Coal generation falls to record lows in Australia.

Graph of the Day: Australian coal generation falls to record low

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Coal generation falls to record lows in Australia, as consumers use less energy and more wind and gas fired generation is used.

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Coal-fired generation in Australia continues to be sidelined by the growing impact of renewables and falling demand, and has now fallen to its lowest levels since the creation of the National Electricity Market more than a decade ago.

As today’s Graph of the Day reveals, provided by energy consultants Pitt & Sherry, both black coal and brown coal generation has fallen sharply in the last seven months in particular, as more renewables are bit and the new phenomenon of falling demand accelerates. Production of gas increases, because it can provide more flexibility in response to the changing market conditions.

In its latest monthly update, taking into account the month of February, Pitt & Sherry says wind generation, though down slightly in February due to seasonal conditions, reached its highest ever level of generation of 7.05 TWh on an annualised basis, equal to 3.8 per cent of NEM generation. Coal fell to its lowest level of 74.8 per cent,  total renewables (wind plus hydro) reached 12.5 per cent and gas supplied the remaining 12.7 per cent. It does not measure rooftop solar, but says it clearly has an impact on demand.

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Pitt & Sherry says the total quantities of electrical energy supplied by the NEM have been falling steadily in every state for over two years, and the switch to renewables and gas has caused an even greater decline in the level of emissions.

On a state by state basis, the fall in black coal generation has been felt most markedly in Queensland in the latest period, with output from its key generators – Kogan Creeek, Stanwell and Tarong – falling sharply. Some generators in NSW experienced increases in output, but that was only after the closure of two 500MW units at Wallerawang.

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One interesting new graph(below) in the Pitt & Sherry report is the fall in peak demand. “It is pretty clear that falling energy demand is contributing to falling peaks: the key summer peaks have fallen for each of the past four years in Victoria, the past three in Queensland, and the past two in NSW and South Australia,” it writes. Obviously, this has important implications for future spending on network upgrades which, as everyone now knows, has been the main driver of electricity price rises over the past four or five years.”

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Pitt & Sherry also notes that these dramatic changes in electricity demand are not unique to Australia. Similar trends are evident in the USA, the UK and New Zealand, and because none of these countries has experienced the large price increases seen in Australia, it is unlikely that price is the main explanation for the changes.
“More fundamental processes, beyond price effects, seem to be at work,” it writes. “Rooftop PV is obviously part of the story, but cannot explain New Zealand or the UK. Are regulatory energy efficiency programs, so often condemned as “green tape”, actually helping consumers to use less electricity and Australia to start reducing its emissions?”
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