Major Electricity

Major electricity

generation projects

November 2012

George Stanwix

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The Australian Government acting through BREE has exercised due care and skill in the preparation and compilation of the information and data set out in this publication. Notwithstanding, BREE, its employees and advisers disclaim all liability, including liability for negligence, for any loss, damage, injury, expense or cost incurred by any person as a result of accessing, using or relying upon any of the information or data set out in this publication to the maximum extent permitted by law.

Acknowledgements

BREE gratefully acknowledges the contribution of BREE staff who have worked directly on the preparation of this publication, including Roger Rose, Nhu Che, Clare Stark and Kate Penney.

Stanwix, G, 2012, Major electricity generation projects, Bureau of Resources and Energy Economics, Canberra, November.

978-1-922106-47-6 Major Electricity Generation Projects 2012 (word)

Bureau of Resources and Energy Economics
Postal address: GPO Box 1564 Canberra ACT 2601
Phone: +61 2 6276 1000
Email:
Web: bree.gov.au

From 1 July 2011, responsibility for resources and energy data and research was transferred from ABARES to the Bureau of Resources and Energy Economics (BREE).

Foreword

The Bureau of Resources and Energy Economics (BREE) is a professionally independent, economic and statistical research unit within the Department of Resources, Energy and Tourism. Key mandates of BREE are to provide high-quality data, forecasts and research on resources and energy for Australia from an economic perspective.

Major Electricity Generation Projects is an annual publication of BREE that provides a list of major projects that covers all significant areas of electricity generation including renewable and non-renewable sources. The data in this authoritative and up-to-date publication comes from a wide variety of sources and provides a snapshot of the state of play in terms of advanced and less advanced stages of development. This publication is made possible by the valuable input from the companies involved in these development projects.

If you are interested in other publications or further information about BREE and its activities, please contact us at www.bree.gov.au.

Quentin Grafton
Executive Director/Chief Economist
Bureau of Resources and Energy Economics

Contents

Foreword 4

Data sources 6

Abbreviations and acronyms 6

Overview 7

BREE’s list of major electricity generation projects 7

Electricity generation and consumption 8

Recently completed projects 13

Advanced projects under development 15

Non-renewable electricity projects 16

Renewable electricity projects 17

Less advanced projects under development 19

Non-renewable electricity projects 19

Renewable electricity projects 20

Projects new to BREE’s list 20

References 21

Appendix 22

Figures

Figure 1: Australia’s net energy consumption, by industry, 2010-11 8

Figure 2: Australia’s electricity consumption, by state 9

Figure 3: Australian electricity generation, by energy source, 2010-11 9

Figure 4: Australian homes with an air-conditioner or evaporative cooler 10

Figure 5: Peak (maximum) daily electricity demand in the NEM above 30GW 11

Figure 6: Deviation of daily peak (maximum) demand from average demand compared to
population-weighted total (heating and cooling) degree-days in the NEM 12

Figure 7: Capacity of advanced projects, by state, October 2012 15

Figure 8: Capacity of advanced projects by energy source, October 2012 16

Figure 9: Capacity of advanced projects, October 2012 17

Figure 10: Projects added to list, year to October 2012 20

Tables

Table 1: Major electricity generation projects completed since October 2011 14

Table 2: Advanced projects, October 2012 15

Table 3: Number of less advanced projects, October 2012 19

Maps

Map 1: Advanced electricity generation projects, October 2012 18

An accessibility version of the report and the major projects list are located on the BREE website, bree.gov.au.

Data sources

The information contained in the BREE major projects list is obtained from project websites, company reports and/or media releases. Where possible, this information was verified with the project proponents. Other data sources such as the Australian Energy Market Operators’ (AEMO) Proposed Generation Project list and government websites were also consulted.

Energy and electricity related statistics are sourced from the Australian Energy Statistics, maintained and updated by BREE.

Abbreviations and acronyms

AEMO Australian Energy Market Operator

BREE Bureau of Resources and Energy Economics

C Construction

ESAA Electricity Suppliers Association of Australia

GWh Gigawatt hours

MW Megawatt

O Operating

TWh Terawatt hours

Overview

· As at the end of October 2012, there were 20 major electricity generation projects at an advanced stage of development with a total generating capacity of 3 017 megawatts (MW) and planned capital expenditure of around $6.5billion.

· The combined capacity of the advanced projects is equivalent to around 6percent of Australia’s existing generating capacity.

· There were a further 133 projects at a less advanced stage of development.

BREE’s list of major electricity generation projects

The list of major projects covers all significant areas of electricity generation, including black and brown coal, oil, natural gas, coal seam gas and renewable energy sources (solar, wind, hydro, biomass, geothermal and ocean). The information draws predominantly on publicly available sources and information provided directly by companies.

The BREE list provides details of each announced project where the expected capacity is more than 30 megawatts. By setting a threshold of 30 megawatts, a number of electricity generation projects are not represented on the list, including small-scale solar and biomass facilities. While small-scale electricity generation units have an important role to play in Australia’s electricity supply, it is not feasible to obtain a comprehensive list of all these projects.

In general, the included projects are at relatively advanced stages of planning; that is, they range from ‘planning approval underway’ through to ‘under construction’.

This major electricity generation projects list contains information on 170 projects, with the following details:

· project name

· location

· expected start-up date

· capital cost of the project in nominal terms

· proponent company or joint venture

· project status

· additional output capacity

· additional employment at the construction and operating stages, where available.

BREE’s list of major electricity development projects is in the appendix at the end of this report.
The list is also available in excel format on the BREE website, at bree.gov.au/publications/index.html

In the list, projects at more advanced stages of planning (those identified as ‘committed’ or ‘under construction’) are grouped together and listed first within each principal energy source. These projects appear in the blue-shaded areas of the list. Projects at less advanced planning stages (for example, those at ‘planning approval’ stage) follow within each energy source and appear in the yellow-shaded areas. The list includes new greenfield projects as well as the expansion of existing projects.

Electricity generation and consumption

Australia’s electricity generation sector is a major energy user that accounted for approximately 28 per cent of total energy consumption in 2010-11 (figure 1). Other sectors that accounted for a significant proportion of energy consumption were transport (25 per cent) and manufacturing (22 per cent).

Figure 1: Australia’s net energy consumption, by industry, 2010-11

Note: In the electricity generation industry energy consumption is based on energy used for conversion and distribution of electricity.

Source: Stark, C., Penney, K. and Feng, A. 2012, Table B

Electricity consumption increased at an average annual rate of 1 per cent in the decade ending 2010-11. Australia’s consumption of electricity was 253 terawatt hours in 2010-11. In 2010-11, around 75per cent of Australia’s electricity was consumed in New South Wales, Victoria and Queensland as a result of the relatively large population base in these states (figure2).

Figure 2: Australia’s electricity consumption, by state

Source: Stark, C., Penney, K. and Feng, A. 2012, Table I

As at June 2011, coal power stations represented 55 per cent of total electricity capacity installed in Australia (ESAA 2012). Output from coal power stations accounted for the bulk of Australia’s electricity, amounting to 68percent of total electricity generation in 2010‑11 (figure3). This reflects the low-cost of coal relative to other energy sources and the abundance of coal reserves along the east coast of Australia, where most electricity is generated and consumed. Gas-fired generation accounted for 19 per cent of total generation and renewable energy about 9 per cent.

Figure 3: Australian electricity generation, by energy source, 2010-11

Note: ‘Other’ includes oil, bioenergy and solar PV.

Source: Stark, C., Penney, K. and Feng, A. 2012, Table O

There are also potential opportunities for development of alternatives to coal-fired generation following changes to the competitiveness of existing generators in response to government policy. Adoption of less carbon-intensive non-renewable energy sources (particularly gas) as well as the development and application of renewable energy technologies may become much more economic into the future.

There are some potential constraints to the growth in base-load electricity generated from renewable energy sources. For instance, renewable energy systems typically have high operating costs and their operation is often only cost‑effective when wholesale electricity prices are relatively high. Further, some prospective renewable energy resources are located in remote areas, which are a considerable distance from existing transmission lines and consumption centres. The intermittent nature of many renewable energy sources can also present challenges for their integration in the electricity grid.

Box 1: Base-load versus peak-load generation?
Electricity grids are designed to handle variability in both demand and supply by using a fleet of generators with different economic characteristics and operational flexibilities. An optimised power system would have low operating cost and high fixed cost generators providing continuous “base-load” operation, and lower fixed and higher operating cost generators providing peaking duty.
Base-load operation implies the generator is dispatched at its full available capacity almost continuously. Peak-load operation implies the generator only operates for brief periods. “Mid-merit” or “Intermediate” is sometimes used to describe an operation halfway between. These are economic descriptions of operating functions rather than a physical characteristic of any plant.
Fluctuations in electricity demand are often associated with substantial diurnal variation. Variability in energy demand may also result from seasonal variation (heating for winter and cooling for summer), inter-regional climatic conditions and improved life style of households (measured in average occupied area per household or resident). Over the last decade there has also been a shift in the demand for energy reflecting rising household incomes and consequent increases in consumer durables as well as population growth.
Increased consumption of energy-using appliances since 2000 has contributed to the increasing incidence of maximum electricity demand which has placed substantial pressure on the network. The ownership and use of household appliances has increased with their use typically occurring during peak times (in most states this is on hot afternoons, although in New South Wales and Tasmania it also occurs in cold winter evenings). Seasonal patterns and weather conditions also affect the use of electricity‑using appliances and, hence, the frequency and magnitude of peaks in demand.
The increasing occurrence of maximum demand for electricity has been attributed to the growing penetration and ownership of air-conditioners (Topp and Kulys (2012)). Figure 4 illustrates the substantial growth since 2000 in ownership of air‑conditioners in the residential sector.
Figure 4: Australian homes with an air-conditioner or evaporative cooler

Source: Topp and Kulys (2012)
Peak demand is typically lower on weekends compared with weekdays, and is generally lower during milder seasons (spring and autumn) compared with the more extreme seasons (winter and summer). Figure 5 illustrates the peaks in daily demand from June 2004 to September 2012 for maximum demand above 30GW. While the average demand for electricity has not changed dramatically since June 2004, the magnitude of the peaks is generally getting larger.
Figure 5: Peak (maximum) daily electricity demand in the NEM above 30GW

Source: BREE; NEM Review Database
Figure 6 illustrates the deviation of peak (maximum) demand for electricity from average demand in the National Electricity Market (NEM) compared to population‑weighted total heating degree-days and cooling degree‑days.
‘Peakiness’ of maximum electricity demand is strongly associated with climatic conditions which were comparatively moderate in 2011-12 to 2008-09 to 2010-11. The comparatively extreme weather conditions in 2008-09 coincided with a large number of occurrences of peak demand. Weather conditions were comparatively moderate in 2011–12 compared with 2008–09 to 2010–11 which is reflected in the size of the peaks.
Figure 6: Deviation of daily peak (maximum) demand from average demand compared to population-weighted total (heating and cooling) degree-days in the NEM

Source: BREE; NEM Review Database; Bureau of Meteorology; Australian Bureau of Statistics

Recently completed projects

During the 12 months to October 2012, 9 electricity generation projects were completed (table 1). This compares with two completed in the year to October 2011 and 11 in the year to October 2010. A number of projects scheduled to be commissioned over the past year were delayed, owing to several factors including difficulties in negotiating fuel inputs to generation and in finalising financing arrangements. The completed projects in 2012 have a total generation capacity of 1546megawatts and a total capital cost of around $2.5 billion.