NAVIGATING A NEW ELECTRICITY SUPPLY ERA
n av i gat i n g a n e w e l e c t r i c i t y s u p p ly e r a
Pursuing a softer environmental footprint
Prepare yourself for a step-change in electricity supply and consumption in Australia.
on policy certainty and 12 Focusing a framework for investment Extract from a speech by the federal Minister for Resources and Energy Martin Ferguson.
major national 18 Ainfrastructure challenge
By 2020, coal will no longer be the overwhelmingly dominant source of fuel for electricity generation.
need for a national 36 The energy policy
More than $10 billion worth of electricity is traded every year in a market that operates 24 hours a day.
a national 44 Towards energy policy The governmentâ€™s promise of an energy white paper has whetted the industryâ€™s appetite.
52 Nuclear versus power poor
How and when is Australia going to decarbonise its electricity supply? Is nuclear power the answer?
POWERING AUSTRALIA VOLUME 5
poverty emerges 58 Fuel as a real issue End-user power prices in 2015 are likely to be twice what they were in 2008.
may brighten 58 Conditions for solar power CSIRO believes future advances will enable the sun to meet 30 per cent of our power needs.
stateâ€™s prime 64 Premier supply challenge NSWâ€™s population has more than doubled since the mid-1950s and is heading for 7.6 million by the end of the decade.
72 New energy vision for the West
Western Australia lacks a long-term energy plan. Its last comprehensive energy policy was developed in 1979.
big a boon is gas 80 How for generation? Once again gas appears ready to play a golden role in electricity production.
energy trading 84 Interstate on the rise How a $2 billion surge in investment transformed the future for wind generated energy.
88 The solar flagship program
Preparing to reduce future carbon dioxide emissions from power stations by 10.8 million tonnes.
Roll of honour
Roll of honour major Australian Coal Association GE IBM Siemens Ltd SMEC Australia Suntech Power Australia Pty Ltd Toshiba International Corporation TransGrid Key AGL Energy Limited Ausgrid ENERGEX Limited Gentrack Granite Power Limited Horizon Power Institute for Mineral and Energy Resources Vestas Western Power Wilson Transformer Company Pty Ltd
POWERING AUSTRALIA VOLUME 5
The future is electricity. It is unequalled in being able to transfer large amounts of energy at the speed of light and multiple fuel sources can be used to generate it. It will provide more and more of your energy needs in the future. It is simply the most exciting energy sector to be in.â€? Tony Concannon, Executive Director, International Power Australia
IntRodUCtIon PURsUInG A soFteR enVIRonMentAL FootPRInt
We are now beginning a decade in which policymakers are seeking to launch a step-change in electricity supply and consumption in Australia. the exercise is complicated by the fact that the availability of electricity over past decades has fostered a great dependency in modern society, making power the third fundamental need of communities, along with food and clean water. When the power supply falters today, countless activities in homes, industry, shops, offices and hospitals are put at risk â€“ and its growing cost affects both household and business budgets. Having come to depend on to a great extent in most parts of the country on comparatively cheap fossil-fuelled electricity, we are embarking on a process in which the carbon emissions intensity of the industry is expected to be significantly improved, the generation mix to be substantially different, networks to be greatly upgraded and expanded, smart meters with time-of-use tariffs to be standard for households and the cost of electricity to be much higher than today. In the decade ahead, the federal government (as explained in its energy resource assessment published in the past year) plans to move Australia on to a power path that, by 2030, will have reduced the role of coal-fired generation to supplying 43 per cent of demand, increased the contribution of gas-fired plant to 37 per cent and grown the renewable generatorsâ€™ share of consumption to 20 per cent. Pursuing this path will require a capital outlay of more than $20 million a day on network augmentation, about $6 million a day on building wind farms and other renewable plants, and about the same each day on providing gas-fired power stations. In total, it will require capital expenditure of more than $130 billion over the decade. Looking out to 2030, it is suggested that overall investment in the industry could amount to $220 billion. the role solar power (whether in residential rooftop arrays or in utility-scale developments) and geothermal energy will play in the 2030 electricity supply chain depends on both technological developments and the willingness of governments to provide subsidies considerably larger than those available today. the same may be said about the prospects for carbon capture and storage achieving a commercial breakthrough, which would open new opportunities for coal-fired generation and impose a new cost pressure on gas plants.
In the decade ahead, the federal government plans to move Australia on to a power path that, by 2030, will have reduced the role of coal-fired generation to supplying 43 per cent of demand, increased the contribution of gas-fired plant to 37 per cent and grown the renewable generatorsâ€™ share of consumption to 20 per cent.â€? Keith Orchison, Editor
Whether political and community sentiment about
on Australia’s east coast, while pursuit of a higher goal
any role for nuclear generation in Australia will change
would once again change the debate about nuclear
this decade, especially in the wake of the Fukushima
energy, drive more coal plant closures (many of them
crisis, can only be a matter for speculation.
owned by state governments) and see renewable energy
Whether the world’s governments can find a way to develop a new decarbonisation plan to succeed the Kyoto agreement, which expires next year, is equally speculative. this year’s United nations summit meeting in durban,
advocates intensifying their pressure for subsidies for zero-emission technologies. the degree of success achieved by the federal government in introducing a price on carbon emissions in
south Africa, will need to move far beyond the last two
the 2011–12 financial year will determine how the new
(Copenhagen and Cancun) to even begin the development
electricity path is pursued. the long debate on the issue
of a new treaty, an issue of major importance to Australia
over more than three years has created so much uncertainty
because success in this endeavour could lead to a
for private sector investors that actual generation
substantial change in the current commitment to drive
development is now at a low point after the development
down national greenhouse gas emissions to 5 per cent
of 10,000MW in the previous 10 years.
below 2000 levels by 2020. this target is now estimated to require annual abatement
All states (and both territories) have substantial skin in this game and none more so than the largest electricity
by 2020 of 160 million tonnes – equivalent to closing
supply/demand region, new south Wales, where the
Hazelwood power station 10 times over. just meeting it will
emphatic change of government in March 2011 means that
require the closure of a number of coal-fired power stations
almost every aspect of the local electricity industry is now in
PoWeRInG AUstRALIA VoLUMe 5
play. How the new nsW government acts on electricity
this year and in final form in 2012. this paper – and the
policy in the year ahead will be an important factor, both
resolution of key issues such as placing a price on carbon
on the east coast and for the nation, especially in terms of
and settling the emissions target – is central to success in
ensuring a secure and affordable power system with a softer
Politics has been a factor in electricity supply for at least the six decades of the modern era and they will be a major
environmental footprint at the decade’s end. Far from being the end of the process, what we achieve
one in the decade ahead. At least three federal elections
by 2020 will only represent the start of a great shift to a
and two each in nsW, queensland and Victoria – the areas
containing 80 per cent of national demand and supply capacity – will take place between now and 2020. Power prices, electricity reliability and security, plus the decarbonisation debate, clearly will be major political issues over the decade. the current investor uncertainty, if allowed to continue, will be a cancer eating at the ambitions of policymakers for a new model power sector. A major step in providing the roadmap, not just for the decade ahead but also for the years to 2030, will be production by the federal government of the much-delayed
energy White Paper, now promised for delivery in draft late
aGL is one of Australia’s leading renewable energy companies and is Australia’s largest private owner, operator and developer of renewable generation assets. AGL has major investments in hydro and wind, as well as ongoing developments in key renewable areas, including solar, geothermal, biomass, bagasse and landfill gas. AGL also operates retail, merchant energy and upstream gas businesses and has over three million customer accounts. As a company that was founded in 1837, AGL understands the importance of taking a long-term view. At AGL, sustainability is about recognising that if we want our business to continue to be successful and respected, we need to do the right thing by our shareholders, employees, customers, the broader community and the environment now. AGL’s sustainability performance has been recognised internationally by independent experts. It is the only Australian integrated energy company included on the dow jones sustainability World Index 2010/11 and is a constituent of the Ftse4Good Index.
AGL owns and/or operates more than 3700MW of generation capacity across base, peaking and intermediate plants. More than one quarter of this is renewable generation sourced from hydro, wind, landfill, biomass, bagasse and solar sources. the remainder of our portfolio is predominantly gas-fired generation. AGL also owns and/or operates coal seam gas exploration and production in five petroleum basins across new south Wales, queensland and south Australia. AGL’s ownership of 2P coal seam gas reserves has grown rapidly to 2029Pj. AGL is committed to leading Australia in minimising the effects of climate change, investing in sustainable energy businesses and working on innovative environmentally friendly projects. AGL’s power generation portfolio includes more than 1100MW of renewable energy. A further 670MW of renewable generation is currently under construction. AGL’s Bogong Hydro Power Project was named Most outstanding Clean energy Project at the ecogen 2010 Clean www.agl.com.au | see page 96 for details
PoWeRInG AUstRALIA VoLUMe 5
RedUCInG CoAL-BAsed GReenHoUse eMIssIons
austraLia is a world leader in exporting coal. It’s also set to be a world leader in reducing greenhouse emissions from coal. Carbon capture and storage (CCs) is a necessary part of the global response to climate change. deployed at scale, CCs will reduce carbon emissions from coal- and gas-fired power stations and other industrial processes by up to 90 per cent. With more than $36 billion in exports in 2009–10, coal is Australia’s largest export commodity. the coal industry directly employs some 40,000 Australians and another 100,000 indirectly. Black coal is used to generate more than half of Australia’s electricity and the royalties from coal currently underpin state government budgets in nsW and queensland.
the Australian coal industry has already committed more than $1 billion through the CoAL21 Fund to developing and trialling carbon capture and storage projects across Australia. developing low emissions technologies for coal is important because coal will continue to produce significant amounts of the world’s energy for decades to come. the United states and major developing economies like India and China will continue to burn their own massive coal reserves. that’s also why japan (Australia’s largest export market for coal), the United states, the european Union and China are all investing in the development of CCs technologies. Around the world there are at least 234 CCs projects at various stages of development. twelve of them are in Australia. We are already demonstrating Co2 storage at the Co2CRC otway Project, and soon the Gorgon LnG Project in Western Australia will be the largest Co2 storage project in the world, storing up to 3.5 million tonnes per annum. Responding to climate change ultimately depends on developing and using low emission technologies such as CCs. Australia is leading the world in many aspects of developing and demonstrating this important technology, including through the $1.68 billion CCs Flagships Program and the coal industry’s $1 billion CoAL21 Fund. www.australiancoal.com.au | see page 96 for details
01 FOCUSING ON POLICY CERTAINTY AND A FRAMEWORK FOR INVESTMENT
PoWeRInG AUstRALIA VoLUMe 5
In teRMs oF HoUseHoLds, InCReAsed eneRGy UsAGe HAs Been VeRy MUCH A syMPtoM oF oUR CHAnGInG LIFestyLe.” tHe Hon MARtIn FeRGUson, FedeRAL MInIsteR FoR ResoURCes And eneRGy
enerGy is something that is more and more the subject
had doubled to 4 MWh per annum. It was an era where
of public debate. Public discussion is very much focused on
people were buying more appliances – electric kettles
increases in electricity prices and the pressures they place
replaced kettles that were heated on the stove, hair dryers
on household budgets. What is often missing from this
and hair curlers were common and people were starting
picture, however, is the immense changes we have seen in
to add a second bathroom to their homes.
electricity usage – both at an industry and household level. In terms of households, increased energy usage has
jump forward 38 years to 2008 and hair straighteners had replaced hair rollers, and a living room was not
been very much a symptom of our changing lifestyle.
complete without a six-appliance power board. Multiple
Let me illustrate this in the context of my own lifetime.
televisions and dVd players were to be found throughout
I was born in 1953. two years later, Australia’s
the house, along with computers, printers, playstations,
population was around 9 million and the median house
mobile phone chargers and a myriad of other electrical
cost approximately $8000. At this time average household
gadgets. In the meantime, air conditioner use had grown
energy consumption in new south Wales and queensland
almost exponentially, car use had grown significantly and
was 2 MWh per annum. this was an era when outside
air travel had gone from being the domain of the rich to
toilets and laundries were still very common, but it
being accessible to almost everyone.
preceded the introduction of clothes dryers and television, which came in 1956. By 1970 Australia’s population had grown to around
By this stage, the Australia population had grown to almost 22 million, median house prices were around $450,000 and average household energy consumption
12.5 million and the average house price had increased to
had reached 7.9 MWh per annum. People were using
around $12,000. Average household energy consumption
more electricity than ever before.
We ARe CURRentLy LIVInG tHRoUGH An eXtReMeLy stRonG PICK UP In GLoBAL deMAnd FoR eneRGy. tHe sIMPLe FACt Is tHAt tHe eRA oF CHeAP eneRGy HAs PAssed.â€? tHe Hon MARtIn FeRGUson, FedeRAL MInIsteR FoR ResoURCes And eneRGy
over the period 1998 to 2010, Brisbane saw a 35 per cent
We are currently living through an extremely strong pick
increase in the number of households. At the same time peak
up in global demand for energy. the simple fact is that the
electricity demand increased by 104 per cent, and the
era of cheap energy has passed.
number of households with an air conditioner installed
In the long run, the most effective way to minimise
increased from 23 per cent to 72 per cent, with 34 per cent
price rises will be to make energy markets as efficient as
of homes running two or more air conditioners.
possible. Reform is key to delivering this efficiency. the
Clearly, reducing or moderating the increase in peak
last 20 years have been a period of continuous bipartisan
demand is an important national objective. one way to limit
micro-economic reform in our domestic energy markets.
it is to introduce time-of-use pricing, so that consumers will
We have seen the creation of the national electricity market
face higher costs in times of higher demand.
and over time previously state-owned assets have
yet in an environment where we are at near full employment and our economy, our population and our
been privatised. today, our electricity market leads the world in terms
energy exports are all growing, there is no quick fix to
of efficiency, reliability and in facilitating competition â€“ a fact
artificially hold electricity prices below where they need to
acknowledged by the International energy Agency. yet our
be to maintain reliability. tempting as it may be, suppressing
economy relies more than ever on secure, accessible energy.
prices through regulation or market barriers would create
the future investment challenge is significant. the
even more pain in the longer term by delivering inefficient
Australian energy Market operator last year forecast that
investment outcomes which, in turn, would either mean
between $72 billion and $82 billion will be needed for new
higher bills for consumers or reduced reliability.
electricity generation and transmission by 2030. Add to this
PoWeRInG AUstRALIA VoLUMe 5
left Constructing and maintaining distribution network lines will remain one of the major cost issues in electricity supply this decade.
further investment in distribution networks, gas pipelines and
Major reform requires proper planning and that is why
associated infrastructure and overall investment in the sector
my department is continuing work on an energy White Paper,
to 2030 could exceed $220 billion.
looking at a range of plausible future energy and greenhouse
thatâ€™s why the government is focused on providing
gas-related scenarios. I intend to release a draft energy White
policy certainty and putting in place the frameworks to
Paper by the end of this year before finalisation next year.
enable investment decisions to go ahead sooner rather
While the white paper will help us understand and plan for
than later. We also want to see this investment directed
the future, it is not about predicting or mandating outcomes.
towards an energy mix that will help reduce our greenhouse
In my view, an effective energy policy framework should
gas emissions â€“ but this must occur in a way that stacks
provide accessible, reliable and competitively priced energy
up commercially and is determined by market forces.
for all Australians. At the same time it should maximise
Government policies, such as the renewable energy
opportunities for economic and social growth and
target and a carbon price, fit with this market-based
encourage ongoing investment and development, including
approach. It means new technologies will be market
in sustainable and clean energy.
tested and only the best and most viable will be deployed at scale. the efficiencies the market drives are critical to
the white paper will provide a long-term strategic framework intended to give investors, consumers and planners confidence in our energy future.
managing cost pressures, but the government also has a role in supporting research and development, addressing
An edited extract from a speech by the federal Minister for
market gaps and bringing on innovation.
Resources and Energy Martin Ferguson to CEDA
AUsGRId eLeCtRICIty netWoRK
ausGrid supplies electricity to 1.6 million homes and businesses via a network that spans more than 22,000 square kilometres, and includes 1.4 million small household customers and around 200,000 small business and large industrial customers. the network comprises 50,000 kilometres of above and below ground cables, 500,000 power poles, 30,000 distribution substations and 200 zone and sub-transmission substations. Ausgrid is the only electricity provider in Australia to run both a transmission and distribution electricity network. the network supplies one quarter of the customers in the entire national electricity Market.
In addition to serving a diverse customer base – which includes Australia’s largest and oldest city via transmission cables that cross sydney Harbour, Botany Bay and White Bay – the network crosses dense and rugged bushland to supply the fast growing regions of the Central Coast and Lower Hunter, through to major coalmines and isolated rural areas. When electricity use is at its peak, the Ausgrid network transports more electricity than tasmania and south Australia combined. About half of Ausgrid’s major substations were built in the 1960s and 1970s. this equipment has performed well over the years, but the time has come to replace it. so Ausgrid has commenced one of Australia’s largest infrastructure programs – the $8 billion replacement and renewal of its electricity network. Based on world-leading technology, the network will include the nation’s first commercial-scale smart grid, after being chosen to deliver the Australian Government’s Smart Grid, Smart City program. Ausgrid is also one of the largest employers of apprentices in nsW, each of whom will play a vital role in the realisation of Ausgrid’s essential infrastructure plans. www.ausgrid.com.au | see page 96 for details
PoWeRInG AUstRALIA VoLUMe 5
enerGeX provides the electricity for everything that’s happening in south east queensland. the electricity distributor supplies power to around 1.3 million homes and businesses and is one of queensland’s largest and fastest growing organisations. At the core of the business are distribution assets worth more than $8.8 billion and 3800 skilled and committed staff working to keep the power flowing. In addition to electricity, eneRGeX delivers high levels of network performance and customer service. However, a dynamically growing distribution area and rising energy demands are making the task of supplying electricity more challenging. safety is a key priority of eneRGeX. Field crew and support staff are on standby throughout the year to respond to emergency situations, particularly during severe weather events. the january 2011 flood event challenged eneRGeX’s emergency response capability, devastating areas of eneRGeX’s south east queensland distribution area. some 300,000 homes and businesses lost power as substations were immersed in water and power poles displaced.
“Just three days after flood levels peaked 100,000 homes had power restored.”
Power restoration is integral to recovery and the process was driven by eneRGeX’s commitment to its values and a
Four hundred crews and many support staff worked
methodical approach to planning and assessment. As safety
tirelessly throughout the preparation and restoration
was the number one driver in the flood response, pre-emptive
process, and just three days after flood levels peaked
steps were taken and electrical assets de-energised before
100,000 homes had power restored.
the future remains bright in south east queensland. eneRGeX is planning and building the electricity network via a $5 billion-plus five-year capital expenditure program to ensure the network will meet the increasing demand for electricity and provide safe, efficient and reliable power to all customers.
www.energex.com.au | see page 96 for details
02 A major national infrastructure investment challenge
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Game chanGinG is an overworked expression, but
60 years ago. It is now increasingly accepted that power
it is hard not to use it about electricity supply in the new
bills by mid-decade will be double what they were in 2008.
decade. By 2020 the Australian power industry, on current
Change in the industry seldom occurs rapidly. It takes
indications, will have undergone significant renewal and
place over decades, as was the case with the 1990s
will be approaching the point where coal will no longer
reforms to disaggregate the sector and introduce
be overwhelmingly dominant in fuelling generation.
competition. As consultants Port jackson Partners
en route the industry will spend tens of billions of dollars
point out, two decades after these changes began to
– on building renewable energy generation, on construction
revolutionise the industry, whether they will deliver lasting
of peaking and base-load gas generation, on upgrading
benefits in Australia is yet to be determined.
and augmenting networks, probably on new transmission links and probably on rolling out smart meters. the latest estimates suggest that capital outlays
the underlying issue is not the plant and equipment being introduced at a cost of billions, but the east coast market in which they and their owners have to operate –
could exceed $130 billion in 10 years and $220 billion
the so-called national electricity Market, which does not
over 20 years, many times the size of the national
include Western Australia or the northern territory.
broadband network. As is now well demonstrated in public debate, what
to date what has been created is not a single east coast market, as intended by prime minister Paul Keating and state
happens to electricity supply this decade is important to
premiers like nick Greiner and Wayne Goss. “In many
all Australians. Low-cost electricity has been underpinning
respects,” say Port jackson Partners, “we have five markets
of our lifestyle, economic growth and international
not one and the current and potential benefits from the 1990s
competitiveness since the end of World War II, more than
reforms are therefore much less than they can or should be.”
this said, the expenditure proposed for even the first half of this new decade is considerable. Credit ratings agency Fitch Ratings, in its 2011 review of Australian power and utilities, has estimated that verticallyintegrated energy businesses will spend up to $25 billion on low carbon emission and renewable energy generation in the period to 2016, assuming the introduction of a carbon price. In the absence of the carbon charge, Fitch says that generation outlays could be about $7 billion lower. to this can be added tens of billions of dollars to be spent on networks. Fitch Ratings points out that, on current regulatory determinations, capital outlays on distribution systems will exceed $6 billion in a year for the first time in 2010â€“11 and pass $7 billion next financial year. It sees expenditure on distribution being above $6 billion per year from 2010â€“11 to 2013â€“14 and the capital outlays for transmission exceeding $2 billion annually for all this period. In addition, Fitch says, consideration must now be given to capital expenditure by the gas supply industry to deliver fuel to electricity generators in a decarbonising environment. It expects that the increased demand for gas by power stations will require new investment in gas storage capacity. even so, the ongoing need for coal supplies by existing generation will also drive capital investment, with the major play in the next few years being the new Cobbora mine in new south Wales, critical to the fuel supply and budget management of the three state-owned generators, Macquarie Generation, delta electricity and eraring energy. Under existing nsW government policy, the mine, estimated to cost $1.5 billion, will be commissioned in 2015 and will enter long-term supply contracts at prices intended to be below the current coal market levels. While developments such as Cobbora will continue to excite political and media attention, the major wave of capital expenditure this decade is still likely to be in the network sector. some believe it may exceed $90 billion by 2020, more than double the projected outlay on the national broadband network, although the scale of expenditure is now under attack from critics of the regulatory regime. the increased electricity network capex requirement has three main causes: 1. the continuing need to serve high energy and maximum
Above Australia is burning more than 50 million tonnes of black
demand growth as a result of a rising population and
coal and over 70 million tonnes of brown coal a year. deciding
increases in average household electricity consumption
which power stations to close this decade is critically import..
from energy-intensive consumer products.
POWERING AUSTRALIA VOLUME 5
Fitch Ratings Credit Ratings Agency
The ongoing need for coal supplies by existing generation will also drive capital investment, with the major play in the next few years being the new Cobbora mine in New South Wales.â€?
2. the need to continuously reinforce and upgrade
should a carbon price be introduced, Fitch says,
transmission capacity to transfer energy from new
generators could seek up to $13 billion in new debt this
generation developments to load centres.
decade. this will leave the private sector seeking to raise a
3. the now urgent requirement to replace ageing and obsolete network assets in an environment where many of them are 50 to 60 years old. the issue of aged assets was highlighted in south
similar amount in equity, an onerous task in the current global economic environment. there will be an early credit focus on Victorian merchant generators, which are mostly project-financed and run on
Australia on the last day of january this year when, with
brown coal. they face significant refinancing next year, Fitch
temperatures at extreme summer levels, Adelaide’s eastern
Ratings points out. “Refinancing will be tough should capital
suburbs suffered substantial blackouts.
markets conclude that a carbon price will result in stranded,
etsA Utilities, the provider of power distribution services
or economically-impaired, plant.” Fitch estimates that these
in south Australia, explained the problem thus: “state-wide,
generators collectively have $2.4 billion in project finance
consumption from 820,000 residential and business
bank debt maturing in 2012.
customers peaked at 3399MW at 5pm and stayed there
In this situation, as the agency says, federal government
as people returned home to evening temperatures above
compensation for generators that experience losses from the
introduction of a carbon price will be a key factor.
“eighty of the 40,000 transformers in the Adelaide metropolitan area suffered fuse failure. “the main contributor to the fuse issue is changes in
somewhat lost in the broad view of the industry, but still important to how it functions this decade, is the queensland government’s plan, announced late in 2010, to restructure
localised demand patterns in the past few years as people
its state-owned generation sector, creating two businesses
have installed new air-conditioning, extended their homes
instead of the three that exist today with the aim of improving
and bought new electrical equipment. the changes only
operating synergies and the enterprises’ economics.
become apparent in extreme conditions, requiring load re-balancing on the transformers.” electricity demand in Adelaide, mirroring the situation in
the state government has transferred some of stanwell Corporation’s assets to Cs energy and combined the remainder with the existing tarong energy portfolio, but it
other mainland capital cities, is rising at 2.2 per cent a year,
has ruled out following up the restructuring with any further
with the increase in some suburbs exceeding 5 per cent
privatisation of the industry.
annually. the Australian energy Regulator, although it
As management consultants deloitte have pointed out in
denied 28 per cent of etsA Utilities’ bid for capital spending
a review of the Australian generation sector, one of the major
between 2011 and 2015, has approved a capex outlay of
factors now influencing generation is the unwillingness of
$1.7 billion (58 per cent more than in the five years to 2010)
east coast governments to further invest in power stations,
for the first half of this decade.
owing to the budget pressures on them in other areas such
With network charges contributing about 45 per cent of end-user power bills, the outlays approved for etsA
as health and education. since World War II the industry has been dominated by
and other network service providers nationally represent
the construction of taxpayer-owned power plant such as the
the spearhead of a politically charged electricity price
queensland government-commissioned Kogan Creek power
environment that is already making headlines in the media
station (2007), but governments expect the private sector to
augment supply capacity in the future.
In new south Wales, for example, according to the
In turn, as deloitte says, this makes investor confidence
AGL energy economics unit, media coverage of the industry
in the national and state policy regimes a critical factor in
rose 140 per cent in the last two years of the past decade.
decisions on what power plant is built, using what fuel, where
While business ownership and the cost of power remain dominant in the media’s perception of the industry, the ability of participants to finance their massive outlays is an
and in what time frame. Assuming a carbon price, Fitch Ratings has estimated that wind farm development and construction of combined-
important issue and will, according to Fitch Ratings, rise in
cycle gas turbine (CCGt) plants for use in base-load
prominence early in the new decade.
generation will dominate the generation capital outlays.
PoWeRInG AUstRALIA VoLUMe 5
AssUMInG A CARBon PRICe, FItCH RAtInGs HAs estIMAted tHAt WInd FARM deVeLoPMent And ConstRUCtIon oF CoMBInedCyCLe GAs tURBIne (CCGt) PLAnts FoR Use In BAse-LoAd GeneRAtIon WILL doMInAte CAPItAL oUtLAys.” KeItH oRCHIson, edItoR
It sees the federal government’s renewable
undersea cables, each equivalent to tasmania’s Basslink,
energy target, which requires 20 per cent of national
crossing torres strait, and 800 kilometres of line from near
consumption to be provided by renewable power at
Weipa to the main transmission grid outside townsville.
the decade’s end, as driving $10.5 billion investment in
to date, origin has only said the Purani River scheme
wind farms by 2015 while investors will spend $11.4 billion
cost will run to “many billions of dollars”, but analysts have
on CCGt generation.
claimed that an outlay of about $8 billion is in prospect.
the balance of expenditure on power plant, according
the project’s tentative commissioning date is 2018 and,
to Fitch, will be invested in open-cycle gas turbine (oCGt)
|if it eventuates, will make a substantial contribution to
plants for meeting peak demands and also to provide
the queensland government’s ability to meet its goal
back up for intermittent wind power.
of providing 9000GWh a year of renewable energy
not included in these estimates is the proposed capital expenditure on large-scale solar generation. the federal
by 2020. Another aspect outside the radar of current electricity
government plans to provide $1.5 billion in support to solar
capital outlays is the proposed Copperstring transmission
investors and expects the grants to leverage about another
link between Mt Isa and townsville.
$3 billion in private sector investment. the first announcements of the federal government grants have now been made. Also not included in forecasts of expenditure is origin energy’s bold plan to bring electricity to Australia from offshore for the first time in the nation’s history. the company, in a joint venture with a business owned
substantial augmentation of interconnectors between south Australia, Victoria and nsW may enable the eyre Peninsula, which has a world-class wind resource, to become a “green hub” for east coast generation. these network additions would form important segments in the $8.3 billion “neMlink” transmission development mooted by the Australian energy Market
by the Papua new Guinea government, has announced
operator in its strategic review for this decade, a series of
that it wants to build a 1800MW hydro-electric power
projects that would include doubling the Basslink system
station on the Purani River in PnG and bring the bulk of
between tasmania and Victoria and strengthening the
the power to northern Australia via a series of transmission
nsW high voltage assets.
systems – a 100-kilometre onshore line in PnG, two
overall, game-changing? Most certainly.
Conversations for a smarter planet:
PoWeRInG AUstRALIA VoLUMe 5
Smarter power for a smarter planet. For most of the last century, our electrical grids stood as an engineering marvel of the modern age and a global symbol of progress. The cheap, abundant power they brought changed the way the world worked – filling homes, streets, businesses, towns and cities with light and power. But these grids are products of a time when energy was cheap, environmental impact wasn’t measured and consumers weren’t even part of the equation. Back then, the power system could be centralised, closely managed and supplied by a relatively small number of large power plants. It was designed to distribute power in one direction only – not to respond to the global dynamics of energy supply and demand. In today’s context, the world’s grids are incredibly wasteful. With little or no intelligence to balance loads or monitor power flows, the world loses enough electricity annually to power India, Germany and Canada combined. Around 80 per cent of energy consumed in Australia is generated from centralised, carbon-intensive power stations, accounting for one third of the nation’s net greenhouse gas emissions. Fortunately, our energy can be made smart. It can be managed like the complex global system it is. We can now put sensors into everything from the meter in the home and the turbines in the plants to the network itself. In fact, the intelligent utility system actually looks a lot more like the Internet than like a traditional grid. It can be linked to thousands of power sources – including climate-friendly ones like wind and solar. All of this intelligence generates new data, which advanced analytics can turn into insight, so that better decisions can be made in real time. Decisions by individuals and businesses on how they can consume differently. Decisions by utility companies on how they can better manage loads. Decisions by governments
and societies on how to preserve our environment. The whole system can become more efficient, reliable, adaptive… smart. IBM® scientists and industry experts are working on smart energy solutions like these around the world. We’re working with utility companies both in Australia and globally to accelerate the adoption of smart grids to help make them more efficient and give customers better usage information. We’re working on seven of the world’s 10 largest automated meter management projects and are also trialling intelligent meters locally. We’re even exploring how to turn millions of future electric vehicles into a distributed storage system, so excess power can be harnessed and returned to the system. Our electrical grids can be symbols of progress again – if we build the entire system with intelligence. And we can. See how IBM is contributing to this aim at Smart Utilities Australia & New Zealand 2011. It’s the region’s largest conference and exhibition, focusing on the latest in smart metering, smart grids and smart homes, and we’re proud to be part of it. Come along and see the latest developments in the electricity and water utility industry. Benefit from new insights and lessons learnt globally that can be applied locally, and maximise great networking opportunities with utility industry colleagues from the region and beyond. Whether you’re representing a retailer or distributor, don’t miss this great opportunity to learn how to build a smarter grid, and contribute toward a smarter planet. Visit IBM at Smart Utilities 2011 Conference and Exhibition, Sydney Convention Centre, November 8-10th. For more information go to ibm.com/events/au/utilities
© Copyright IBM Australia Limited 2011 ABN 79 000 024 733 © Copyright IBM Corporation 2011 All Rights Reserved.TRADEMARKS: IBM, the IBM logos, ibm.com, Smarter Planet, Let’s build a smarter planet and the planet icon are trademarks of IBM Corp registered in many jurisdictions worldwide. Other company, product and services marks may be trademarks or services marks of others. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml IBMNCA0608
03 The need for a national energy policy
PoWeRInG AUstRALIA VoLUMe 5
at the outset, let’s be clear: the neM is not, and never
$10 billion in projects is committed to proceed,
will be, what it claims to be: a national electricity market.
including around $2 billion in routine works on the system.
this is because geography dictates that two large pieces
More than $10 billion worth of electricity is traded every
of Australia – the northern territory and Western Australia
year in a market that operates 24 hours a day, seven days a
– cannot be part of the market. Leaving this aside, the
week, with five-minute despatch intervals and 30-minute
neM’s vital statistics are pretty impressive. It supports
power supply of around 220,000GWh a year from 80
In addition, say consultants ACIL tasman, it is one of
generators (with a combined capacity of 42,000MW)
the most volatile commodity markets in the world, posing
to 19 million Australians living on the east coast, using
“significant risk” to physical market participants — which
40,000 kilometres of transmission lines and cables.
are managed through hedge contracts setting electricity
demand in the market is forecast to rise by about 70,000GWh a year this decade, requiring new generation
prices well in advance of demand. Looking forward, its efficient management is important
construction of about 8000MW. this figure, of course,
not only to the nation’s economic health and our community
like so much else, may be affected by a new carbon
lifestyle, but also to the national ambition to decarbonise the
economy in a big way over the next 10, 20 and 30 years.
the neM stretches over 5000 kilometres from far
More than a few of the players in the market now feel
north queensland to tasmania and west to Port Augusta
that the time has come to give the neM a thorough
in south Australia. just keeping its backbone, the
shake-up in order to cope with decarbonisation. Central to
transmission network, in working order now involves capital
their concern is that the fact the “national electricity objective”,
outlays of $2 billion a year — that’s $6 million per day. Up to
which drives the legislation which underpins the market,
focuses on the long-term interests of consumers with respect
state markets held sway and governments over-built capacity.
to price, quality of supply, reliability, safety and security – but
the efficiency of the neM, says the nGF, rests on the central
not environmental issues.
dispatch process “which is highly transparent and efficiently
they argue that Australian energy Market Commission, which oversights the neM, is not able to consider what rule
matches supply and demand at the lowest available prices”. so what is there not to like about the neM? quite
changes are needed to facilitate the federal renewable
a lot, according to constant critics such as the energy
energy target, which requires 20 per cent of supply to be
Users Association of Australia, which has about 100
from zero emission generators by 2020.
members, including many of the nation’s largest
this, and much more, is now under consideration by the AeMC, which has launched a review into strategic priorities
industrial energy users. What the business community feels about the issue is
for energy market development. this will be the key guide for
important because, although most of the media publicity is
federal, state and territory energy ministers, meeting under
about power issues applying to residential users, more than
the umbrella of the Council of Australian Governments, when
70 per cent of electricity supplied in Australia is consumed
they come to make a decision on how far and how fast to
by the business sector – in industry and commerce.
change the neM. It is not going to be an easy job, given the substantial
According to the Australian Industry Group, the nation’s businesses are now spending $13 billion a year on their
investment required in new generation capacity on the east
power service – and most of this outlay takes place on the
coast over the next 10 to 20 years, the lower appetite of
east coast. Given that there are now many, including the
investors for risk, the uncertainty surrounding carbon policy
AIG, predicting that end-user power bills in 2015 will be
and the unprecedented growth of renewable power that is
double what they were three years ago, driven by rising
network charges and the costs of such features as the
Change to the market set-up, however, has never been
renewable energy target, solar feed-in tariffs and the
straightforward. the design of the neM back in the 1990s
proposed carbon price, commerce and industry is facing a
was a long, drawn-out affair. It absorbed a large amount of
multi-billion dollar increase in its spending on energy and is
the time of power supply leaders, the wider business
pressing constantly for improvements to the playing field.
community, lawyers, economists and a small army of federal, state and territory bureaucrats over some eight years. When completed, it had transformed power supply from
High on the list of eUAA hobby-horses is a fundamental feature of the market: the neM is a so-called “energy only” market, relying on a high price cap to ensure
the fiefdom of government-owned public monopolies to a
reliability of supply. In a time of rapidly changing
competitive system for supplying wholesale energy and retail
conditions, with a rising reliance on intermittent renewable
services complemented by a substantial regulatory system
generation to meet carbon abatement ambitions, this
for the monopoly network sector.
feature needs to be changed, says the eUAA executive
the neM was officially launched in 1998, and dr Paul simshauser, AGL energy’s chief economist and professor of
director Roman domanski. the environmental movement’s concerns about the neM
finance at Griffith University’s Business school, says it has
go deeper than this. dr Hugh saddler, in a paper on national
led to substantial gains in productive, allocative and dynamic
energy security published under the aegis of the Centre for
efficiency in the energy sector.
Climate economics and Politics at the Australian national
“By any measure,” he says, “the neM has been extraordinarily successful micro-economic reform.” this is not just hometown sentiment. As simshauser
University’s Crawford school of economics and Government, points out that federal, state and territory ministers, meeting as the Ministerial Council on energy of
points out, the neM is widely and frequently acknowledged
the Council of Australian Governments, decided in 2004 that
in north America and europe as one of the most successful
the objective of the electricity market, set out in the national
micro-economic reforms in the power industry globally.
electricity Law, should be to promote efficient investment
the national Generators Forum adds that the creation of
and operation of power services with respect to price,
the market has ensured that demand is being served by
quality, safety, reliability and security – but deliberately
more efficient use of existing plant than when the separate
chose not to include environmental issues.
POWERING AUSTRALIA VOLUME 5
Right The national energy strategy needs to deal with the delivery of power over networks as well as modes of generation.
the ministers said: “environmental objectives are more appropriately dealt with in other policy instruments.” “the consequence,” says saddler, “is that, contrary
power stations to be available when there are tight supply and demand conditions. “However,” it says, “the inherent volatility associated
to the approach advocated by the International energy
with spot market prices is a potential source of concern for
Agency and adopted in Britain (on which our power market
governments and, in practice, they demand a higher level
is modelled), climate change mitigation is entirely external
of reliability than the market is designed to deliver.”
to Australia’s domestic energy policy and divorced from,
Governments respond to this by putting caps on retail
rather than integrated with, key energy policy objectives,
prices and on the spot market price, leading, according to
including energy security.” the result, he adds, is that the need respond to climate change is not only treated in Australia as external to and separate from energy policy, it is given a lower priority than preserving the economic benefits of the existing market. the energy Users Association sums all this up by arguing that the market needs to change in line with
esAA, to a situation where they are blunting signals that are required to reward generators and to indicate that new investment is needed. this creates what the industry calls the “missing money” problem – revenue generators would have earned if not for government-imposed market constraints. the national Generators Forum cautions “changing this
emerging energy usage patterns and energy policies.
successful market would be a high risk venture which could
“Under a traditional approach,” it says, “peak demand
jeopardise energy security”. Invoking the real or perceived
growth can be met only through ever-increasing investment in generation and network capacity. If an alternative is not adopted, the traditional approach will begin to yield increasingly inefficient investment and pricing outcomes.” the energy Retailers Association says that, while it is comfortable with the market’s ability to manage network security and stability issues, it is concerned about transmission congestion because of the rising levels of renewable generation in the supply mix. “An increase in the level of congestion has negative implications for the efficiency of dispatch,” the Association adds, “as it could result in higher cost generation being dispatched ahead of lower cost sources.” the suppliers’ main lobby group, the energy supply Association of Australia (esAA), acknowledges that whether the energy-only design is capable of providing the necessary price signals to sustain existing generation capacity and to encourage new power station investment is a key question. “Under an energy-only model,” it says, “the only payment generators receive for their plant is the price of the electricity they produce. no payment is made for being available to produce. Generators are reliant on periods of higher electricity spot prices (as a result of high demand, outages and/or transmission constraints) to make a return on capital and to obtain sufficient revenues to fund new investment.” esAA argues that the energy-only approach has worked effectively over the 12-year life of the neM to deliver new investment (although, it concedes, very little private sector base-load investment) and to provide incentives for
PoWeRInG AUstRALIA VoLUMe 5
successes of different market models in other countries, it
stocks have been gradually exhausted. Meeting future
argues, is not sufficient evidence that similar changes here
increases in demand will involve material power system
are bound to be successful. Conditions overseas are usually
augmentation costs and a cocktail of pressures is now
very different to what they are here.
building up in every facet of the supply chain.” the other
After taking a market approach to electricity supply for
critical aspect for the market is an increasing amount of the
more than decade, the issues with which stakeholders
policy activity that affects its function is occurring beyond the
wrestled in the early 1990s, and the solutions they found,
aegis of the neM’s watchdog and operators.
have come under strong scrutiny. Increasingly, critics are
In its submission to the AeMC review, the national
querying how well the neM is coping with a different set of
Generators Forum noted: “A market achieves its best
challenges to those envisaged almost two decades ago.
outcomes if it has sound design and is left to run without
Paul simshauser notes that, during the first decade of electricity supply reform, the neM was oversupplied with
intervention. Both state and federal governments have introduced distortions, which, to date, have been
generation capacity and delivered reliable, low-priced
moderate. “It is important that future policies recognise
energy, enabling the cost of earlier investment to be
the benefits a market can bring and are designed not to
impact on [its] performance.”
“As a result,” he says, ”the neM has been in the main a good news story. However, generation and network capacity
A MARKet ACHIeVes Its Best oUtCoMes IF It HAs soUnd desIGn And Is LeFt to RUn WItHoUt InteRVentIon.” tHe nAtIonAL GeneRAtoRs FoRUM
left Critics wonder how generators like Cs energy’s plant at Kogan will cope with the rapidly shifting set of challenges faced by the neM.
AeroderivAtive gAs turbines Ge is the leading supplier of aeroderivative gas turbine generator packages for utility, petroleum, industrial and marine applications. this gas turbine product line is derived from the Ge aircraft engines that propel the world’s safest, cleanest and most efficient airliners. the letters “LM” stand for ‘Land and Marine’ applications, the common industry term for Ge’s aeroderivatives. Ge’s continued investment in research and development of aircraft engine technology enables our LMs to maintain their leadership in performance, operational flexibility and lifecycle value to the customer. LMs are efficient and ‘manoeuvrable’ machines delivered in compact modules for rapid deployment to new power stations. they inherit the reliability, availability and maintainability of the Ge aircraft engine, and we support them with our highly experienced field service team based in Australia. More operAtionAl flexibility And dependAbility Ge’s LM product line spans from 18 to 100MW in output, and operates with a variety of fuels and emission control technologies. Ge LMs have gained a strong uptake in the industry, with total operating experience in excess of 92 million hours and over 3300 operational units. these turbines have been selected for a range of mission-critical applications in Australia and new Zealand, including:
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peaking, mid-merit, and base-load operations. Combined
In Australia and new Zealand, there are 120 LMs
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PoWeRInG AUstRALIA VoLUMe 5
the unique features that underpin the LMs100’s selection by customers in Australia and new Zealand include:
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operational availability of 97%, thanks to the packaged plant with modular engine maintenance, like that for airline engines
A ge ecoMAginAtionsM product the LMs100 is an ecomagination-certified product by Ge, which means that its innovative attributes deliver both environmental and operating benefits to customers.
environmental benefit – over the course of a 2300-hour peaking season, an LMs100™ turbine system running at full capacity avoids the emission of 31,000 tonnes of Co2 when compared with a simple cycle frame gas turbine.
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Gentrack is a specialist developer of smart billing, CRM, collections and meter data management solutions for energy and water utility companies. established over 20 years ago, Gentrack lives by its core values of agility, ability and attitude – all of which ensure it continues to win business against larger eRP-based competitors, thanks to its flagship products Gentrack Velocity and mdAtA21. Gentrack Velocity is a smart billing and CRM product designed for electricity, water and gas utilities. It is one of the few utility software products that offers multi-utility billing and is considered a leader in its ability to integrate mass market, time-of-use and network billing processes to create one complete solution. designed to lower a utility’s cost to serve, Gentrack Velocity is proven to streamline processes, enable utilities to transform the customer experience and maximise benefits of smart grid and smart metering technologies. Gentrack Velocity is used by over 40 utilities in 10 countries. mdAtA21 is Gentrack’s specialist meter data management software for energy and water utilities, providing the tools they require to handle large volumes of interval meter data from smart grid technologies. Built using the proven dnA of Gentrack Velocity, mdAtA21 is designed to streamline and automate complex data management activities, enabling utilities to make stronger investment decisions and to provide more information to customers to drive sustainable energy practices. As well as developing its own software, Gentrack is
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PoWeRInG AUstRALIA VoLUMe 5
Granite poWer’s vision and business is focused on low-to-medium temperature, low cost, zero carbon energy recovery and associated activities including:
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established operations, whose reliability remains
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unaffected. operating costs are very low.
power generation technology. GRAneX provides a compelling case for the ®
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and on-site power generation – a case that is not associated with alternative, traditional technologies. this means the opening up a new market for power generation, the reduction in exposure to mains-supply ‘brown-outs’ for companies and their plants and the reduction of the requirements for expansion of the existing mains power grid. GRAneX® delivers improved economics for geothermal power generation, with forecast costs being lower than those for new black-coal fired plant and about the same as for combined cycle gas turbines (before carbon pricing). It also provides a significant risk mitigant for geothermal developments by enabling (for example) drilling to shallower depths or reduced flow rates for the same net output.
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04 TOWARDS A NATIONAL ENERGY POLICY
PoWeRInG AUstRALIA VoLUMe 5
it is now nearly three years since the Minister for
statement. the difficulty was that as the interest in the
Resources and energy, Martin Ferguson, announced that
White Paper grew, so its delivery date was repeatedly
the government would publish a White Paper on energy
pushed out. Having missed its end-2009 deadline, in
by the end of 2009.
mid-2010 the White Paper was shelved indefinitely.
Particularly motivated by the challenges of
ostensibly, the reason was the demise of the Carbon
responding to climate change in the energy sector, the
Pollution Reduction scheme (CPRs), but the indecent
government stated it would “develop an energy policy
haste with which the White Paper was shelved engendered
to ensure Australia’s long-term energy security to meet
a strong suspicion that it was proving extremely difficult to
the needs of the economy overall and underpin the
write. After all, while the CPRs may have been postponed,
prosperity and wellbeing of all Australians. . . . the
the government’s commitment to a substantial reduction in
energy White Paper will identify an appropriate mix of
emissions by 2020 remained in place. the rationale for a
energy policies to deal with the uncertainties, risks and
White Paper had not suddenly gone away; in fact, with the
opportunities to secure cleaner, adequate, reliable and
target still there but no policy in place to deliver it, the need
affordable supplies of energy to support our overall
was greater than ever.
economic and social advancement.” the level of ambition for the White Paper, as reflected
Following the Prime Minister’s announcement of a carbon price in March 2011, however, the White Paper is
in these objectives, was substantial and commendable.
back on the agenda. yet not only are the difficulties still
Indeed, if Australia’s energy companies did not know that
there, but in many ways they are greater than they were
they needed a White Paper before the announcement, their
last year. the fact that the Minister is now stating that we
appetite for one was undoubtedly whetted by the Minister’s
can expect the White Paper in the middle of 2012, or
around four years from the original announcement,
the second issue is that there are a large number
suggests that little substantive progress had been made
of distortions in Australian energy markets that have a
up to the time when the White Paper was shelved and that
major influence on investment. Many of these distortions
rather than dusting off the old drafts, the department is
have been introduced by governments and include:
now starting again with a clean sheet of paper.
• ongoing state government price control of retail
In evaluating the expectations the electricity sector is likely to have of the White Paper, the first question to ask
electricity tariffs • the mandatory renewable energy target of 20 per cent
is why do we need an energy White Paper at all? In a
by 2020, a classic ‘picking the winners’ benchmark
market economy such as Australia, would it not be
seemingly plucked out of the air with little
reasonable to expect that the private sector would respond
understanding by government of the impact on power
to market signals and invest in new electricity capacity as appropriate? Why do we need government to tell us where it thinks we should invest? there are two major responses to this, focused first on energy security and secondly on the large number of substantial imperfections, many of them driven by
prices and on grid management • massive subsidies to households to invest in inefficient generation technologies, such as solar PV, with the effect of reversing the historical trend of centralised, large scale, efficient production of electricity • the national target, supported by both government
government, that currently act to distort the Australian
and opposition, of reducing Australia’s emissions by
electricity market. these two factors mean that we cannot
five per cent from 2000 levels by 2020, with no mud
be confident that the private sector will provide the
map provided about which sectors of the economy
necessary investment when and where it is required to
are going to have to do the heavy lifting and, more
guarantee energy security, nor that the investment that is undertaken will necessarily be efficient. on the first point, energy security is a major concern
generally, how we are going to get there • a mish-mash of different climate change policies in individual states, such as Victoria’s commitment
for consumers, and perhaps even greater worry for
(reiterated by the new Baillieu government) to cut
members of the industrial and commercial sector than for
emissions by 20 per cent from 2000 levels by 2020,
households. yet there is no certainty that increased demand
with virtually no detail provided as to how this will
for electricity will be matched by additional supply. If the market does not value the additional supply at
be achieved • varying government subsidies to different technologies,
a level consistent with the costs and risks to investors,
such as a preference for clean coal with carbon capture
then the required investment in new capacity may not
and storage and solar technologies
eventuate. Further, even if the private sector does invest
• a blanket ban on nuclear power, a technology which,
in the necessary additional supply, it may not choose the
even after the accident at Fukushima daiichi, features
most efficient option from the community’s perspective.
in a significant way in the emissions reduction plans
For example, under current market circumstances with a high level of uncertainty about future carbon prices,
of many other countries • the recent announcement of a carbon price from
there are strong economic incentives to invest in open
mid-2012, but with no detail as yet around the level
cycle gas turbines (oCGt), which supply power at a
of the price, compensation, coverage and what
relatively high cost and with a carbon footprint little short
current programs will be terminated.
of that of coal generation. Government has a major interest in ensuring a secure
the degree of intervention in the market by Commonwealth and state governments, as demonstrated
supply of energy. not only is energy security widely
by the above examples, implies that government must
regarded as being a major element in government’s “duty
inevitably play a major role going forward. In one sense,
of care”, but also, even in circumstances where consumers
Colin Powell’s dictum on government responsibility for
may have been let down by the private sector, it is
invading Iraq could equally be applied to the Australian
inevitably government that is blamed for blackouts and
electricity market: “It’s china shop rules: you break it,
you own it.”
POWERING AUSTRALIA VOLUME 5
Above The biggest brown coal mining operation in Victoria’s Latrobe Valley services the twin Loy Yang power stations.
below Pelican Point power station uses a combined-cycle gas
In a situation where substantial investment in new
turbine operation to produce 487MW of electricity – approximately
base-load capacity will be required in the next few years to
25 per cent of south Australia’s needs.
meet demand, and where the application of a carbon price will require the gradual decarbonising of Australia’s electricity supply, the above market distortions do nothing to provide certainty to investors. Indeed, given that it is widely agreed that the next generation of base-load plant needs to be combined cycle gas turbines (CCGt), it is ironic that CCGt is one of the few technologies that is not explicitly encouraged by any of the government measures included in the list above. Instead the emphasis is generally on the least competitive options, such as renewables and carbon capture and storage (CCs). of course, the introduction of a carbon price should encourage investment in CCGt, but investors will need to have some feeling for the likely level of the carbon price, not just initially but over 10 years and more. there is a clear need to understand the effect of both the carbon price and the projected gas price for the full period in which any investment in CCGt would need to be recovered. At present there is no guidance to investors over these issues. this is clearly a gap that the energy White Paper will need to fill. More broadly, in the absence of clear market signals to investors, the White Paper needs to propose a strategy for the generation of electricity going forward. the strategy would need to address some major issues, including the following: Will the government abolish direct action measures, such as the renewable energy target and subsidies for solar PV, as soon as a carbon price becomes established? does the government intend to formulate a direct action plan, within the carbon tax/ets policy, to ensure a smooth transition from high emitting generators to low emissions plant? What share of the electricity market does the government see for renewables going forward? What role does the government see for gas in base-load generation in the future? What is the government’s strategy for bringing on other low to zero emissions base-load technologies in the longer term when a high carbon price will make CCGt uncompetitive? What are the prospects for lifting the ban on nuclear power in Australia and what would be the role of government in facilitating the development of a nuclear industry? does the government intend to subsidise the demonstration of CCs technologies at a commercial scale? does the government have a strategy for accelerating the development of geothermal power?
PoWeRInG AUstRALIA VoLUMe 5
Above A 500kV transGrid transformer being delivered to Macquarie Generation’s Bayswater Power station in the Hunter Valley.
In responding to all these questions, ultimately the white
the government will also need to detail the role it
paper will need to provide details of the government’s
will play in funding essential R&d and in some cases
overall strategy for decarbonising Australia’s electricity
providing support for infrastructure investment. For
supplies while ensuring a secure supply of power at a
example, does the government intend to provide
globally competitive cost. It will need to provide its view of
substantial financial support to demonstrate one or
how the costs and availability of the various low emissions
more commercially scaled CCs generators? this does not
generation technologies are likely to change over the next
come cheap: the UK government has committed £1 billion
two decades and the level of carbon price the industry can
to subsidising the construction and ongoing operations
expect. In this context, the white paper will also need to
of just one commercially scaled CCs plant in Britain,
provide some guidance on gas prices in the future.
with three more scheduled to follow.
Without some degree of confidence in how all these
Finally, these issues, while difficult, need to be
variables are likely to develop over time, potential investors
exposed to the industry and community generally
in very costly and long-lived assets, which exhibit a lengthy
as soon as possible. It is nearly three years since the
pay-back period, could well best serve their shareholders’
government began working on the white paper. It should
interests by merely sitting on their hands.
aim at delivering it by end-2011.
sIeMens – PICtURe tHe FUtURe oF eneRGy to 2020
today’s enerGy market is undergoing a profound
the most advanced generation of siemens
transformation as Australia moves towards a sustainable
combined cycle power plants operates at an
energy future. How this will take shape is a matter for debate.
efficiency of more than 60 per cent – much greater
However, as the only company in the world that provides
than conventional power plants. thanks to lower
complete and integrated solutions across the entire energy
fuel consumption, each new power plant of this
conversion chain, siemens will continue to be a major driving
generation could reduce the quantity of Co2
force behind the efficient and sustainable supply of energy
emissions per year by an amount equivalent to
in Australia and new Zealand.
that produced by 10,000 cars driven 20,000
Last year saw the release of the Siemens Picture the Future - Energy technology blueprint. Validated by 22 partners, including CsIRo, ABARe, Clean energy Council and Loy yang Power, the siemens Picture the Future research project demonstrates the potential of current technology to shape a sustainable energy future for Australia. It outlines the progressive technology uptake required between now and 2020 for Australia to meet the government’s 2050 targets. It demonstrates how currently proven technology can be the driver for our sustainable future, meeting the demands of climate change, demographic change, urbanisation and globalisation through, for example, increased efficiency and optimisation. increAsed efficiency Increasing energy efficiency can unleash tremendous savings potential, while also conserving fossil resources and reducing Co2 emissions. technological improvements in every stage of the energy conversion chain can substantially reduce the consumption of fossil fuels and increase the output from renewable energy sources.
“The most advanced generation of Siemens combined cycle power plants operates at an efficiency of more than 60 per cent – much greater than conventional power plants.”
PoWeRInG AUstRALIA VoLUMe 5
Growth in renewables will be achieved by a mix of
optiMising the entire energy systeM to be prepared for the future, the world’s power grids must
wind and large-scale solar generation, with contributions
be expanded and improved. “smart grids” will make it
from technologies such as geothermal and ocean power.
possible to use electrical energy more efficiently in the future.
As an example, a 330km x 330km solar power plant in the
Intelligent energy management systems can combine the
Australian desert could produce enough energy to meet
output of smaller, decentralised generating units into “virtual
the world’s demand during daylight hours. the Picture the Future: energy project forms part of
power plants” and route temporary surplus capacities to intermediate storage centres. distributed in large numbers around the grid, such
siemens’ active R&d function, which focuses on bringing innovative solutions to the market that can also provide
storage centres act as stabilisers in peak demand times. An
great returns for the customer. Last year, siemens invested
intelligent power grid with an extended automation structure,
$6 billion in R&d, which contributed to a full spectrum of
advanced sensors and a decentralised information and
cost-effective and innovative technologies for energy
communications structure will allow all participants to use the
efficiency, low emission power generation and renewable
energy, advanced transmission and distribution as well as efficient transportation. Major successes for siemens in the past year reflect this
renewAble solutions By 2020, over 50 per cent of worldwide investments in the
innovative approach, including:
powerplant market will go into developing renewable
growing our wind business in Australia and new Zealand
resources. Within Australia, developing the electricity
with the completion of the te Uku Wind Farm (nZ), one
transmission networks of the eastern states and the separate
of the world’s most efficient wind farms.
Western Australian network will be a key enabler for
integrating power from remotely-located wind, solar and geothermal plants into the electricity sector.
a project win at BMA for a coal loading conveyor substation package, which is a medium voltage solution.
a world-first with the installation of leading reactive power compensation technology at Kikiwa substation, enhancing power quality for residents of new Zealand’s south Island.
an order for the supply of up to 10 compressor trains to the Australia Pacific Liquefied natural Gas (APLnG) project in queensland.
www.siemens.com.au/energy | see page 98 for details
05 NUCLEAR versus POWER POOR
PoWeRInG AUstRALIA VoLUMe 5
the current imbroglio over carbon taxes and
produces is manageable. nevertheless, there is a caveat to
electricity prices is casting rather a large smokescreen
be noted in this context. In the recent past, the objective of
over what remains a challenging long-term problem,
replacing coal with gas for new base-load investment was
namely how and when Australia is going to decarbonise
not seen as being likely to involve a Co2 price of more than
its electricity supply.
about $20/tonne. If the price of gas increases as now seems
some particularly difficult issues apply to base-load power,
likely, however, the Co2 price may need to be significantly
which constitutes about 80 per cent of Australia’s electricity
higher – a recent report by deloitte suggests $40/tonne. It is
supply, because all of the very low emissions technologies
notable that in the previous treasury modelling in 2008, a
available to replace coal are, in different ways, problematic.
$40 Co2 price was not seen in Australia until the late 2020s
Recent developments, including the nuclear accident at
when Australia’s emissions were projected to be over 20 per
Fukushima daiichi, potentially significant increases in domestic
cent lower than in 2000. Although investment in CCGt
gas prices in Australia and cost blowouts in geothermal and
involves relatively low capital costs, the price of fuel
carbon capture and storage (CCs) technologies, make the
constitutes a high proportion – around 30 per cent currently
conundrum no easier to resolve.
– of the cost of electricity. even a moderate rise in the gas
In the short to medium term, the technology choice for lower emissions base-load duty is a relatively simple one. natural gas generation, in the form of combined cycle gas
price, therefore, can have a significant effect on the costs of CCGt generation. While our chief concern about CCGt revolves around
turbines (CCGt), has a carbon footprint around one half that
the gas price, however, the problems afflicting the longer
of black coal and, at least while we enjoy moderate gas
term base-load options are much more challenging. If we
prices on the east coast, the cost of the electricity it
are serious about tackling climate change, and to some
extent the jury is still out on this fundamental point, CCGt
Geothermal was always highly promising and remains so,
can be seen at best as an interim technology. With total
but its progress in Australia has proceeded at a glacial pace.
emissions of around 400kg of Co2/MWh, it is unlikely to be
not only are drilling costs, at around $15 million per well,
competitive in the longer term as carbon reduction targets
deterring investors, the hot dry rocks technology still has to
become tighter and the Co2 price continues to rise. When
be proven at scale and its costs are now likely to be
this occurs, existing coal plant will need to be replaced and
considerably higher than the optimistic early estimates
CCGt will not be well positioned to take over.
suggested. to produce significant amounts of base-load
What then are the serious options for base-load power in Australia in a very low to zero carbon-constrained world? there are some people, few of whom are engineers and even
power from geothermal sources in Australia would also require massive new investment in poles and wires. In the absence of decisive government intervention, few
fewer of whom know anything about the electricity industry,
serious observers now see geothermal providing more than a
who believe that Australia can decarbonise its power supply
small fraction of Australiaâ€™s electricity before 2030. In
solely by investing in renewables. While ultimately solar
mid-2011, business confidence in geothermal technologies
energy may become viable, provided the problems of
has fallen away as is reflected in the share prices of all the
storage and the substantial physical footprint of solar thermal
players. In the three years since june 2008, for example,
plants can be resolved, at this stage it remains intermittent
Geodynamicsâ€™ share price has fallen from about $1.80 to less
and very expensive.
than 20 cents today.
PoWeRInG AUstRALIA VoLUMe 5
GeotHeRMAL WAs ALWAys HIGHLy PRoMIsInG And ReMAIns so, BUt Its PRoGRess In AUstRALIA HAs PRoCeeded At A GLACIAL PACe.” jon stAnFoRd
left An artist’s impression of the proposed eRM Power Wellington open-cycle gas power station in nsW, designed to generate up to 600MW and to meet peak power demands.
In recent years and for quite understandable reasons,
early this year, it seemed safe to say that the other major
Australian governments have favoured the development of
option for base-load duty, nuclear power, came with fewer
clean coal technologies with CCs. If anything, however, the
disadvantages than the other technologies discussed above.
costs of the technology appear to be increasing, while CCs
With over 440 plants worldwide, some of which have been
comes with some safety issues that have yet to be tested
operating without incident for up to half a century, it is a mature
with the general public. A recent report by the Global CCs
technology and its costs, in Asia at least, are much lower than
Institute states that “recent studies suggest that costs [of
those of other low to zero emissions base-load technologies.
CCs] are 20–30 per cent higher than indicated in similar studies undertaken only two to three years ago. . . . Recent estimates suggest that for a ‘reference plant’ in
there are currently over 60 new nuclear plants under construction around the world, the majority of them in China. With other countries taking up the nuclear option and
the United states, the average cost of electricity that would
Australian industry needing to retain its competitiveness in
need to be recovered over all output for the entire economic
relation to energy costs, as well as increasing consumer
life of a generating plant in order to justify the original
resistance to rising electricity prices, there was increasing
investment could be in the range of $Us120–150/MWh.
pressure on the Gillard government to reconsider its
the associated avoided cost of Co2 ranges from
opposition to nuclear power. Indeed, it had been agreed that
$Us60–85/tonne of Co 2 for coal-based power stations
the issue would be considered at the ALP national
and exceeds $Us100/tonne for a gas-fired power plant.”
conference in december 2011.
The Australian Nuclear Science & Technology Organisationâ€™s state-of-the-art 20MW research reactor is our only nuclear installation.
PoWeRInG AUstRALIA VoLUMe 5
yet this was all before Fukushima. In 1986, the Chernobyl meltdown cast such a pall over the global nuclear industry
and for many countries nuclear power is now an essential element in their plans to tackle it.
that new construction of nuclear plants was put on hold for
Few experts around the world believe that the
20 years. Will this happen again following Fukushima? the
decarbonisation of electricity is feasible without a
logic says no, for several reasons.
major contribution from nuclear power. Latest projections
First of all, while it is too early to speculate in any detail, it
from the International Agency (june 2011) still show an
seems the death toll from Fukushima will be much less than
increasing contribution from nuclear power over both
that from Chernobyl, which in itself is heavily disputed, and
the medium and long terms.
also less than other energy-related deaths, such as in coal
Where does this leave Australia? Clearly, in a worse
mines in China. nevertheless, it should be acknowledged
position than it was before Fukushima. While there was a
that while the nuclear industry always represented Chernobyl
slim chance that the ALP would change its policy on nuclear
as a one-off, the Fukushima incident was also rated as a
power at this year’s conference, that possibility is now that
seven, equal to Chernobyl and the highest on the scale. In
much slimmer. Rational analysis has played little part in the
mid-2011, new disclosures from the authorities in japan
nuclear debate in Australia to date and the fact that
revealed that the amount of atmospheric contamination
Fukushima has provided much more ammunition to the
was twice as high as previously suggested. yet while
doomsayers suggests that fear-mongering will continue
unacceptably high, the level of pollution was only about
to dominate the issue for the foreseeable future.
10 per cent of the Chernobyl level. secondly, some observers suggest that the fact that
Without strong leadership, it seems very unlikely that Australian politicians will now bite the bullet on nuclear
the Fukushima reactor, which was over 40 years old, survived
power, at least for several years down the track. this is
the massive earthquake and was only brought down by
unlikely to be to the Australian community’s advantage.
obsolete back-up power sources being swamped by a
on the one hand, we will be forced into much more
tsunami, should increase rather than decrease confidence
expensive and less satisfactory technologies if we are
in nuclear technology. Paradoxically, it was this view that
to address climate change in any substantial way.
brought about a road to damascus moment for the
on the other, the majority of those countries overseas
environmentalist George Monbiot, transforming him overnight
that have committed to nuclear energy will continue to
from being a passionate opponent of nuclear power to being
invest in it. Australia’s energy-intensive industries will
one of its most prominent spruikers.
become significantly less competitive as a result.
Finally, and most importantly, the level of concern about climate change is far greater than it was in 1986
WItHoUt stRonG LeAdeRsHIP, It seeMs VeRy UnLIKeLy tHAt AUstRALIAn PoLItICIAns WILL noW BIte tHe BULLet on nUCLeAR PoWeR, At LeAst FoR seVeRAL yeARs doWn tHe tRACK. tHIs Is UnLIKeLy to Be to tHe AUstRALIAn CoMMUnIty’s AdVAntAGe.” jon stAnFoRd
horizon poWer is the pre-eminent supplier of energy solutions to regional and remote Western Australia. What sets us apart is our passion and ability to deliver safe, reliable and affordable services in the most challenging of environments. our service area is vast, approximately 2.3 million square kilometres. Horizon Power services the biggest area with the least amount of customers in the world â€“ for every 53.5 square kilometres of terrain, we have one customer. our customers range from people living in remote, isolated communities with less than 100 people, to residents and small businesses in busy regional towns, to major mining companies in the resource-rich Pilbara region.
We maintain two interconnected networks as well as in
Horizon Power is a Government trading enterprise which
excess of 30, and growing, isolated or islanded systems
operates on a commercial basis. We focus on delivering the
that power towns and communities throughout regional
best possible set of economic, environmental and social
and remote Western Australia. the systems are exposed
outcomes to the communities we serve while applying a
to intense heat and cyclonic conditions in the north, and
commercial discipline and focus to the way we do it.
ravaging storms in the south. It is these challenges that drive the innovation and commitment of our agile, professional and engaged team of more than 400 employees. Although Horizon Power is a relatively new business, we have the benefit of a long history as part of the state-owned energy company in its various forms.
www.horizonpower.com.au | see page 97 for details
PoWeRInG AUstRALIA VoLUMe 5
CeLeBRAtInG 40 yeARs oF ReneWABLe eneRGy
smec has a long history in renewable energy, dating back to its early beginnings in building the snowy Mountains Hydroelectric scheme. since that time sMeC has expanded its expertise in energy infrastructure to include geothermal, solar thermal, solar PV, biomass, biofuels, waste to energy, wind and micro and mini hydro, including hybrid systems with gas and diesel. over the last 40 years, sMeC has undertaken international and Australian projects varying in scale from multi megawatt power stations and transmission lines that cross nations, to electrification of mini grids for small villages or stand-alone power systems for communication systems. since 1970, when the company was formed and later privatised, sMeC has developed as an international, multidisciplinary engineering company with over 4000 staff and an established network of more than 40 offices around the world. smec has delivered projects in over 85 countries with 89 projects being undertaken in the Middle east alone. the functional sectors of sMeC emerged from skills developed in the early Hydroelectric scheme, which covered all elements required to be able to build a large remote energy system. these disciplines include energy infrastructure, dams and civil infrastructure, tunnels and roads and water and environmental services. Calling on all functional groups of the company, sMeC is well positioned to design and develop complete power supply systems, from greenfield power station sites to delivery of power to an energy-efficient end user. Whatever the renewable energy conversion system, sMeC can deliver the whole power system package, including the balance of plant, backup or hybrid generation and transmission and distribution systems. sMeC has designed and managed the building of power stations, including the 11.5MW palm waste biomass plant â€˜Kina Biopowerâ€™ in Malaysia, the 2400MW son La Hydro Power Plant in Vietnam, the 55MW of geothermal plant for Lihir Gold in Papua new Guinea and the 2MW Lake Cargelligo solar thermal plant in Australia. sMeC is actively expanding its activities and diversifying into other areas of renewable energy. sMeC looks forward to continued growth in this new era of clean energy in Australia and around the world.
www.smec.com | see page 98 for details
06 Fuel poverty emerges as a key issue
PoWeRInG AUstRALIA VoLUMe 5
you WouLd need quite a long sheet of paper to
energy trading division of stanwell Corporation, have
list all the energy issues that are hotly disputed among
thrown a spotlight on this issue in a paper they have
governments, suppliers and community activists today,
called “the Boomerang Paradox”.
but there is one on which they are ad idem: Australians
“A characteristic of advanced economies,” they
will not accept a situation where low-income households
explain,” is continual growth in household incomes
are priced out of obtaining the electricity they require.
and plunging costs of electrical appliances.
For some users, this is literally a life or death proposition
In Australia, increases in household floor space
and the community will cut suppliers and governments
combined with power prices that are among the lowest
no slack whatever to ensure that power is there when
in the world have resulted in rapid growth in peak
they need it.
electricity demand. the power grid in turn requires
In a market environment in which it is now widely agreed that end-user prices in 2015 are likely to be double what they were in 2008 – under the pressure of
substantial incremental generating and network capacity, which is used momentarily at best.” Australia’s long history of very low power prices,
higher network charges and a range of decarbonisation
they point out, combined with almost two decades of
policies – this issue is to set to rise up the attention agenda
economic growth, has led to extraordinary increases in
for both lawmakers and energy retailers.
energy demand driven by the rising use of appliances
dr Paul simshauser, Chief economist of AGL energy and Professor of Finance at Griffith University, queensland,
to cool and heat homes. Back in 1970 average household energy requirements
his colleague tim nelson, Head of economic Policy and
in new south Wales and queensland stood at 4MWh a
sustainability at AGL, and dr thao doan, a strategist in the
year – by 2008, this had doubled to 7.9MWh.
Above downtown Brisbane is part of the fastest-growing electricity market. south-eastern queensland is only 3 per cent of the state by area, but it accounts for most of the electricity demand.
the rise of peak demand out-runs the trend line for
“of course,” they say, “the overwhelming majority of
overall demand. In Brisbane, for example, the number of
households will readily adjust their budgets to meet these
households increased 35 per cent in 12 years to 2010, but
charges. After all, power prices at these levels are not
peak demand rose 104 per cent as three-quarters of homes
unusual by any measure around the world and real income
were equipped with air-conditioning, a third of them with
growth in Australia in this period is expected to be three to
two or more appliances.
four per cent a year.”
the paradox is that the nation’s rising wealth has created
While the political problem is that many of those who
the pre-conditions for large increases in the number of people
can afford to pay higher bills will object strongly to doing so,
who cannot afford to pay their electricity bills. “It is,” they say,
the social issues, as simshauser and his colleagues point
“as if consumers have been provided with a mispriced drug for
out, is that many thousands of households will not be able
long enough to establish a chronic addiction – and then they
to do so.
are confronted with the price doubling.” simshauser, nelson and doan envisage scenarios
How large is this problem? they have modelled a situation where, by 2015, a third of low-income households
where household electricity bills, as a consequence of
in nsW and queensland, or 6 per cent of the total in the two
generation and networks being expanded to meet this
states, will experience fuel poverty. this will add some
demand, will rise from $130 per megawatt hour in 2008 to
214,000 account holders in 3.2 million nsW homes and
between $250 and $300 in 2015.
about 130,000 in two million queensland homes.
PoWeRInG AUstRALIA VoLUMe 5
extrapolate this situation to the east coast as a whole and the number in strife could be half a million – and bear
Controversially, simshauser and his colleagues suggest government could consider hypothecating the
in mind this refers to homes, not people. Assume three or
extra funds they will receive from the Gst to contribute
four adults and children per home, perhaps an underestimate
to alleviating fuel poverty.
for low-income families, and you are looking at around
In nsW and queensland, they say, Gst receipts from
2 million Australians, not a number state or federal politicians
electricity sales to householders totalled about $410 million
could regard with equanimity.
in 2008. By 2015 these receipts will be of the order of
the situation is not helped by the fact that many low-income homes use more electricity than the national
$880 million to $1040 million. one of the issues that needs to be addressed in
average. “one might expect that low-income households
coming to terms with higher fuel poverty, they add, is
consume less than average amounts of power,” the authors
the “critical failure” of government assistance programs
say. ”But data from the Independent Pricing & Regulatory
to deal appropriately with the issue.
tribunal in nsW, looking at homes with gross incomes less
For example, the initial emissions trading scheme
than $31,000 a year, shows that 20 per cent of them use
proposal would have seen lump-sum payments delivered
between 8MWh and 12MWh annually, and 12 per cent use
to householders receiving compensation. Far better, they
more than 12MWh.”
suggest, to deliver the payments to the energy retailer to
evaluation of AGL energy’s customer hardship program shows that many of these households live in lower-value
ensure that the money is spent where it is intended. However governments decide to address the “bill
homes, most likely with three to four people per house, and
shock” issue that obviously is going to be a feature of this
with power consumption patterns skewed towards the medium
decade, it is clear from the research by simshauser and
to high range. Given that we now have a good idea of where
his co-authors that this is not a minor issue in terms of
power bills are heading, simshauser and colleagues argue, it
social responsibility, let alone the political pain likely to
would be a good idea for governments to ensure they better
be inflicted by voters upset by the new power regime.
understand this issue and have policies in place to deal with it. of course, state policies are already in place to assist
It is a situation not likely to be improved when, as currently planned, governments give the green light to the
senior members of the community, to provide emergency
electricity industry to roll out smart meters to all homes
help to households facing the possibility of the lights going
and then shift to “time-of-use” charges aimed at driving
out, to help those on life-support machines and, in
a change in consumption patterns by making it far more
queensland and nsW, to provide advice on reducing
expensive to use electricity at peak periods.
demand. these policies are designed for a much lower power price environment than the one that lies ahead.
one oF tHe IssUes tHAt needs to Be AddRessed In CoMInG to teRMs WItH HIGHeR FUeL PoVeRty Is tHe ‘CRItICAL FAILURe’ oF GoVeRnMent AssIstAnCe PRoGRAMs to deAL APPRoPRIAteLy WItH tHe IssUe.” jon stAnFoRd
as the world’s sunniest continent, there is significant
Utility-scale solar PV provides predictable and premium
potential for Australia to harness its vast solar resource.
value peak load, which complements existing power
While traditional fossil energy continues to play a crucial
generation. due to broad solar resource availability, solar PV
role in the supply of energy to our nation, renewable energy
plants can be located over a wide range of locations, thus
technologies, including solar photovoltaic (solar PV), will
enabling generation capacity to be sized and positioned
increasingly contribute to meeting Australia’s growing
where it is needed.
energy needs. With a policy and consumer shift towards
From construction to operation, solar PV farms boast a
sustainable energy, an increasing number of companies are
low environmental impact and provide enhanced grid power
selecting solar PV as part of their energy portfolio.
quality. In addition, utility-scale solar PV can be co-located with wind generation to provide greater energy diversity.
coMpleMenting existing technology
these generation benefits position utility-scale solar PV for
solar PV is a thoroughly proven and tested technology that
significant growth in the next few years.
has been demonstrated at utility scale across the world. europe, United states and Asia have more than 100
whAt we do
commissioned generating plants ranging from 10 to 80MW
suntech manufactures and markets quality, high-output,
and solar farms greater than 300MW are under construction.
cost-effective and environmentally friendly solar products for
With a world-leading solar resource, Australia is in a strong
electric power applications. suntech is the world’s largest
position to leverage off this extensive overseas experience in
manufacturer of crystalline silicon PV modules, supplying to
developing a significant market.
residential, commercial and utility-scale solar markets around the world. suntech was founded by dr Zhengrong shi, an Australian citizen who studied PV at the University of new south Wales (UnsW. Research and development (R&d) is the cornerstone of suntech’s global success. Utilising technology developed with UnsW, suntech is at the forefront of the rapid increases in PV efficiency and price reduction. through continued investment in technological advancement, with over 450 R&d professionals globally, including CsG solar in nsW, suntech drives improvement in the delivery of high efficiency solar PV technology.
From construction to operation, solar PV farms boast a low environmental impact, predictable energy growth and provide enhanced grid power quality.
PoWeRInG AUstRALIA VoLUMe 5
dependAble And bAnkAble technology suntech works closely with its engineering, procurement and construction (ePC) partners to deliver utility-scale solar PV
Solar farms are a natural extension of Australiaâ€™s sustainable approach to
that provide performance certainty at a competitive price.
farming. By harvesting the power of
two significant projects over the past year include:
Australiaâ€™s solar resource, Suntech
thailand: the largest utility-scale solar PV plant in south east Asia. the 44MW plant is owned by Bangchak Petroleum Public Pty Ltd, with finance provided by the
commits to providing renewable energy to future generations of Australians.
Asian development Bank.
Arizona, United states: suntech, in conjunction with ePC Zachry Holdings, is developing and constructing a 200MW plant for sempra energy.
our vision suntech is committed to delivering high quality, low cost PV solutions worldwide. this vision can be realised through focusing on technical leadership and applying groundbreaking R&d. suntech is working daily to realise its vision of global leadership in providing efficient solar solutions for a green future.
www.suntech-power.com | see page 98 for details
07 Conditions may brighten for solar power
PoWeRInG AUstRALIA VoLUMe 5
one of the biggest long-term issues for energy in
13 million tonnes of carbon dioxide in 2020, less than
Australia is whether solar power can become a substantial
one-tenth of the 5 per cent target for national abatement.
part of the electricity supply mix. the CsIRo, for one,
the upfront cost of this would be astronomical – in the order
believes that it can and is forecasting that it can meet
of $200 billion. With more plausible implementation over
30 per cent of national electricity supply – but that it will
10 years, we might be able to lower this cost to close to
take four decades to do so.
$100 billion; lower, but still hugely expensive abatement.”
the current outlook is not overly optimistic despite
to put this statement in context, the department of
enthusiastic support for the technology from various parts of
Climate Change estimates that the federal government’s
the environmental movement. Realisation that the subsidies
renewable energy target (Ret) will achieve annual
granted to those taking up rooftop solar photovoltaics (PVs)
greenhouse gas cuts of 29 million tonnes by 2020 and the
are an additional burden on the balance of household
industry estimates that meeting the Ret through building
consumers – to the tune in new south Wales, for example,
wind farms will cost between $20 billion and $25 billion
of an additional $1.5 billion over six years – has rubbed the
over the decade.
shine off the technology in a number of quarters. the still larger difficulty facing the PV sector in winning
spending five to 10 times as much to achieve less than half the emissions cuts is not exactly an advertisement for
strategic energy policy approval was summed up by the
solar PVs. In addition, the abatement benefit of universal
secretary of the treasury Martin Parkinson when he was
household solar, according to Martin Parkinson’s arithmetic,
serving as secretary of the department of Climate Change.
would be less than can be achieved by simply closing down
“If all the households in Australia were to install a 1.5kW
Victoria’s Hazelwood power station at about 3–4 per cent of
PV panel overnight,” he said, “this would save in the order of
this does not stop the technology being publicly popular,
are available. the renewable energy target purchase
however, with the PV capacity in Australia being lifted to
premiums are supposed to deliver this value, but the Ret
500MW after some in the community rushed the offer by the
market has actually been operating well below this level over
since-defeated Keneally government in new south Wales to
the past 12 to 18 months. solar PVs, however, today need a
provide the country’s highest feed-in tariff, a scheme cut
market price more than double that of wind energy.
back severely after 10 months and subsequently mired in
the well-known Australian tyranny of distance is another
controversy as the o’Farrell government struggles to come
issue for utility-scale developments. “In Australia,” the national
to terms with its less-than-shiny inheritance.
assessment says, “the best solar resources are commonly
the PV sector, in the meantime, also has its eye on
distant from the electricity markets, especially the major urban
another part of the market: industry managers point out that
centres on the eastern seaboard. this poses a challenge for
it has made virtually no inroads into the commercial power
developing new solar power plants as there needs to be a
market to date – a segment that today accounts for more
balance between maximising the solar radiation and
than 22 per cent of total national demand. the added
minimising the costs of connectivity to the electricity grid.”
attraction here is that some see the market share of commercial customers rising towards 30 per cent by 2030. Meanwhile, the federal government has resisted pressure to establish a national feed-in tariff for household solar PVs. existing schemes are all state and territory based. overseas, however, life is much brighter for the sector.
the large areas of land and optimum resource conditions required by concentrating solar thermal technologies, needed for utility-scale generation, it adds, are often only available long distances from customers needing the energy. the proponents of large scale solar generation are expecting 2011 to be the year in which the federal
According to the International energy Agency in its 2011
government gives their plans a strong boost, with
clean energy progress report, at least 17,000MW of solar
announcement of the initial new funding under its $1.5
power was added to global capacity last year, 90 per cent of
billion solar Flagships program, which aims to see up to
it being installed in six countries (Germany, spain, japan, the
four new solar power plants built, with a combined capacity
United states, Italy and Korea).
of up to 1000MW. the program aims to demonstrate solar
Back here, the Australian energy resource assessment published by the federal government in 2010 is both optimistic and pessimistic about the role of solar. on the one hand, the assessment predicts that use of solar energy to make electricity will grow at an annual average rate of 17.4 per cent, reaching 4,000 GWh a year by 2029–30. However, the solar share of electricity generation by 2030, it forecasts, will be just 1 per cent. By comparison, wind power then will hold 12 per cent, gas 37 per cent and coal 43 per cent. Most of the renewable energy balance will be provided by hydropower. just how hard the solar industry will have to run to be a major player in power supply by mid-century, as forecast by the CsIRo, is only too evident from the energy resource assessment, which was written by Geoscience Australia and the Bureau of Agricultural & Resource economics and sciences. they also note a paradox for the technology. Australia, the assessment points out, is a world leader in providing solar technologies, but the uptake domestically is low, principally because of their high cost. At present, wind projects are “bankable” with financiers where end-user prices of around $100 per megawatt hour
technologies at commercial scale and to accelerate the uptake of solar power. How far and how fast solar costs can be reduced remains
PoWeRInG AUstRALIA VoLUMe 5
a matter of debate. Proponents of the technologies assert that experience over the past three decades demonstrates that solar costs fall about 20 per cent every time the industry doubles production globally. they argue that continuing improvements in manufacturing efficiency will continue to drive down the cost of solar photovoltaic panels. the real light on the hill for the technology, however, seems more likely to lie in the development of utility-scale, concentrating solar power (CsP), which the CsIRo says has “tremendous potential” in Australia. the agency acknowledges that CsP’s big current drawback is its capital cost, but sees it as being capable of becoming a low-cost technology in a carbon-constrained environment, pointing to its ability to be combined with fossil fuels and its prospects for being integrated with
tHe ReAL LIGHt on tHe HILL FoR tHe teCHnoLoGy, HoWeVeR, seeMs MoRe LIKeLy to LIe In tHe deVeLoPMent oF UtILItysCALe, ConCentRAtInG soLAR PoWeR (CsP), WHICH tHe CsIRo sAys HAs ‘tReMendoUs PotentIAL’ In AUstRALIA.”
thermal storage to provide renewable energy well in to evening peak demand periods.
KeItH oRCHIson, edItoR
there are two basic types of concentrating solar collectors: those that focus the sun’s energy along a line and those which focus it at a point. the CsIRo says it is possible to achieve much higher concentration ratios with point focus collectors, although the required optical
below the solar industry has a lot of work to do if it is to become
precision is high. this enables the use of higher
a major player in the electricity industry. By 2030, it is expected to
temperatures to improve the efficiency of conversion
account for just 1 per cent of electricity generation in Australia.
of solar thermal energy into electricity.
tosHIBA: LeAdInG InnoVAtIon
toshiba is a world leader and innovator in pioneering high technology, a diversified manufacturer and developer of advanced electronic and electrical products spanning electronic devices and components through to power systems and infrastructure. the company was founded in 1875, and today operates a global network of more than 730 companies, with 204,000 employees worldwide and annual sales surpassing 6.2 trillion yen ($Us75 billion). toshiba aims to become one of the world’s foremost eco-companies and is now accelerating its initiatives for environmental management. toshiba companies around the globe are establishing ‘toshiba eco style’, which targets the greening of processes, products and technology and offers optimal solutions for challenges faced all around the world. In Australia and new Zealand, toshiba services the power industry thorough its subsidiary, toshiba International Corporation. since its inception in Australia in 1978, it has installed over 15,000MW of generation capacity and over 12,000MVA of transformer capacity. It has established itself as a market leader in the power sector providing generators, turbines, transformers and associated power infrastructure for this industry. toshiba International Corporation has since added to its capabilities by providing development, engineering and service expertise to enable this sector to provide reliable power to all residents of Australia and new Zealand. A recent focus has been to develop the ‘green’ capabilities of the company. Accordingly, toshiba has been significant in providing hydro and geothermal projects, and has recently entered the wind generation business through a strategic alliance with Korea’s Unison.
“We will contribute to the creation of a hydroelectric power toshiba is a world leader in single-stage pumped turbines, high head Francis turbines and high speed generators. the product range includes Francis, Kaplan and small hydro turbines, generators, control systems, governors and excitation systems. toshiba has recently commissioned Bogong Power station, one of the largest recent hydro developments in Australia.
sustainable society through our environmentally conscious processes, products and technologies in order to become one of the world’s foremost eco-companies.” norio sasaki, Director, President and CEO, Toshiba Corporation
PoWeRInG AUstRALIA VoLUMe 5
trAnsMission & distribution
toshiba’s range of equipment covers all transmission and
toshiba is a world leader in high capacity, high efficiency
distribution applications, up to and exceeding 500kV, and
steam turbine generators for combined cycle & cogeneration
includes power and distribution transformers, gas insulated
plants, and a world leading supplier of supercritical and
transformers, gas insulated switchgear, static VAr
ultrasupercritical steam turbines. toshiba Group is working to
compensation, HVdC systems and surge arrestors.
commercialise carbon dioxide capture technology to enable
toshiba’s capabilities include engineering, manufacturing,
next generation thermal power facilities to achieve zero-
installation, commissioning and service of a range of
emission power generation.
power equipment. In the past five years toshiba has installed over 12,000MVA of transformer capacity for
construction, engineering And service
power utilities and various industries and provided the
toshiba International Corporation has turnkey engineering
majority of the transformers for the new 500kV network
and service capabilities based in Australia. In recent years it
upgrades within nsW.
has successfully completed numerous turnkey turbine and generator overhaul and construction projects, as well as
transformer installation and service projects. this has
toshiba is one of the world’s largest manufacturers of
involved site management, safety and quality management
generators and turbines used in geothermal power
and provision of supervision and labour resources. the
applications. thanks to toshiba’s 50-plus years of
division is expanding to meet market needs for maintaining
experience in this sector, these turbines have established
(and increasing) efficiency in existing power plants.
industry benchmarks in output power and performance
toshiba International Corporation continues to develop
and have been awarded for their contribution to the world’s
its local engineering capability with the full support of the
geothermal developments. In the past year toshiba has
engineering groups in toshiba japan. this development
been awarded the contract to provide turbines for teMihi in
includes building expertise in toshiba mechanical,
new Zealand, one of the largest geothermal developments
electrical and control equipment for all facets of the plant
in the southern hemisphere.
operation and maintenance. With this growing expertise, toshiba is offering customers expert engineering and technical service during operation, maintenance planning and during unit shutdowns.
www.toshiba.com.au | see page 98 for details
08 Premier stateâ€™s prime supply challenge
PoWeRInG AUstRALIA VoLUMe 5
poWerinG new south Wales is not just an issue for
However, the impact of the global financial crisis
the state’s more than three million residential and business
and other issues has seen this target date pushed out to
account holders, the largest block of customers in the
2015–16,or even a little later according to data from the
country. due to geography and load, nsW impacts on the
Australian energy Market operator, which is responsible
east coast market as a whole and its approach to energy
for system security on the east coast, and even this is
and decarbonisation policies affects the southern and
disputed by the environmental movement.
eastern seaboard. As a result of the nsW privatisation debate of the past
nonetheless, there are a number of significant facts about nsW’s electricity environment that are not in dispute.
two years (which is now the subject of a judicial inquiry
the state-owned transmission business, transGrid, points
commissioned by the new o’Farrell government) the twin
out that a half century of demand growth has been driven
issues of supply security and power prices are of concern
primarily by the rising population and the marked increase
well beyond the state’s borders.
in electricity consumption per person, plus the sharp, and
even the supposedly simple issue of when new base-load generation needs to be commissioned in the
still-rising, spike in peak power needs. the nsW population has more than doubled since
state is a matter of controversy, let alone the politically
the mid-1950s to over 7 million people and is heading for
charged question of what fuel should be used.
7.6 million by the decade’s end. According to the Australian
the owen Inquiry reported in 2007, on the basis of projections of demand, that new base-load plant should
Bureau of statistics, it should be nearly 9 million by 2035. the increase in population has been accompanied
be commissioned in 2013–14; in other words, it should
by a slightly higher rate of growth in the number of
already be under construction.
households, thanks to a national decrease in the number
of people per home. today, about a third of nsW power
cause network capital outlays in nsW to virtually double
consumption occurs in houses, and the common residential
during each five-year period from 2000 to 2015, with the
requirement for lights, refrigeration, television, cooking,
2010–15 outlay reaching almost $15 billion.
water heating and space heating and cooling underlies the demand trend. As real incomes – that is their value in inflation-adjusted
Combined with political efforts to suppress the impact of supply costs on residential consumers in nsW, this trend has had a “slow tsunami” effect, hardly discernible to the
terms – continue to rise, per capita power demand can be
community and the media through most of the past decade,
expected to increase with them, even as less affluent
but crashing in to their consciousness in the past two to
families struggle to pay their bills.
three years and engendering a political backlash.
the trend is dramatically underlined by one set of
the political problem is that, while the impact of the
statistics: in 1996–97, nsW system energy demands
network charge is now unavoidable, power prices are
stood at 58,000 GWh, with a peak demand of 10,500 MW.
increasingly exposed in nsW to the effects of national and
By 2008–09, system energy requirements had risen to
state decarbonisation policy, the expected shift to higher-
75,800GWh and peak demand exceeded 14,500MW.
priced gas for generation and the expiry by 2017 of the existing
the industry’s current load forecasts are for system
very-low-priced coal contracts for the state-owned generators.
energy needs to be 86,000GWh annually in 2018-19 and peak demand to be 17,500MW. How far moves to drive more efficient use of household
one very public example of the power policy difficulties posed for politicians has been the Keneally government’s ill-fated move in 2010 to promote carbon abatement through
electricity supply will actually impact on demand is far more
the most subsidised rooftop solar power scheme for
than a $64 million question. Factors in play this decade will
householders in Australia. Introduced in january last year,
include persistent increases in power bills, the impact of
it was rushed by homeowners to such an extent that the
more stringent building regulations, requirements for higher
government moved to slash the feed-in-tariff by two-thirds
efficiency-rated appliances and campaigns to make the
in october 2010 and to cap the capacity that could be
public more aware of the need for energy conservation.
taken up. While this reduced the scheme’s flow-on cost
one of the major changes impacting on networks is
to householders by $2.5 billion between 2010 and 2016,
the switch in the state’s peak demand period. Until the late 1980s summer peaks in nsW were over-shadowed
it still left them with an extra $1.5 billion in charges. According to dr Paul simshauser, chief economist of
by maximum supply requirements in winter, spring
AGL energy and finance professor at the Griffith University
school of Business, this situation should lead to end-user
two developments have changed this. one was the introduction of natural gas, fuelled by supply from Bass strait and the Cooper Basin in south Australia, as an
power bills in nsW (and queensland) virtually doubling between 2008 and 2015. the factors impacting on nsW’s power policy
alternative for household water and space heating, and
environment are many. two that require close attention
for cooking. notoriously, air-conditioning in the past few
in the current term of government are settling the issues
years has become the other. the reduction in its cost as
of ownership of government-owned generation and/or
community wealth has risen has led to its use in about
its energy output, and overseeing development of the
eight homes in 10.
necessary base-load capacity to secure supply until
nsW has become a summer peak state, which has had consequences for the networks. In addition to a sharp
2020 and beyond. Following the Keneally government’s privatisation
increase in the construction of expensive assets that are
process of 2009–11, the retail divisions of the trio of
required for only a few weeks, at most, a year, a large
taxpayer-owned distribution businesses have been sold
part of the existing system was not designed to be under
to origin energy and tRUenergy, along with all the
maximum pressure in the hottest months of the year. According to the Australian energy Regulator, the
production from eraring energy and a large part of the output of delta electricity, a process so controversial that
need to meet peak demand, to service growing overall
most of the directors of the two “gencos” resigned rather
consumption and to replace rapidly ageing assets will
than sign off on the “gen-trader” deals.
POWERING AUSTRALIA VOLUME 5
Macquarie Generationâ€™s Bayswater power station is one of the two largest electricity supply centres in Australia, producing enough energy each year for two million homes.
the process has left the state still owning all the
While the debate continues over fossil-fuelled
delta and eraring assets as well as the power stations and
developments, the federal government’s renewable
production of Macquarie Generation in the Hunter Valley.
energy target is seen as driving a number of new wind
It has also left the new state government with the ongoing issue of deciding which form of base-load
farm projects in nsW. Fitch Ratings, in its 2011 assessment of power
generation development it should approve in order to
developments in Australia, suggests that 923MW of the
meet the impending demand/supply gap, a situation
5000MW of wind farms it expect to see built on the east
that may be exacerbated if, as consultants have predicted,
coast between 2011 and 2015 will be constructed in nsW
the available imports of power from interstate are reduced
as part of the $10 billion worth of generation investment
in the second half of the decade by the requirements of
it forecasts for the state in the next five years if a national
Victoria and queensland.
carbon price is introduced.
the mix of generating plant in any system needs to
over-arching all this is the hugely important issue
be balanced between base-load and peaking plants,
of ensuring there is adequate generation to cover plant
the former being units with relatively low fuel costs able
failures, not a minor factor in a state where an increasingly
to produce power continuously through most days of the
large amount of capacity will be more than 40 years old
year, and the latter having relatively high fuel costs but able
to be brought in to supply at short, sometimes only a few minutes’, notice. As electricity use in nsW has risen over the past
Consultants AeCoM, in undertaking the environmental assessment for the proposed Bayswater B options put forward by Macquarie Generation, have pointed out that, if
10 years by an average of 1310 GWh annually, state
new base-load capacity is not commissioned in ample time
reliance on net imports of power has increased to 7 per cent
to cope with rising demand, the existing state-owned plants
of its total consumption. However, energy available from
will be required to sustain a 17 per cent increase later in the
queensland over the qnI interconnector has been in
decade above their 2008–09 levels – roughly production of
decline for three years, reflecting higher demand in that
an extra 10,000GWh a year.
state, and the contribution from Victoria might even become
“Given that the oldest of these plants will be 45 by
negative later this decade as supply tightens south of the
then,” says AeCoM, “this has implications for maintaining
supply reliability – which may not be maintained on an
judging by the proposals now on the table in nsW, new base-load needs will be met by a combination of gas developments. Macquarie Generation and delta electricity have
ongoing basis.” As transGrid puts it, “Internationally, a simply understood and often accepted minimum generation reserve standard (which includes generation local to a
both put forward proposals – to be fulfilled by the
system and interconnection capability with adjoining
private sector under existing government policy – for the
systems) is 15 per cent.”
development of 2000–2400MW of combined cycle gas units in 400MW tranches. the businesses each nominated the construction of two 1000MW high-efficiency conventional coal-fired plants as their preferred option, but there is widespread belief that,
What this means is that, if the nsW maximum demand by the decade’s end is 20,000MW – compared with 14,500MW today – then 23,000MW of generation needs to be available within the state or be readily accessible over its borders. Lying beyond all these issues is another of substantial
under the decarbonisation environment, these projects are
magnitude: the impact of national decarbonisation policy
neither “bankable” nor likely to win political support.
on nsW generation. this poses three big questions:
A competing gas-fired proposal has been put forward
1. Which state coal-burning units – in total they consume
by tRUenergy, which received environmental planning
some 30 million tonnes of black coal a year – may be
approval in early 2011 to build a second base-load gas
required to shut operations when a carbon price
plant at its tallawarra site on the nsW south coast, a move
reaches the high levels required to drive national
the company says will depend significantly on national
abatement towards the 2020 target of 160 million
decisions about carbon pricing.
tonnes a year?
PoWeRInG AUstRALIA VoLUMe 5
InteRnAtIonALLy, A sIMPLy UndeRstood And oFten ACCePted MInIMUM GeneRAtIon ReseRVe stAndARd Is 15 PeR Cent.” tRAnsGRId
2. How, and at what cost, can the surviving coal-burning generators be retrofitted for carbon capture and sequestration, assuming the technology becomes
addressed in the past decade, the policy solutions to them are becoming more urgent. Meanwhile, consumer angst about the cost of their
commercially available, and where would the tens of
electricity supplies is continuing to reach new heights, not
millions of tonnes of liquid carbon dioxide captured
least because the arrival of really cold winters (like that of
2010) as tariffs rise on 1 july each year means that the price
3. Will even future CCGt plants be allowed to be built
shock in october in terms of quarter-on-quarter bill rises is
without at least being carbon capture ready and what will
greater each time, attracting ever stronger media attention
this requirement mean for both their commissioning time
and raising the temperature of political debate.
scales and the cost of their supply? the problem for government in nsW, and in many cases
the late 2010 “q-on-q” price difference in nsW, Macquarie Bank reports, was 30 per cent for many households, leading
for the federal government, is that there are no easy answers
politicians campaigning in the March 2011 state election to
to any of these issues. Because they have not been
describe public anger over power bills as “white hot.”
a reLiabLe supply of electricity is essential for the growth and economic prosperity of Australia.
“A reliable supply of electricity is
transGrid owns and manages one of the largest high voltage transmission networks in the country, connecting
essential for the growth and economic
generators, distributors and major end users in nsW and the ACt.
prosperity of Australia.”
transGrid’s transmission lines stretch for 12,600 kilometres along the nsW east coast, southern and western borders. Its high voltage network transports electricity over hundreds of kilometres safely and efficiently, interconnecting with the queensland and Victorian grids. With over 91 substations and switching stations, transGrid delivers electricity to more than three million households and businesses. As the backbone of the national electricity Market, transGrid’s network facilitates interstate energy trading transporting over 75,100GWh of energy annually. our vision And Mission As a leading electricity transmission network service provider, transGrid is committed to safety, the community and commercial success. transGrid’s core function is to provide safe, reliable and
Between 2010 and 2014 transGrid will undertake more
efficient transmission services to nsW, the ACt and the
than 88 projects across nsW as part of a $2.6 billion capital
national electricity Market. transGrid is built on a strong
set of core values. Its work environment promotes a culture
this multi-billion dollar capital works program is needed
which is committed, collaborative, caring and enterprising
to ensure the transmission network continues to deliver
– excellence in all we do.
secure, reliable and safe supply of electricity. there is a
With more than 1000 employees spread across nsW,
strong focus on capital efficiency and the growth in
transGrid understands the knowledge and experience of
transmission capacity supports electricity sourcing from the
its people play a lead role in maintaining a reliable supply
lowest cost generators.
of electricity for nsW.
transGrid is also undertaking a major refurbishment and replacement of ageing assets to ensure efficient supply
building for the future transGrid has two major services:
to its customers. since 2008, transGrid has connected two new gas fired
providing a reliable transmission system for customers;
and two new wind powered generation developments and
has facilitated numerous upgrades to existing generators.
enabling access to the market for generators across
negotiations are currently underway to connect up to several
the national electricity Market.
renewable energy sources such as wind and solar.
PoWeRInG AUstRALIA VoLUMe 5
conserving the environMent GreenGrid is an award winning 12-year partnership between transGrid and Greening Australia. the partnership has rehabilitated an area the size of 2,000 football fields in the Murrumbidgee and Lachlan catchments of new south Wales. In 2010 GreenGridâ€™s Boorowa River Recovery program was a finalist in the 2010 United nations Association of Australia World environment Awards and national Landcare awards.
leAders in deMAnd MAnAgeMent transGrid recently implemented a 350MW demand management solution for the newcastle, sydney and Wollongong areas during the summer of 2008/09 â€“ the largest of its type ever delivered in the national electricity Market. subsequently, more than $14 million was returned to nsW customers by transGrid on completion of the project.
www.transgrid.com.au | see page 98 for details
09 New energy vision for the West
PoWeRInG AUstRALIA VoLUMe 5
Western austraLia, says the state’s Minister
economic development while contributing to the
for energy Peter Collier, is unique in the wealth and
community’s high standard of living. energy consumption
diversity of its energy resources. It is unique in its
has doubled in this time. How we choose to meet our
distance from other energy networks, too. “From an
energy needs over the next 20 years is a critical issue.”
energy perspective, it is an island state.” As a rule-of-thumb, more than 85 per cent of Australia’s electricity consumption (9 million customers) is on the east coast, with 10 per cent (1 million customers) in the southwest corner of WA, thousands of kilometres away. Unlike the east coast energy market, Collier points
Underpinning the problem is an expected increase in the state’s population from today’s 2.2 million to around 2.8 million in two decades’ time. It is now trying to bridge the policy gap by delivering a strategic roadmap out to the year 2031 and this is not an exercise that can be accomplished quickly. the
out, primary energy supply, and the way energy is used,
government’s energy 2031 directions paper was
in the West is determined largely by choices state
published in March and it will be the end of 2011 before
policymakers and the community alone can make.
consultation about its proposed directions is completed.
despite this, Collier says, Western Australia lacks
Collier says the government proposes a series of
a cohesive, long-term energy plan. the state’s last
strategies structured around six major themes, ranging
comprehensive energy policy was developed in 1979.
from security of supply to provision of efficient
the discussion paper the coalition government of
infrastructure, improved efficiency for using energy,
Premier Colin Barnett released in december 2009 paints
including effective markets and delivering universal
the scene like this: “over the past 20 years, the WA
access to energy in a state notable for having the majority
energy industry has played a major role in driving state
of its population and commerce in the southwest corner
and the bulk of its huge mineral development sprawled across the north of the world’s second largest sub-national jurisdictions. “our vision for the next two decades,” he adds, “paints a picture of the energy system that will meet strategic goals of secure energy, reliable energy, competitive energy and cleaner energy.” In a national environment where decarbonisation is high on the agenda, WA is confronted by a situation where fossil fuels meet 95 per cent of its overall energy requirements today and are expected, on present trends, to be the source of 92 per cent in 20 years’ time. Being far removed from the east coast’s major brown and black coalfields has meant the state has come to rely on natural gas to fuel a large part of its power generation. WA consumes more gas each year than new south Wales, the ACt and queensland combined. Gas meets 60 per cent of the state’s electricity output today and is forecast to provide 68 per cent of projected increases in capacity. Fortunately, WA is adjacent to one of the world’s great offshore gas provinces. Unfortunately, the dominant focus on exporting the gas as LnG has exposed domestic customers to world parity prices, substantially higher than for gas consumers over east. Gas cost is the greatest bone of contention. Unlike the east coast, where at least the wholesale price of energy is not yet adding to the end-user price problems created by massive network outlays, in the West there are rising customer concerns about the impact of gas costs on power bills and where they may be heading.
oUR VIsIon FoR tHe neXt tWo deCAdes WILL Meet stRAteGIC GoALs oF seCURe eneRGy, ReLIABLe eneRGy, CoMPetItIVe eneRGy And CLeAneR eneRGy.” PeteR CoLLIeR, WA eneRGy MInIsteR
PoWeRInG AUstRALIA VoLUMe 5
left In the West, like eastern states, transmission is as vital to power supply security as generation.
the situation has fuelled an epic verbal duel between the domGas Alliance, representing large industrial consumers, and the Australian Petroleum exploration & Production Association, representing suppliers, over the past five years. the arguments are lengthy and complex, but basically evolve around the user group claiming that period of domestic undersupply leading to the price spikes has been contrived and that major producers are “warehousing” fields for potential developments as LnG projects. Meanwhile, the suppliers are responding that the WA market is “healthy” and “functional”, arguing that recent price rises have generated a supply response that, over time, will alleviate pressures by bringing new supplies to market without regulatory intervention. the concern, says dr Mike nahan, Chairman of the WA Legislative Assembly economics and Industry standing committee, which has been investigating the issue, is that “high gas prices are seriously undermining the state’s competitiveness and imposing high and excessive costs on businesses and households”. In addition, in a region where extreme summer weather is a major lifestyle factor, peak demand, which is powering along on the back of installation of air-conditioning in eight out of 10 homes, is also imposing considerable demand for network capital outlays for assets little used (10 per cent of the system is called upon just 50 hours a year), but considered absolutely essential in old-style “century” heat conditions. Western Power, the government-owned networks business, estimates that peak power requirements could increase 90 per cent over the next 20 years, necessitating some $7.5 billion in transmission expenditure and $14 billion in distribution outlays. this would represent expenditure of $3 million a day every day for two decades. Residential demand for electricity in the West has risen sharply since the early 1990s, when it averaged about 4500 kWh a year. now the southwest household average is about 6250kWh annually and climbing. Household consumption in the north of the state is higher still, now averaging 8500kWh annually, driven by high air-conditioning loads.
rIght some 7400 megawatts of additional generation capacity will be needed.in southwest Wastern Australia by 2021.
As We MoVe FoRWARd, It Is IMPoRtAnt tHAt We PUt In PLACe tHe PoLICy, ReGULAtoRy And InCentIVe MeCHAnIsMs tHAt WILL ensURe tHe eneRGy MARKet WILL Be dynAMIC, HIGHLy CoMPetItIVe And eFFICIent. PeteR CoLLIeR, WA eneRGy MInIsteR
just to add spice to this witch’s brew of problems, development of WA’s immense mining resources wealth in the northwest and mid-west regions, according to the
need to include a substantial amount for augmenting the transmission system to connect new generation power. A complicating factor is who gets to build the new
Chamber of Mines and energy, could require supply by the
generation capacity – the private sector or the state-owned
end of this decade of as much electricity as is used today
generator, Verve energy. Courtesy of decade-old reforms to
in the southwest interconnected system.
the Western Australian market, Verve is limited to owning
the Independent Market operator believes some 7400 MW of generation capacity will be needed in the southwest by 2021, requiring commissioning of 2275MW of
3000MW, 60 per cent of available capacity. It would like to build an extra 2000MW of plant to meet rising demand. scattered still further afield in an area the size of
new plant, while synergy, the state-owned energy retailer,
India are 29 little stand-alone power systems serving
sees a requirement for 6000MW in new capacity over 20
communities that live unimaginably remote lifestyles by
years at a cost of $12 billion. the capital outlay will also
east coast standards.
PoWeRInG AUstRALIA VoLUMe 5
since these comments were made, the state government has approved a further 5 per cent increase in power prices from mid-2011 and the budget has estimated that further rises of 34 per cent will be needed by 2014–15. state treasurer Christian Porter said the government had to take a difficult and unpopular decision to reverse years of stable power prices and to move them “at least within sight of the costs of generation and delivery”. engineers Australia, when it produced its five-year assessment of the state’s infrastructure in 2010, warned that current end-user tariffs still did not provide true cost-reflective pricing and urged that prices be raised along a glide path that reflected broad social and economic considerations. While recognising recent efforts to expand generation and the transmission network, engineers Australia urged reform of the state’s wholesale electricity market and pointed to the lack of transmission capacity in many urban and regional areas, the ageing of assets and reliability concerns in regional areas. the government also proposes to broaden electricity reliability standards to recognise peak constraints on the power system – and it will consider incorporating direct load control capability in building design standards. down this path lies more “power pain” and “electric shocks” – in the jargon of the media in Australia – and the government speaks plainly about the issue: “the price of electricity, gas and transport fuels will increase substantially over coming decades. this increase will flow through to almost all goods and services, potentially placing financial pressure on people with low or fixed incomes.” It says: “While seeking to ensure all consumers can afford essential energy services, the government also has to provide energy systems that are safe, secure and Looking at the WA situation, the Committee for the economic
reliable. Revenue needs to be at an adequate level to
development of Australia has commented: “the energy
operate the supply systems and to support investment in
infrastructure (of the state) has been neglected for far too long.
maintenance, replacement and enhancement as needed.”
For decades there was insufficient investment in generation
In this respect, the West is not isolated from governments
capacity. As a consequence, the current economic expansion
on the east coast at all.
is challenging WA’s capacity to deliver adequate, reliable energy throughout the state. “Furthermore, the move towards better cost-reflective pricing
energy Minister Peter Collier sums up the challenge for his government and all the others like this: “our future involves larger population and economic growth serviced
has resulted in the cost of energy rising by 42.5 per cent in two
by smarter energy systems. As we move forward, it is
years, after tariffs for residential customers had not increased
important that we put in place the policy, regulatory and
since 1997–98, during which time the cost of supplying electricity
incentive mechanisms that will ensure the energy market
had increased dramatically.”
will be dynamic, highly competitive and efficient.”
InstItUte FoR MIneRAL And eneRGy ResoURCes
the university of Adelaide’s Institute for Mineral and energy Resources is developing technology and understanding that will improve the efficient and sustainable use of the world’s mineral and energy resources for the benefit of society, industry and the environment. the Institute is focusing on the link between mineral production and energy consumption and aims to be the premier research and educational facility for the mineral and energy resources sectors in the Asia-Pacific region. Mineral and energy resources expansion in south Australia is anticipated to be the single most significant driver of economic development in this state for at least the next two generations. these sectors will have to address many global challenges, including real energy costs increasing markedly as the world competes for energy and water constraints and associated cost rises which will continue to impact on the community. Local and international communities are also pushing for constraints on carbon environmental regulation and sustainability issues be addressed. the increasing scale and complexity of mineral and energy resource developments are raising the risk of environmental damage and capital cost overruns. the Institute for Mineral and energy Resources aims to address these global challenges through advancing the science and technology needed to enhance the prospectivity, discovery and extraction of mineral and energy
“Mineral and energy resources expansion in
resources and to lower the cost and increase the efficiency
South Australia is anticipated to be the single
of cleaner energy generation, storage, transmission and utilisation of energy. World-class researchers in the Institute,
most significant driver of economic
working in multidisciplinary approaches spanning
development in this State for at least the next
engineering, science, economics, law and social science, will enhance the delivery of innovative research outcomes
and its impact on society the major impact of the Institute’s research and development activities will be to maximise the social, economic and environmental benefits of the minerals and energy industries across regions, states, national and
Institute for Mineral and Energy Resources
international communities. www.adelaide.edu.au/imer/ | see page 99 for details
PoWeRInG AUstRALIA VoLUMe 5
WesteRn PoWeR’s sMARteR eneRGy FUtURe
Western poWer is a state government owned corporation that builds, maintains and operates the electricity network known as the south West Interconnected system (sWIs). We ensure the sWIs delivers a safe, secure and reliable electricity supply to almost one million connected customers. the energy industry is undergoing a revolutionary change and with that comes challenges and opportunities. In order to navigate our way through this dynamic environment, our resource dependent economy needs a long-term, visionary energy policy. that is why we are keen supporters of the Western Australian Government’s strategic energy Initiative: energy2031. Central to Western Power’s input into the initiative is our belief in the importance of achieving cost reflectivity in electricity pricing and long-term infrastructure planning. We
“The infrastructure Western Power builds
also believe it is crucial that, as a society we become more
today will serve the community for the
efficient in the way we use energy. that is why we have invested in energy efficiency education, are part of the Future
next 50 years.”
energy Alliance and are the lead in the federal government’s Perth solar City program. the seI promotes a ‘smarter energy future for Western Australians’. As the provider of network services for electricity customers throughout the greater south west, Western Power is ready to play a key role in helping achieve this vision. Western Power believes that it is crucial that we as a society become more efficient in the way we use energy and, through our smart grid program, we are exploring ways to provide consumers with the tools they need to actively manage their electricity consumption. details of Western Power’s vision for Western Australia’s energy future can be found in the ‘About Us’ section of our website.
www.westernpower.com.au | see page 99 for details
10 How big a boon is gas for generation?
PoWeRInG AUstRALIA VoLUMe 5
is this the golden age for gas supply domestically in
0.6 per cent annually, delivering a situation where
Australia at last? this is the key question tantalising, and
coal-burning plant had fallen back from today’s delivery
perhaps haunting, the gas industry as the energy business
of 200,000 gigawatt hours a year to 150,000GWh, while
moves in to a new decade.
annual gas-powered electricity production had risen to
origin energy Managing director Grant King summed up the promise and the problem when he addressed the
a heady 135,000GWh. this scenario sees the gas sector’s share of
50th anniversary conference of the Australian Petroleum
generation rising from 19 per cent today to 37 per cent
Production & exploration Association in Brisbane. “A
and coal’s share falling back to under half.
golden age for domestic gas consumption was being
this situation is mirrored in the number of gas-fired
predicted in the late 1990s,” he said, “but by 2002 it was
generation developments currently proposed for
clear these projections would not be met. the opportunity
Australia. they represent 60 per cent of the projects at
for gas had been lost to coal, primarily new coal-fired
present either under way, in a detailed planning phase
generation in queensland.”
or being investigated.
At about the same time the federal government was
the critical issue that will decide whether a “golden
issuing its national energy resource assessment, the
age” for gas domestically is now really emerging will
essential background for an energy white paper that still
be energy policy, especially the imposition of a carbon
has not been published.
price and the establishment of a cap on allowable
In it, the government projected that the rise of gas as
emissions per unit of production for future power
a power supply fuel would average 5 per cent a year from
stations, a measure now being investigated by the
2007–08 to 2029–30 as coal averaged a decline of
King says a carbon price in the range of $20 to $40 a
It offers low intensity in carbon, water use and land
tonne will drive substantial fuel substitution for base-load
requirements, with only 15 hectares required to build a
generation, reducing the emission intensity of the electricity
1000MW plant that requires less than a third of the water
industry at the lowest possible cost.
needed for cooling by an equivalent capacity coal-burning
one of the major advocates for the dash for gas is
unit. It has a large resource base close to demand points,
santos Managing director david Knox, who lauds it as “an
linked by an extensive and growing pipeline network. Gas
immediate, proven way to transform power generation away
generation is a proven technology across the spectrum
from high-carbon coal to low-carbon carbon gas, buying
of base-load, intermediate and peaking supply.
time for advances in renewable technologies”. Knox sees gas generation as a “natural partner” to
Knox argues that power generation abatement is critical to delivering Australia’s decarbonisation policies.
support the integration of intermittent renewable generation
It accounts for 35 per cent of total national emissions,
with the power grid.
he points out, with more than 80 per cent of electricity
In a series of commentaries and speeches on the
generated from coal. “If we are serious about addressing
issue over two years, he has highlighted three key features
climate change, we must lower the carbon intensity of
that underwrite the “compelling potential” of the fuel.
PoWeRInG AUstRALIA VoLUMe 5
left delta electricity’s Colongra Power station is a 667MW gas fired, low emission power station that can be turned on almost immediately to respond to spikes in electricity demand.
He is dismissive of the role of renewable energy in meeting base-load power requirements. “We all share the ambition of zero-emission base-load,” he says, “but it is
and that large-scale development of the technology will overcome a lot of the problem. APPeA, on the other hand, points to modelling that, says
simply not available in Australia and it will be many years,
deputy Chief executive Mark McCallum, shows that every
possibly decades, before there is sufficient commercial
5000MW of wind capacity will require approximately 2100MW
confidence about such a technology, its affordability and its
of gas generation to ensure reliability of supply.
Looking to the long term, McCallum suggests that,
As for the nuclear option, Knox says: “Right now, it is
even allowing for a doubling in consumption between
illegal in this country – and I don’t know anyone who seriously
now and 2050, a combination of the renewable energy
thinks that this is going to change any time soon or that we are
target (which requires 20 per cent of demand to be met
going to have nuclear power in our energy grid within the next
from wind and other zero-emission technologies) and
decade at the very minimum.”
gas generation will meet power needs with emissions
He also rejects the notion that there may not be adequate reserves of gas to fuel both a major change in power
20 per cent below where they are today. Knox cites south Australia, where gas already
generation domestically and the huge expansion of LnG
provides half the power supply, as an example of what
exports now on the drawing boards.
can be achieved. “If we replace south Australia’s two
“Australia,” he told one conference, “is blessed with
ageing coal-fired power stations in the state’s north with
enormous gas potential, one that will take us well into the
gas, upgrade the existing gas generation fleet and meet
next century and probably beyond that. there is ample
the state government’s ambition to achieve a 33 per cent
and affordable natural gas in Australia to meet both growing
renewable energy target by 2020, south Australia’s
domestic and export requirements.”
emissions intensity for power generation will halve, dropping
Knox and the industry point to the fact that east Australia’s known gas reserves have tripled in 10 years, with total reserve
well below 0.4 tonnes of carbon dioxide per megawatt hour.” this intensity would be half to two-thirds the level of
life extended from 2015 to 2060, and this before full evaluation
emissions from conventional power stations fuelled by
of the large new south Wales coal seam methane deposits or
black and brown coal.
the “tight gas” resources in the Cooper, where conventional reserves have been in a decline for a number of years. What happens in nsW in the next decade will be important
Knox believes similar reductions can be achieved across Australia if coal-fired power stations are replaced by gas plants as they reach the end of the normal working life and a greater
to the gas sector’s domestic future. At present there are six
role is provided for renewable generation. seventy per cent
gas-fired power stations in the state, with a combined capacity
of the coal-burning plants are more than 20 years old.
of 2103MW. there are 14 gas-based projects proposed for
“of course, it is easier for south Australia than the
development in the state. the number of them that are
coal states in the east,” he says, “but the fact remains that
commissioned to deliver base-load will have a big impact
the transition to a lower-carbon Australia can only take place
on east coast gas demand.
with a greater role for gas in the fuel mix.”
In nsW and nationally, the inter-relationship between gas
Knox argues that timing is vital in resolving policy affecting
generation and wind power tends to be controversial. some in
electricity production. “We are rapidly approaching the point,”
the wind sector and in the environmental movement argue that
he argues, “where critical decisions must be made on the
too much emphasis is placed on the variability of wind power
future direction of Australian power generation.”
11 Interstate energy trading on the rise
PoWeRInG AUstRALIA VoLUMe 5
Go back eight years and the only wind turbine in south
In similar vein, when Premier Rann adopts a target for
Australia was a 150KW unit in the outback near Coober
large-scale further investment in wind farms in south Australia,
Pedy. today the state has 1000MW of wind capacity
he has his eye on other states as a market for the product.
following a $2 billion surge in investment and it has another 1000MW of projects in various stages of planning. “If south Australia was a nation state,” boasts its Premier, Mike Rann, “it would rank second in the world behind denmark for the amount of wind energy it hosts as
“south Australia,” says Rann, “has the potential to contribute 30 per cent of the entire nation’s renewable energy target for 2020. our state can be a major source of green power for the other eastern states.” His state, he adds, has only 8 per cent of Australia’s
a proportion of its total electricity generation.” note the
population, but it has “done incredibly well” in attracting
careful use of that word “hosts”.
nearly 50 per cent of the nation’s grid-connected wind
While denmark is famous for the amount of wind capacity
power, about 30 per cent of its solar power and more
on its soil, and for the manufacturing industry with world reach
than 90 per cent of investment in “hot rock” geothermal
that it has built on the back of this investment, most of the power
development, still at the embryonic stage.
generated by the turbines is actually sold across its border to
According to Fitch Ratings, the state can expect to
other countries. Meanwhile, the danes’ needs are met by
attract more than a fifth of east coast wind investment
domestic coal-burning plant and by importing hydro-power and
between now and 2015, representing a need for investors
nuclear energy from other scandinavian states.
to raise more than $2 billion in debt and equity.
the key to the danish experience is the strong
Central to Rann’s grand plan for wind is one of
scandinavian transmission system and a coherent
the world’s best resources for the technology, the
wholesale energy market for the region.
this triangular-shaped area of 45,000 square kilometres,
the study has been supported by four wind developers
a similar size to tasmania, is bounded in the east by spencer
with interests in the area: Acciona energy, transfield
Gulf, in the west by the Great Australian Bight and in the north
services, origin energy and Pacific Hydro, who have told
by the Gawler Ranges.
the Australian energy Market Commission, which is
It has strong and consistent wind speeds – with many
examining a new mechanism to encourage scale-efficient
areas recording better than eight metres a second, considered
network extensions on the east coast, that the “green grid”
excellent for wind generation – and extensive areas suitable for
concept will not be viable under the current market
large-scale developments. the region is home to only 55,000
framework because it does not allow investors with varying
people, most of whom live in Port Augusta, Port Lincoln,
project timelines the effective opportunity to co-ordinate
Whyalla and Ceduna.
their activities to build transmission infrastructure of an
A study by a consortium of Macquarie Capital Advisers (a division of Macquarie Bank), engineers WorleyParsons and
efficient size. the big drawback for the eyre Peninsula for power supply
law firm Baker & McKenzie has concluded that the area has
purposes is that it is situated on the far western fringe of the
the potential for development over time of 10,000MW of wind
“national” electricity market – the east coast grid that delivers
capacity, more than the total requirement of the current
80 per cent of Australia’s power needs – and at present has a
renewable energy target for the whole of Australia.
meagre transmission link with even the rest of its own state.
PoWeRInG AUstRALIA VoLUMe 5
the “sA Green Grid” consortium wants to start
the costs, to quote a well-known economist, are
exploiting the peninsula’s wind potential by obtaining
“non-trivial” – estimated at $5.8 billion for the first stage,
transmission system upgrades within south Australia and
of which about $1.4 billion would be transmission
on the link to Heywood in Victoria, opening the way
for development of 2000Mw of wind capacity. the second stage would require a link from near Port
Apart from Mike Rann’s “green hub” ambitions, there is another strong motive for the transmission developments
Augusta in to new south Wales, with a second 2000MW
that would flow from the eyre Peninsula project. the area
of wind projects.
is perceived by the mining industry to be a “mini Midwest”,
just the first stage, according to the consortium, in theory
a reference to the West Australian iron province. this is an
would be large enough in times of high wind to meet the
area that in 1990s was seen as unrealistically ambitious in
state’s entire average electricity needs – but in practice a
its push to be a major minerals exporter, but is now a key
large amount of the energy would flow to Victoria.
new iron ore province. the mining industry believes that
the first part of “Green Grid,” the consortium claims, will “significantly modernise” the southern power market, increasing network capacity for wind power from the present
25 million tonnes a year of iron could be being exported from the eyre Peninsula in the second half of this decade. two of the big problems are the inadequacy of the
900MW towards 4000MW, and enabling the south Australian
peninsula’s 132kV electricity network and the lack of
plants to drive up their contribution to the renewable energy
access to several hundred megawatts of base-load
target from its existing 5.7 per cent to 30 per cent.
power. Another is the lack of a large water supply for
the second phase, it says, will provide large volumes of renewable energy to the northern part of the national
ore processing. the answer to the third issue is seen to be a
energy Market, which has less favourable wind conditions,
substantial desalination project, another large-scale
and will provide considerable assistance to the development
user of electricity which elsewhere in Australia is calling
of remote base-load geothermal power.
on wind power to meets its needs.
the jokers in this pack, of course, are cost and the
Premier Rann, who contributed to the eyre Peninsula
transmission development rules, which federal and state
“green grid” study from his government’s $20 million
governments and the industry are working to recast. the
renewable energy fund, says there is no doubt the state
consortium acknowledges that the first stage proposal is
has the intellectual capabilities as well as the climatic
unlikely to pass the present regulatory test for new transmission
conditions to develop alternative energy sources and
developments – which favours network upgrades for generation
energy-saving initiatives, as well as deliver substantial
located close to the existing grid and to load centres.
economic advantages to south Australia.
tHeRe Is no doUBt tHe stAte HAs tHe InteLLeCtUAL CAPABILItIes As WeLL As tHe CLIMAtIC CondItIons to deVeLoP ALteRnAtIVe eneRGy soURCes And eneRGy-sAVInG InItIAtIVes, As WeLL As deLIVeR sUBstAntIAL eConoMIC AdVAntAGes to soUtH AUstRALIA.” MIKe RAnn, PReMIeR oF soUtH AUstRALIA
12 The solar flagship program
PoWeRInG AUstRALIA VoLUMe 5
after a long gestation period, the federal government’s
and Pacific Hydro, will involve installing 650,000 PV panels
“solar Flagship” program has borne fruit: with the choice of
on an area the size of 600 football stadiums with capacity of
Moree in new south Wales and Chinchilla in queensland
150MW, able to produce 400GWh a year. this is enough
as the sites for large-scale projects to demonstrate
electricity to serve 45,000 homes or the residential demand
In welcoming the decision to support a $923 million
the Chinchilla development, the 250MW solar dawn
solar photovoltaic development at Moree, the nsW
solar thermal and gas hybrid power station in southwest
Resources & energy Minister, Chris Hartcher, pointed out
queensland, will produce enough energy to serve another
that the impact is economic as well as environmental.
the project, which is calculated to help avoid emissions
solar dawn is to be located close to a 44MW booster
of 10.8 million tonnes of carbon dioxide over three decades,
project for Cs energy’s Kogan Creek power station, the
equal to the annual output of one mid-range coal generator,
largest single coal-fired unit in Australia.the Kogan Creek
is expected to contribute between $100 million and $125
booster system is also based on Areva’s CLFR technology.
million directly to the local area, including creating 500
the federal government will contribute $464 million to the
indirect jobs around Moree while the construction is under
$1.2 billion cost of the Chinchilla project, with the
way over about three years. the nsW government is
queensland government tipping in another $75 million.
contributing $120 million to the development, with another $306.5 million coming from the federal government. the project, which is to be constructed by a joint venture involving BP solar, spain’s Fotowatio Renewable Ventures
the plant will be built by a joint venture of Areva solar, Cs energy and Wind Prospect CWP, using Areva’s Australian-designed compact linear fresnel reflector technology to combine solar energy with a gas back-up
system. It will use mirrors focussed on water-filled tubes to create steam and turn turn turbines when the sun is shining adequately. the joint venture claims that the Chinchilla plant will contribute 50,000 tonnes of emissions abatement annually over its 25 year life. the project could be described as a kind of homecoming for Areva solar. the company was founded in Australia in 2002 as solar Heat & Power, changed its name to Ausra, when it shifted its focus to California, and was acquired in 2010 by the French engineering giant. the solar dawn joint venture also points to the economic benefits of its development as well as its environmental contribution: the project is estimated to bring $570 million in economic activity to the Chinchilla region. the two projects are among eight the federal government nominated for consideration under its $1.5 billion “solar Flagships” program, oversee by Resources & energy Minister Martin Ferguson – their selection leaving half the subsidies still to be allocated.
tHe joInt VentURe CLAIMs tHAt tHe CHInCHILLA PLAnt WILL ContRIBUte 50,000 tonnes oF eMIssIons ABAteMent AnnUALLy oVeR Its 25 yeAR LIFe. KeItH oRCHIson, edItoR
POWERING AUSTRALIA VOLUME 5
ABOVE AREVA Solar’s Australian-pioneered Compact Linear Fresnel Reflector (CLFR) technology will be used in the Solar Dawn project to boost the station’s coal-fired steam generation system
WIND. IT MEANS THE WORLD TO US.
a WorLd that, if we have our way, will be powered by far, far more than the 10 per cent of electricity expected to be generated by wind by 2020. A world in which wind takes its place alongside oil and gas thanks to its ever more efficient use for electricity production, and the efficient and reliable delivery of that electricity on an industrial and global scale. A world populated by far more than the 43,000 turbines that weâ€™ve already raised on behalf of our customers in 66 countries across six continents A world in which we are relentlessly committed to focusing our 30 years pioneering, our R&d centre (the largest in the world), every shred of revelatory data from our real-time monitoring of thousands of turbines, and the unmatched diversity of capability and skills residing in our more than 20,000 people worldwide. All of whom are focused on one pure goal: generating the greatest and most sustainable return on wind for our customers. About vestAs AsiA pAcific Vestas Asia Pacific is the Asia Pacific business unit of Vestas, the world leader in wind technology. Its head office is located in singapore and it has sales and service offices in Australia, south Korea, India, japan, new Zealand, Philippines and taiwan. v112â€“3.0Mw designed for low cost of energy designed for low and medium wind speed sites, the V112-3.0MW turbine delivers energy at a highly competitive cost. the turbine is very productive thanks to its large swept area, improved rotor efficiency and superior serviceability and reliability. thanks to Vestasâ€™ state-of-the-art testing centre, its reliability is assured.
www.vestas.com | see page 99 for details
PoWeRInG AUstRALIA VoLUMe 5
WILson tRAnsFoRMeR CoMPAny
WiLson transformer Company is an independent, Australian-owned transformer manufacturer founded in 1933 by jack Wilson and lead by his son Robert since 1979. the Company engineers and manufactures power and distribution transformers, package substations and speciality transformers for the electric utility, industry, mining, oil and gas sectors. Wilson transformer employs 650 people across its Glen Waverley, Wodonga and international sites, and a further 600 people are employed in joint ventures. With world-class design and manufacturing capability and a series of overseas offices and joint ventures, Wilson transformer services both domestic and overseas markets, exporting goods and services to the UK, UsA, saudi Arabia, Malaysia and the regions surrounding these countries. Pole, pad and ground mounted transformers from 50kVA to 5000kVA 72kV are manufactured and supplied from the Wodonga distribution business unit. substation and generator transformers from 5MVA to 300MVA 400kV, mobile, rectifier, furnace, loco and trackside transformers all available with monitoring and controls are manufactured and supplied from the Glen Waverley power business unit. through its subsidiary, dynamic Ratings in the UsA, Wilson transformer provides Australian made monitoring and control equipment for power transformers and electrical apparatus, with leading Us utilities choosing to standardise on dynamic Ratings systems for smart grid applications. the Company is also entering the fault current limiter
Wilson transformer Company built its reputation on
market, taking equity in a new global company, Gridon, to
quality and reliability and does whatever it takes to protect
develop and manufacture these products for world markets.
this hard-won record. the Company is accredited to As
Fault current limiters are new products that are being
9001:2000 quality system and As/nZs 4801:2001
developed to economically limit rising fault levels in electricity
occupational Health & safety Management system.
grids. oil and sF6 testing and analytical services facilitating
Recently inducted into the Victorian Manufacturing Hall of Fame, Wilson transformer is a truly innovative company
condition-based monitoring and fault diagnosis is
and a leading Australian design, manufacturing and
undertaken through a joint venture with UsA-based tj|H2b
Analytical services. Wilson transformer are specialists in transformer life cycle management, with over 50 staff dedicated to specialist site works and over $3 million of mobile equipment for transformer testing, service and repairs.
www.wtc.com.au | see page 99 for details
tHe PoWeR nUMBeRs GAMe Residential customer growth Australia’s east coast market had 6,364,000 residential customers in 1995–96. By 2009–10 (the latest data) this had grown to 7,996,000 — an increase of 25.6 per cent. In the same period Western Australia’s residential customer base grew by 46.8 per cent.
Residential power demand Householders on Australia’s east coat consumed 43,413 GWh of electricity in 1995–96. In 2009-10 residential demand stood at 60,386GWh — an increase of 39 per cent. In the same period Western Australia’s residential consumption grew by 88.9 per cent.
Business power demand Australia commercial and industrial customers consumed 99,650GWh of electricity in 1995–96. By 2009–10 business consumption had risen to 142,620GWh — an increase of 43 per cent.
Burning coal In 1995–96, coal-fired power stations across Australia burned 41.4 million tonnes of black coal in three states (new south Wales, queensland and Western Australia) and 52.6 million tonnes of brown coal in two states (Victoria and south Australia). By 2009–10 coal consumption had risen to 54.8 million tonnes of black coal and 70.3 million tonnes of brown coal. nationally, black coal’s share of power generation has fallen from 56.8 per cent to 53 per cent, while brown coal’s share had dropped from 25.9 per cent to 24.3 per cent. the natural gas share for generation effectively had doubled to 14.2 per cent. Hydroelectric power’s share had fallen back from 9.5 per cent to 5.6 per cent. Wind farms did not figure in the 1990s generation mix and had achieved a 2.7 per cent share in 2009–10.
POWERING AUSTRALIA VOLUME 5
Building new substations and replacing those built 40 to 50 years ago are high priorities.
dIReCtoRy ContACt InFoRMAtIon FoR oUR FeAtURed CoMPAnIes
Australian Coal Association A: Po Box 9115, deakin ACt 2600 P: 02 6120 0200 F: 02 6120 0222 e: firstname.lastname@example.org W: www.australiancoal.com.au www.newgencoal.com.au
AGL eneRGy LIMIted A: Level 22, 101 Miller street, north sydney nsW 2060 P: 02 9921 2999
F: 02 9921 2465
e: email@example.com W: www.agl.com.au
Ausgrid A: 570 George street, sydney nsW 2000 P: 131 525
F: 02 9269 2830
e: Please go to ‘Contact us’ on our website W: www.ausgrid.com.au
eneRGeX Limited A: 26 Reddacliff street, newstead qld 4006 P: 07 3664 4000
F: 07 3025 8301
e: firstname.lastname@example.org W: www.energex.com.au
PoWeRInG AUstRALIA VoLUMe 5
Ge A: 99 Walker street, north sydney nsW 2060 P: 61 2 9978 8168
F: 61 2 9978 8297
e: email@example.com W: www.ge-energy.com/lms100
gentrack A: Level 9, 390 st Kilda Road, Melbourne Vic 3004 P: 03 9867 9100
F: 03 9867 9140
e: firstname.lastname@example.org W: www.gentrack.com
Granite Power Limited A: Level 6, 9 Barrack st, sydney nsW 2000 P: 02 8252 6100 F: 02 8252 6199 e: email@example.com W: www.granitepwr.com
Horizon Power A: stovehill Road, Karratha WA 6714 P: 08 9159 7250 F: 08 9159 7288 e: firstname.lastname@example.org W: www.horizonpower.com.au
IBM Australia A: 601 Pacific Highway, st Leonards nsW 2065 P: 02 9397 8814 e: email@example.com W: ibm.com/au/en/
siemens Ltd A: 885 Mountain Highway, Bayswater Vic 3153 P: 137 222
F: 1300 360 222
e: firstname.lastname@example.org W: www.siemens.com.au/energy
sMeC Australia A: 76 Berry street, north sydney nsW 2060 P: 02 9925 5555 F: 02 9925 5564 e: email@example.com W: www.smec.com
suntech Power Australia Pty Ltd A: 82-86 Bay st, Botany nsW 2019 P: 02 9695 8180 F: 02 9316 5270 e: firstname.lastname@example.org W: www.suntech-power.com
toshiba International Corporation A: 2 Morton street, Parramatta nsW 2150 P: 02 9768 6600 F: 02 9890 7542 e: email@example.com W: www.toshiba.com.au
transGrid A: Level 9, 201 elizabeth street, sydney nsW 2000 P: 02 9284 3000 or toll free 1800 222 537 e: firstname.lastname@example.org W: www.transgrid.com.au
F: 02 9284 3456
PoWeRInG AUstRALIA VoLUMe 5
Institute for Mineral and energy Resources Institute for Mineral and Energy Resources
A: the University of Adelaide, sA 5005 P: 08 8313 1448 e: email@example.com W: www.adelaide.edu.au/imer/
Vestas Australian Wind technology Pty Ltd A: Level 4, 312 st Kilda Road, Melbourne Vic 3004 P: 03 8698 7300 F: 03 9645 0111 e: firstname.lastname@example.org W: www.vestas.com
western power A: 363 Wellington street, Perth WA 6000 P: (08) 13 10 87 e: email@example.com W: www.westernpower.com.au
WILson tRAnsFoRMeR CoMPAny Pty Ltd A: 310 springvale Road, Glen Waverley Vic 3150 P: 03 9560 0411 F: 03 9560 0499 e: firstname.lastname@example.org W: www.wtc.com.au
index A ABARE, 42 Acciona Energy, 86 ACIL Tasman, 27 AECOM, 66 aeroderivative gas turbines, 32–33 aged assets, 22 AGL Energy, 22 Bogong Hydro Power Project, 10 customer hardship programs, 55 air-conditioning impact on energy consumption, 66, 75 APPEA, 83 Areva Solar, 90 Ausgrid, 16 Ausra, 90 Australia Pacific Liquefied Natural Gas (APLNG), 43 Australian Bureau of Statistics, 65 Australian Coal Association, 11 Australian Energy Market Commission, 86 Australian Energy Market Commission (AEMC), 28 Australian Energy Market Operator, 15, 23, 65 Australian Energy Regulator, 22, 66 Australian Industry Group (AIG), 28 Australian National University, 28 Australian Petroleum Exploration & Production Association, 75, 81
B Baker & McKenzie, 86 Barnett, Colin, 73 base-load plants, new, 40 Bass Strait, 66 Bayswater B environmental assessments, 66 black coal, 11 Bogong Hydro Power Project, 10, 62 Boorowa River Recovery program, 71 BP Solar, 89 brown coal projects, 22 Bureau of Agricultural & Resource Economics and Sciences, 60
C carbon capture storage (CCS), 11, 38 British commercial scale projects, 39 pricing, 47 Carbon Pollution Reduction Scheme (CPRS), 35 carbon price announcement of, 35 impact on base-load generation, 82 impact on refinancing projects, 22 impact on vertically-integrated businesses, 20 Centre for Climate Economics and Politics, 28 Chamber of Mines and Energy, 76 Chernobyl, 49 clean coal technology development, 47 Clean Energy Council, 42 CLFR technology, 89, 90 CO2CRC Otway Project, 11 coal power conventional plants, 66 share of electricity generation by 2030, 60
coal seam methane deposits, 83 COAL21 Fund, 11 coal-fired power stations, 22, 89 Cobbora mine, 20 Collier, Peter, 73, 77 combined-cycle gas turbine (CCGT) generation, 40 carbon footprint and pricing, 45–46 investment in, 23 Committee for the Economic Development of Australia, 77 compact linear fresnel reflector (CLRF) technology, 89, 90 concentrating solar power (CSP) collectors, 61 Contact Energy, 32 conventional organic rankine cycle technology, 35 Cooper Basin, 66, 83 CopperString transmission link, 23 Council of Australian Governments, 28 Crawford School of Economics and Government, 28 CS Energy, 22 Kogan Creek power station, 89 CSIRO, 42, 60, 61
D Deloitte, 22 Delta Electricity, 20, 65, 66 Denmark and wind generation, 85 Department of Climate Change, 61 distribution systems capital expenditures, 20 Western Australia, 75 Doan, Thao, Dr, 53, 54 Docking, James, 34 Domanski, Roman, 28 domestic energy markets reform, 14 DomGas Alliance, 75 Dow Jones Sustainability World Index 2010/11, 10 Dynamic Ratings, 93
E east coast energy market, 19, 65 green hubs, 23 residential growth and demand, 94 Ecogen 2010 Clean Energy Awards, 10 electricity supply impact of politics on, 9 end-user power bills, 28, 66 Energex, 17 Energy 2031, 73 energy markets distortions, 36, 38 energy power industry media coverage, 22, 28 political impact on, 36, 66 private investment prospects, 36 privatisation of, 66–68 energy pricing poor households priced out, 53–55 Energy Retailers Association, 30 energy security issues, 36 Energy Supply Association of Australia (ESAA), 30–31 energy usage increase in households, 13–14
POWERING AUSTRALIA VOLUME 5
Energy Users Association of Australia, 28, 30 Energy White Paper, 9, 15, 35–39, 40 Engineers Australia, 77 Eraring Energy, 20, 65, 66 ETSA Utilities, 22 Eyre Peninsula, 23, 85–86 drawbacks for development, 87
F fault current limiters, 93 federal government Energy White Paper, 9, 15 greenhouse gas emissions target, 61 market-friendly policies for energy mix, 15 projected capital expenditure on energy resources, 6, 19 renewable energy target (RET), 60, 61 Smart Grid, Smart City program, 16 Solar Flagships program, 60, 89 solar investment support, 23 Ferguson, Martin, 13–15, 35, 90 Fitch Ratings, 20, 22, 66, 85 Fotowatio Renewable Ventures, 89 FTSE4Good Index, 10 fuel poverty, 53–54 alleviating, 55 Fukushima Daiichi power plant, 36, 49 accident, 8, 45 Future Energy Alliance, 79
G gas hybrid power stations, 89 gas power, 81–83 carbon footprint, 82 interrelationship with wind power, 83 rise in electricity generation, 81 share of electricity generation by 2030, 60 gas reserves, 83 gas supply industries capital expenditures, 20 GE, 32–33 Gentrack, 34 Gentrack Velocity, 34 Geoscience Australia, 60 geothermal energy, 51 pricing, 46 role in 2030 electricity supply chain, 6 TeMihi project (NZ), 63 Gillard government’s position on nuclear power, 47 Global CCS Institute, 47 Gorgon LNG Project, 11 Goss, Wayne, 19 Government Trading Enterprise, 50 GRANEX, 35 Granite Power, 35 green grid, 87 GreenGrid, 71 Greening Australia, 71 Greiner, Nick, 19 GridON, 93
H Hartcher, Chris, 89 Hazelwood power station, 8, 61 Horizon Power, 50 households feed-in tariffs for solar power, 60 history of energy usage in, 13–14 low-income households and access to electricity, 53–55 Western Australian energy consumption, 75 hydro power, 51 Bogong Hydro Power Project, 10, 62 share of electricity generation by 2030, 60 hydro-electric power stations, 23
I IBM, 25 Independent Market Operator, 76 Independent Pricing & Regulatory Tribunal, 55 Institute for Mineral and Energy Resource, 78 intelligent utility systems, 25 interim technologies, 46 International Energy Agency, 15, 30, 49, 60 investors and lack of clear market signals, 40
K Keating, Paul, 19 Kikiwa substation, 43 Kina Biopower, 51 King, Grant, 81, 82 Knox, David, 82 Kogan Creek power station, 22, 89
L Lake Cargelligo solar thermal plant, 51 Lihir Gold, 51 lobby groups, 30 low-cost electricity, 19, 53 low-income households electricity usage, 53–54 unaffordable electricity pricing, 53 Loy Yang Power, 39, 42
M Macquarie Bank, 69, 86 Macquarie Capital Advisers, 86 Macquarie Generation, 20, 41, 65 McCallum, Mark, 83 mDATA21, 34 media coverage of energy industry, 22, 28 meter data management software, 34 Minister for Resources and Energy, 13–15, 35 Ministerial Council on Energy, 28 Monbiot, George, 49
N Nahan, Mike, Dr, 75 national decarbonisation policy impact on state energy generation, 68–69 national demand and supply states with majority, 9 National Electricity Law, 30 National Electricity Market, 14–15, 19, 70, 87 infrastructure, 27 objectives of, 28, 30 reforms within, 28, 31 National Generators Forum, 28, 31 national greenhouse gas emissions reduction target, 8 natural gas Western Australian dependence on, 74 Nelson, Tim, 53, 54 network sector capital expenditure main reasons for, 20, 22 New South Wales 1970s energy requirements, 53 Cobbora mine, 20 forms of base-load projects, 65, 68 gas-fired power stations, 83 impact of national decarbonisation policy, 68–69 Keneally government, 60, 66 Moree solar photovoltaic development, 89 new base-load projects, 65 O’Farrell government, 60, 65 peak demand period, 66 power consumption, 66 privatisation of energy industry, 66, 68 QNI interconnector, 65 state-owned generation businesses, 65 state-owned generators, 20 subsidised rooftop solar power scheme, 66 New Zealand geothermal developments, 63 wind farm projects, 43 nuclear power accidents, 8, 36, 43, 49 nuclear power plants, 47, 49 arguments for, 49 global projects under construction, 47
O O’Farrell government, 60 open-cycle gas turbine (OCGT) generation, 36 investment in, 23 Orchison, Keith, 6–9 Origin Energy, 66, 86 offshore joint ventures, 23 Owen Inquiry, 65
P Pacific Hydro, 86, 89 Papua New Guinea joint venture projects, 23 Parkinson, Martin, 61 peak demand, meeting, 66 peak demand pricing, 14, 54 Port Jackson Partners, 19 Porter, Christian, 77
power energy industry smart billing systems, 34 privatisation of energy industry, 66, 68 Purani River hydro-electric power station (Papua New Guinea), 23
Q Queensland 1970s energy requirements, 53 Chinchilla solar photovoltaic development, 89 future renewable energy projects, 23 post-flood power restoration process, 17 QNI interconnector, 65 Solar Flagships program, 89 state-owned generation sectors, 22
R Rann, Mike, 85, 87 renewable energy least competitive options, 40 renewable energy growth market, 43, 51
S SA Green Grid, 87 Saddler, Hugh, Dr, 28, 30 Santos, 82 Shi, Zhengrong, Dr, 56 Siemens Picture the Future research, 42–43 Simshauser, Paul, Dr, 28, 31, 53, 54, 55, 66 single-staged pumped turbines, 62 Smart Grid, Smart City program, 16 smart grids, 43 smart meters, 19 Smart Utilities Australia and New Zealand 2011, 25 SMEC, 51 Snowy Mountains Hydroelectric Scheme, 51 Solar Dawn solar thermal power station, 89 Solar Flagships program, 60, 89 Solar Heat & Power, 90 solar power, 51 challenges for, 60 concentrating solar power (CSP), 61 federal government schemes, 60 feed-in tariffs, 60, 66 as interim solution, 46 joint ventures, 90 Moree solar photovoltaic development, 89 photovoltaic development, 56–57 role in 2030 electricity supply chain, 6 rooftop solar photovoltaics (PVs), 56–57 share of electricity generation by 2030, 60 subsidised rooftop solar power scheme, 66 viability of, 56–57 Son La Hydro Power Plant, 51 South Australia mineral and energy resources expansion, 78 natural gas supplies, 66, 83 power blackouts, 22
POWERING AUSTRALIA VOLUME 5
power distribution services, 22 SA Green Grid consortium, 86–87 wind power generation, 85 South West Interconnected System (SWIS), 79 spot market prices, 30–31 Stanwell Corporation, 22, 53 Stratford Power Station (NZ), 32 Suntech, 56–57 Synergy, 76
T Tarong Energy, 22 Tasmania Basslink project, 23 Te Uku Wind Farm, 43 The Boomerang Paradox, 53 time-of-use pricing, 14 TJ|H2b Analytical Services, 93 Toshiba International Corporation, 62–63 Transfield Services, 86 TransGrid, 65, 68, 70–71 transmission network capital expenditure, 27 Western Australia, 75 transmission network service providers, 70–71 TRUenergy, 66
U United Kingdom commercial scale CCS projects, 39 United Nations South Africa summit, 8 University of Adelaide, 78 utility-scale developments, 61 challenges for, 60
V vertically-integrated energy business expenditure on renewable energy, 20 Verve Energy, 76 Vestas Asia Pacific, 92 Victoria emissions targets, 36 merchant generators, 22
W WA Legislative Assembly Economics and Industry, 75 Western Australia, 73–75 carbon capture storage (CCS) projects, 11 peak demand period, 75 Perth Solar city program, 79 regional and remote power supplier, 50 regulatory and pricing structures, 77 reliance on natural gas, 74 state government’s Energy 2031 paper, 73, 79 Western Power, 78 Wilson, Jack, 93 Wilson, Robert, 93 Wilson Transformer Company, 93 wind farm development, 66 wind farm generation investment in, 22–23 wind power Eyre Peninsula, 85–86 interrelationship with gas power, 83 reliability of supply, 83 share of electricity generation by 2030, 60 South Australian investment in, 85 Wind Prospect CWR, 90 Worley Parsons, 86
photo credits Cover iStockphoto; pp.2-5 Commstock; p.7 Snowy Hydro; pp.8-9 Horizon Power; pp.14-15 ENERGEX; p.19 ETSA; pp.20-21 Loy Yang Power; p.23 Verve Energy; p.27 Commstock; p.29 Transend Networks; pp.30-31 CS Energy; p.37 Commstock; p.39 Loy Yang Power; p.40 International Power Australia; p.41 TransGrid; p.45 ANSTO www.ansto.gov.au; pp.46-47 ERM Power; p.48 ANSTO; pp.53-54 iStockphoto; pp.59-61 Horizon Power; p.65 Ausgrid; p.67 Macquarie Generation; p.69 Ausgrid; p.73 iStockphoto; pp.74-75 Western Power; pp.76-77 Verve Energy; p.81 ERM Power; p.82 Delta Electricity; p.85 Origin; p.86 Western Power; p.89 SMA Solar Technology courtesy Bill Parker; p.91 AREVA Solar; p.95 Hydro Tasmania
PoWeRInG AUstRALIA VoLUMe 5
ABoUt tHe AUtHoRs KeItH oRCHIson Keith orchison was managing director of the electricity supply Association of Australia from 1991 to 2003 and, before that,
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notes: Includes index
Policy makers are seeking to launch a step-change in electricity supply and consumption in Australia. The federal government plans to reduce coal-fired power stations’ role to meeting 43 per cent of demand by 2020. This will mark the nation’s first major step toward a decarbonised economy.
PROUDLY ENDORSED BY
POWERING AUSTRALIA | VOL 5
APIA • Australian Power Institute • Clean Energy Council Energy Networks Association • ERAA • NGF • ESAA Cover Photography: Caroline Foldes
Policy makers are seeking to launch a step-change in electricity supply and consumption in Australia. The federal government plans to reduce...