Electricity emissions continue to climb in absence of carbon price

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Australia charts an increase in annual emissions from fossil fuel consumption for the year to September 2014, as electricity emissions turn sharply upwards.

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Emissions from consumption of petroleum fuels in Australia are now seen to have reached a peak in the year ended July 2013, and remained almost constant since then (Figure 1). The decline in consumption of natural gas in eastern Australia, i.e. excluding WA and the NT where reliable data are not available, appears to have stopped. In our estimation this will turn out to be only a temporary halt, as higher wholesale gas prices flow through more strongly to large industrial and small retail prices alike over the next year or so.

However, as we have been reporting in the monthly Electricity Updates, emissions from electricity use have turned sharply upwards since June 2014. The overall outcome is an increase in annual emissions from fossil fuel consumption in Australia for the year to September 2014, as reported in CEDEX®, i.e. excluding data on emissions from electricity generation and natural gas consumption in WA and the NT.

Total emissions for the year ended September 2014 were 3.5 million tonnes CO2‐e lower than they were in the year ended September 2013, made up of a decrease in electricity generation emissions of 2.4 million tonnes CO2‐e (down from 6.2 million tonnes CO2‐e for the year June 2013 to June 2014), a decrease of 0.1 million tonnes from petroleum fuel consumption and a decrease of 0.9 million tonnes from direct natural gas consumption.

This is the first time that CEDEX® has recorded a year on year reduction in emissions from petroleum fuels, which is a direct consequence of the new basis of reporting. Under the former basis, i.e. including emissions from international sales of aviation and shipping fuels, a small increase (0.6 million tonnes CO2‐e) would have been reported.

By contrast with these year to end September results for successive years, the recent emissions trend ‐ since the last CEDEX® report with data to June 2014 – is an increase in total emissions of 2.2 million tonnes CO2‐e, with a large increase in electricity generation emissions and a smaller increase in petroleum emissions.

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Petroleum

CEDEX® classifies petroleum products into four groups, characterised, in very approximate terms, by the types of activities for which the fuels are used. The four groups are:

  • Light vehicle fuels, comprising all sales of petrol (mogas) and automotive LPG, plus retail sales of diesel. The name is a little inaccurate, in that some diesel sales to heavy vehicles are made through retail outlets, but it is certain that virtually all of this fuel consumption is for road transport.
  • Bulk sales of diesel, most of which are used for mining, agriculture, railways, shipping and electricity generation at remote locations, and some for road transport (buses, road transport fleets).
  • Aviation fuels used for domestic flights and aircraft operation.
  • Other fuels, consisting mainly of relatively small quantities of LPG and heavy fuel oil, used for domestic shippingand for various non‐transport activities.Figure 2 shows how sales of these four groups of petroleum fuels have changed since June 2009. The main change since June is the sharp up‐tick in emissions from light vehicle fuels, after nearly two years with no growth in emissions. Separating the change into its components reveals that the emissions increase was caused by a sharp increase in the rate of growth of diesel use (Figure 3). Over the past year and a half, there has been a fairly uniform substitution of diesel for LPG in terms of emissions from road vehicles (not of course in terms of the vehicles themselves). It now appears that vehicle LPG consumption may have stopped falling, while diesel consumption has accelerated. State level data (not graphed here) show that most of the increase in emissions from light vehicle fuels has occurred in Victoria, with some also in NSW, but little or none in other states. Should this trend continue, future CEDEX® reports will examine possible underlying causes.

    The trend in emissions from bulk diesel is unchanged from the CEDEX® report for the year to June 2014. Consumption continues to climb rapidly in WA, fall rapidly in Queensland and stay almost constant in all the other states, giving a net result of little change. As mentioned in previous reports, these movements appear to reflect the contrasting fortunes of the iron ore and coal mining industries – continued growth in iron ore volumes (despite lower prices), but reduced volumes of both metallurgical and thermal coal production.

    The last CEDEX® report contained some analysis and discussion of the trend in emissions from aviation fuel, but was unable to reach strong conclusions because we had not at that time separated domestic from international consumption. Figure 4 shows domestic and international fuel sales volumes separately, plotted against indicators of aviation activity. For domestic aviation the indicator used is available seat kilometres, which combines capacity with distance to be travelled. For international aviation the indicators is available seats, without the distance component. The very close relationship between the two indicators of aviation activity and fuel consumption is obvious. It is also obvious that growth in the volume of domestic passenger transport activity appeared to have slowed, if not stopped altogether, and with it the growth in consumption of jet fuel. There can be little doubt that the slow‐down in activity has been a major cause of the widely reported difficulties being experienced by Australia’s domestic air transport carriers. CEDEX® now shows that the slowdown has contributed to the cessation of growth in consumption of petroleum fuels as a whole, and hence of greenhouse gas emissions.

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    Natural gas

    The year to September 2014 showed a continuation of falling consumption of natural gas in eastern Australia (Figure 2). As noted in the last CEDEX® Report, both rising contract wholesale gas prices, particularly affecting industrial consumers, and the combination of increased energy efficiency and fuel shifting towards electricity in the residential sector make it likely that this trend will continue.

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3 Comments
  1. Colin Nicholson 5 years ago

    I think something has gone wrong in the figures dept.

  2. Alan Baird 5 years ago

    Great to see the Fed Govt has turned the corner and got Oz cranking out more coal smoke for electricity. Gives you a warm feeling inside… and given time, outside, too.

  3. OnionMan77 5 years ago

    Note: CEDEX = Carbon Emission inDEX
    Citation for graphs:
    http://www.pittsh.com.au/assets/files/Cedex/CEDEX%20Report%20December%202014.pdf

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