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

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 23 TWh of electricity per year, about 10% 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.

* 1.534 Mt in 2004, @ 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 2006 Australia's power stations produced 255 billion kilowatt hours (TWh) of electricity*, 65% more than the 1990 level and growing at 3.3% pa.

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

Of this gross amount, about 18 TWh is used by the power stations themselves, leaving 237 TWh actually sent out (net production). Then about 17 TWh is lost or used in transmission and 9-10 more in energy sector consumption, leaving 210 TWh for final consumption (or 187 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 2005 the electricity was produced from 50.6 gigawatts (GWe) capacity, of which 57% is coal-fired, 20% hydro and 18% gas.

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

About 80% of Australia's electricity is produced from 57% of the capacity, reflecting the fact that this is 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 36% of the country's net carbon dioxide-equivalent emissions (200 out of 550 Mt/yr, an increase to 2003 of 47% since 1990). Black coal plants in NSW average about 850,000 tonnes CO₂ per TWh, Victorian brown coal plants emit over 1.2 million tonnes CO₂ per TWh.

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. In cents per kilowatt hour some 2004 pool prices were:
Average Victoria 2.8 c/kWh
Average NSW 3.9 c/kWh
Average Qld & SA 3.2 c/kWh

The difficulties matching supply with demand can be judged from the fact that Victorian demand ranges from 3800 MWe to 8800 MWe, and that in NSW from 4800 to 13,000 MWe.

Australian electricity prices are almost the lowest in the world. Residential prices are 36% of those in Japan and a little over half of those in most of Europe. Industrial prices are 30% of Japan's and 60% of most European prices.

This creates a major problem in attracting investment in new generating plant to cater for retiring old plant and meeting new demand - a 35% increase by 2020 is projected. Industry sources in 2004 said that 4 c/kWh wholesale was needed to justify investment in black coal plant.

Load curve of the Victorian electricity system in two peak days in 2006, showing the relative contributions of base, intermediate and peak-load plant duty. The shape of such a curve will vary markedly according to the kind of demand. Here, the peaks reflect domestic demand related to a normal working day, with air conditioner demand evident on the hot summer day.

Note that base-load demand accounts for the majority of electricity supplied. The base-load here is about 5300 MWe, and while total capacity must allow for nearly double this, most of the difference is normally supplied by large intermediate-load gas-fired plant. The peak loads are typically supplied by hydro and gas turbines. Under the wholesale electricity market, power stations bid into the market and compete for their energy to be despatched. Thus the sources of supply at any particular moment are determined by some balance between plant which (once installed) can be run very cheaply, and that which while costing less to build, uses more expensive fuel. Source: Vencorp

Transmission

Because most of Australia's electricity is produced near the main load centres there is less high voltage (500, 330, 275, 220 kv) transmission needed than in some countries. There is nearly as much at 132 kv as at those four higher levels combined (at 500 kv transmission losses over 500-1000 km are halved).

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