new low as NEM demand continues to fall | RenewEconomy

Coal hits new low as NEM demand continues to fall

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The latest Cedex report finds the total amount of electricity supplied by Australia’s coal-fired generators at its lowest level in the history of the NEM. But while the report links the introduction of the carbon price to falling emissions and rising renewables output, the reduced demand for coal looks more like the new normal.

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The total amount of electricity supplied by Australia’s coal-fired generators has hit its lowest ever level since 1998 – the year the National Electricity Market began operating – according to the latest Carbon Emissions Index (Cedex) report by pitt&sherry.

The report, released today, finds that coal power plants are now supplying less than 75 per cent of NEM electricity, compared with more than 90 per cent back in 1998, and suggests this could be the new status quo for the industry, with operators of coal-fired power stations changing their modus operandi to match the changing outlook.

According to the report, overall demand for electricity from NEM generators, and associated emissions from the electricity sector, continued to fall in the year to April 2013, with annualised total electricity sent out by NEM generators coming in at 10.3 TWh (or 5.2 per cent) below the mid-2010 peak.

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“Operators of coal fired power stations appear to have accepted that reduced demand will last for some time and are changing the way they operate their power stations,” the report says.

By way of example, it points to Macquarie Generation, operator of the Bayswater and Liddell power stations in the Hunter Valley, NSW. Having operated all four units at both stations over the summer, it says, Macquarie has shut down three of the four units at Liddell over the past two months – the older and less efficient of the two stations.

In SA, meanwhile, the anticipated complete shut down of Northern, the only coal-fired power station in the state, occurred with the first unit in late March and the second in mid April.

The news was not much better for gas, with the annualised output from gas-fired generators falling for the first time in nearly two years, with Queensland and SA – the two states known for largest gas generation – both recording lower generation rates.

Wind and hydro, meanwhile, have continued to grow – “very strongly in the case of hydro,” says the report, with annualised generation increasing for eleven months in a row; a 31 per cent, 3.95TWh rise that kicked off just before the commencement of carbon pricing.

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In the case of falling electricity demand, however, the impact of the carbon price appears to be negligible, with the report noting a 3.1TWh fall since June 2012 – “i.e. since the introduction of a price on emissions, but, as can clearly be seen in Figure 1, there has been no change in the rate of fall of demand, established well before July 2012,” it says.

But the data tells a different story on annualised emissions, with the decrease since last June accelerating to a total fall of more than 10 million tonnes – equivalent to over 6 per cent of NEM emissions for the year to June 2012 (and nearly 2 per cent of Australia’s recent total annual emissions). This indicates “there can be little doubt that the carbon price is strongly affecting the supply side of the electricity market,” says the report.

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  1. Concerned 7 years ago

    Has anyone noticed the economy is slowing due to the incompetence of this Govt. I wonder why demand for power is going down?

    • Warwick 7 years ago

      Don’t forget the closure of Kurri Kurri in NSW (about 4~500MW flat I believe)…

    • Jonathan Prendergast 7 years ago

      Why did the stock market go up 10% last year then?

    • MikeH 7 years ago

      This site is relatively troll free. But we do need to be reminded that there are climate science deniers out there who are politics first, reality second.

      • Concerned 7 years ago

        Nothing to do with politics, only facts. The stock market has nothing to do with output.

        • PaulL 7 years ago

          “the economy is slowing due to the incompetence of this Govt” is an opinion, not a fact. It is also not an opinion shared by the majority of economists here or overseas.

          • Concerned 7 years ago

            It is fact. I do not know where you studied economics, but my university must be different to yours. Suggest you actually look at the facts concerning the Australian economy, and get back to me. No doubt Cpl Kook will be a great comfort to yourself.

          • PaulL 7 years ago

            If you’re an economist, then you’ll surely know (referencing your earlier comment) that a slowing economy means the economy is still growing, but isn’t growing as fast. Which means, if it were business as usual, that demand for power should still be growing…

          • Concerned 7 years ago

            Suggest you go back to your books and start again, and actually go and look for the indicators. If not, Cpl Kook will keep you warm and fuzzy.

  2. Jonathan Prendergast 7 years ago

    Interesting to hear stories of Coal Fired Power Stations closing down. Have any wind farms or Solar PV systems been closed down due to the drop in demand?

  3. Curious 7 years ago

    ‘Concerned’ may be proselytising but has a point, I’m not convinced the drop in output can be attributed to the carbon tax, the drop in expansion of new mining ventures might have something to do with it. Need to read the report more fully!

    • Professor Ray Wills 7 years ago

      Sorry but mining was running hot right up to August 2012, but largely irrelevant to consumption presented here because most mining consumption is remote and off the grid. Australia’s economy (and population) have both been growing for the last decade and yet electricity consumption has been falling since 2008 because of the arrival of energy efficiency and enhanced by the arrival of distributed generation from solar since 2010 – remember we’ve added 2.4 GW of generation on 1 million homes since then. The article doesn’t say the whole drop is because of the carbon tax, just the drop in brown coal.

  4. Julie and Don 7 years ago

    Why ddin’t WA join the NEM. Distance or another reason?

    • Ronald Brak 7 years ago

      Distance, it’s a long way to WA. Building a power line to connect WA to other states is currently too expensive to be worth it.

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