Emissions from Australia’s National Electricity Market (NEM) have fallen to 10 year lows, as demand continues to ease and the amount of coal reduction falls because of the growth of renewable energy, which has reached its highest levels since the 1980s.
In its latest assessment of Australian electricity production and emissions, consulting group Pitt&Sherry said even production from highly polluting brown coal generators has fallen in the past 12 months. Part of this was due to floods at the Yallourn mine in June,
The report notes that a 500MW unit at the Wallerawang C power station near Lithgow in NSW has also been mothballed, for at least 12 months, as a result of the changing dynamics of the NEM. This adds to the near 3,000MW of coal-fired capacity put on hold in the past year.
The latest data (illustrated in the graph below) shows that gas, hydro and wind generators have all increased output, with the Tasmanian hydro system reaching its highest level since joining the NEM in 2005, taking total hydro electricity production to it highest levels since 2000-01.
Wind energy generation fell slightly in January from December, but Pitt&Sherry said the commissioning of the 420MW Macarthur wind farm in Victoria would push wind output to its highest levels in the next month or so.
Gas generation also reached its highest ever annualized levels in January. “These are precisely the changes in the electricity supply mix which the carbon price would be expected to induce,” the report said.
Total renewables (hydro plus wind) reached 12.1 per cent of NEM generation in the year to January 2013. This is the highest share of renewable supply in what is now the NEM since the 1980s, when total demand for electricity was less than 60 per cent of its current level.
“This fact highlights that the growing share of electricity supplied by low emission generators in the NEM, and the corresponding fall in average emissions intensity of total NEM generation to its lowest ever level, is due as much to the fall in demand for electricity from the NEM as to the increased output from low emission generators themselves,” the report said.
“Had demand kept growing at the rates seen up to the end of 2006, the shares of gas, hydro and wind generation would have been significantly lower, for the same total output, and the emissions intensity of NEM generation higher. “
The report notes that the biggest falls in demand have occurred in NSW and Victoria, with demand in SA and Tasmania virtually unchanged for more than four years.
“It is hard to identify all possible reasons for these changes in demand. In NSW, the closure of the Kurri Kurri aluminium smelter is obviously important,” it said.
“However, the impact of increased rooftop photovoltaics, another factor thought to be important, is not obvious, since the two States with the highest PV take-up rates – Queensland and SA – also show the smallest reduction in demand on the NEM.” (One factor to explain that might be that those two states also recorded the highest growth in air conditioning in recent years).