NEM emissions down by almost 7 per cent

The latest CEDEX report by pitt&sherry shows that NEM emissions have fallen by just under seven per cent for the first full year of carbon pricing. The NEM accounts for just under 90 per cent of Australian electricity supply.

According to pitt&sherry principal consultant, energy strategies, Dr Hugh Saddler: “The complex relationship between generation and emissions reflects the continually changing interaction between the Large Scale Renewable Energy Target, the factors driving reduced demand and the carbon price.

“All these factors are important contributors to the good news story of steadily falling Australian electricity generation emissions. Given the complexity of the interactions it would be rash to assume that the acceleration in the downward trend as experienced over the last year would continue if any one of these drivers were removed,” Dr Saddler said.

Annualised electricity supplied by black coal generators continued to fall in June, bringing the total fall for the year to 4.7 TWh. Annualised generation from brown coal power stations recorded a very small increase in June, but recorded a fall of 5.5TWh for the whole year. During the preceding five years black coal generation had already fallen to over 15 per cent, whereas brown coal had increased slightly.

Interestingly, output from gas and wind generation both fell slightly during 2012-13, while hydro generation continued to increase consistently since the beginning of calendar year 2012.

For the 2012-13 year, coal fired generators supplied 72.5 per cent of NEM generation, while gas supplied 12.2 per cent and hydro and other renewables supplied 15.3 per cent.

This issue of CEDEX Electricity Update includes WA demand data for the first time. The Independent Market Operator (IMOWA) reports electricity sent out from power stations, excluding the substantial quantities of electricity consumed at the power stations themselves, termed auxiliary load. Coal-fired power stations have much higher auxiliary loads than gas-fired power stations, with brown coal, on average, higher than black. Auxiliary load at hydro and wind power stations is effectively zero.

By contrast with WA, demand, as defined in the NEM, includes auxiliary loads; it also includes electricity generated by coal-fired power stations during off-peak (overnight) periods to pump water to upper storages at the pumped storage facilities in NSW and Queensland.

Adjusting for these factors effectively converts quantities of electricity generated at power stations to quantities of electricity sent out from power stations.

These adjustments for pumped storage and auxiliary loads have been applied to total state demand in the NEM, as reported by the Australian Energy Market Operator (AEMO), to convert demand as generated to demand as sent out, making the WA and NEM figures directly comparable.

“Interestingly, these adjustments have removed about one fifth of the total fall in NEM demand over the year, as reported by AEMO, because lower coal fired generation has reduced auxiliary load,” Dr Saddler said.

“It can be seen that notwithstanding the very strong economic and population growth experienced in WA over the last few years, demand for electricity in the South West Interconnected System (SWIS), which covers most of the WA population, though not the areas where new LNG plants and iron ore mines are being constructed, has not grown since 2011.

“The whole of month data published by Independent Market Operator Western Australia (IMOWA) is delayed by several months so we do not know whether the beginning of a decline in demand, which is apparent in the data to the end of February 2013, is continuing, as it is in all the NEM states except Tasmania,” Dr Saddler said.