The height of the decarbonisation hill Australian governments need to climb this decade is underlined in the electricity industry’s just-released annual data.

The Energy Supply Association of Australia’s 2010 yearbook reports that coal-burning to generate power rose again in the 12 months to 30 June last year, a period when the economy was perceived as stressed by the global financial crisis.

The country’s power stations burned 57.1 million tonnes of black coal in 2008-09, up almost 500,000 tonnes from the previous financial year, and 70.5 Mt of brown coal, up 1.4 million tonnes.

To rub in the message, ESAA forecasts that eastern seaboard electricity demand will be almost 20 per cent higher by the end of the decade and Western Australia demand will increase by almost 44 per cent.

This will deliver some 10,000 gigawatt hours more power needs in 2019 than can be met by the Rudd government’s re-approved renewable energy target – the equivalent of what Tasmania or the Hunter Valley requires annually.

On ESAA figures, the big demand push is going to come in the two eastern black coal states, Queensland and New South Wales, where consumption is projected to rise by almost a quarter over the decade.

Coal burning in these states now stands at more than 52 million tonnes compared with 50.5 Mt in 2001. The abatement target set by Rudd requires greenhouse gas emissions to be 5 per cent below the 2000 level by the end of this decade.

One of the notable shifts in the eastern seaboard power scene thrown up in the ESAA forecasts is how Queensland is gunning away from Victoria as an electricity consumer. The two states were level-pegging in demand terms back in 2004-05. Queensland is now 7 per cent ahead and ESAA predicts that its consumption will be nearly a third higher than Victoria’s by the end of the decade.

With electricity generation a major contributor to emissions, the national abatement goal can only be reached if some of the coal-burning plants in South Australia, Victoria, NSW and Queensland are shut down.

However, the NSW government has proposals before it to build another 2,000 MW of coal generation (or 2,400 MW of combined-cycle gas plant) by 2016 to meet the state’s increasingly-urgent need for new baseload capacity.

Queensland, according to ESAA, has more than 8,200 MW of fossil-fuelled capacity under consideration for development by 2017, most of it fired by natural gas or coal seam methane.

Australia-wide, the electricity industry commissioned 2,000 MW of plant in 2008-09 and has 3,134 MW of capacity under construction at present with a further 3,444 MW under advanced planning.

Coal-burning plants now account for 81.2 per cent of generation output, with natural gas delivering 12.2 per cent. Hydro-electric generators have fallen back marginally because of drought impacts to 5 per cent.

The ESAA yearbook also throws light on the relatively slight impact of the global financial crisis on business activity here.

It reports only tiny falls in business demand in NSW and Victoria in 2008-09, no change in WA and rises in consumption in Queensland, SA and Tasmania. Nationally, business demand was 143,174 GWh last financial year – a mere 265 GWh retraction.

Residential consumption kept right on going up, rising another 3.4 per cent, pushing demand to a record 204,300 GWh.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey