Australia's Electricity

(updated April 2012)

• Australia is heavily dependent on coal for electricity, more so than any other developed country except Denmark and Greece. Three quarters is derived from coal. 
• Australia's electricity is low-cost by world standards. 
• Natural gas is increasingly used for electricity, especially in SA and WA. 
• After many years of low investment, there is a major challenge to build more generating capacity. 

Electricity consumption in Australia has been growing at nearly double the rate of energy use overall. In 2008-09 about 11,000 kWh per capita was used, including that incorporated into exports.

Electricity generation takes 44% of Australia's primary energy, and in terms of final energy consumption, electricity provides 24% of the total. test

Energy in Australia

Much of the energy exported from Australia is used for generating electricity overseas; three times as much black coal is exported as is used in Australia, and all of the uranium production is exported.

Australia also exports a significant amount of energy in mineral products. Exports of aluminium metal* alone embed some 25 TWh of electricity per year, about 9% of the country's total gross production. Some 43 TWh is used in non-ferrous metals (aluminium smelter production uses 29 TWh/yr), almost half of the industry total.

*Production 1.98 Mt in 2008, export of 1.67 Mt, @ av 15 kWh/kg. 

Most of the growth in value-adding manufacturing in the past 20 years has come from industries which are energy- and particularly electricity-intensive. The growth has occurred in Australia because of relatively low electricity prices coupled with high reliability of supply and the proximity of natural resources such as bauxite/alumina.

Electricity

In 2009 Australia's power stations produced 261 billion kilowatt hours (TWh) of electricity*, 68% more than the 1990 level and growing at up to 3% pa.

* 254 TWh public supply + 12 TWh for non-grid autoproducers. 

Of this gross amount, about 19 TWh is used by the power stations themselves, leaving 242 TWh actually sent out (net production). Then about 17 TWh is lost or used in transmission and 11 more in energy sector consumption, leaving 214 TWh for final consumption (or 189 TWh apart from aluminium exports).*

* Vencorp suggest that typically net TWh are about 10% less than gross TWh, with transmission and distribution losses often being 10% 

In 2008-09 the electricity was produced from 56 gigawatts (GWe) capacity, of which 30.3 GWe (54%) was coal-fired, 14.7 GWe (26%) gas or multi-fuel, 1.35 (2.4%) oil, 7.1 GWe (13%) hydro and 2.5 GWe (4.5%) other renewables.

Most of this is associated with the grid-connected National Electricity Market in the southeast and east of the country, the second grid being the South West Interconnected Supply area in Western Australia.  A smaller grid is in the Pilbara.

In 2009, 78% of the power was produced from coal, 14% from natural gas, 4.7% from hydro.

In Victoria the main fuel is brown coal (lignite), in NSW and Queensland it is high quality black coal, and in WA and SA it is much lower quality black coal.

Fuels for Electricity, emissions

About 78% of Australia's electricity is produced from 54% of the capacity, reflecting the predominance of base-load demand and the fact that coal provides the main base-load capacity in Australia. See also chart below. Note that electrically, Western Australia is isolated.

Australian coal is mostly very clean by world standards, so electricity is produced without very much sulfur dioxide being emitted (or requiring expensive equipment to avoid its emission).

However, power generation contributes 35% of the country's net carbon dioxide-equivalent emissions (200 out of 580 Mt in 2008). The 2008-09 figure calculated from thermal plants in an ESAA benchmarking study is 204 Mt, about 37% of total. In this, black coal plants in NSW emit 920,000 tonnes CO₂ per TWh, Victorian brown coal plants emit 1.29 million tonnes CO₂ per TWh.

From mid 2012, a carbon tax of $23 per tonne of CO2 will apply to many industries.

The Cost of Electricity

Much electricity in Australia is now traded so that distribution companies buy at the best price available from hour to hour from competing generators. 

The difficulties matching supply with demand can be judged from the fact that Victorian demand ranges from 3900 MWe to 10,000 MWe, and that in NSW from 5800 to 15,000 MWe.