Wind lifts on coal's decline

Demand for electricity supplied by NEM generators continued the steady fall in September, which has now been continuing for two years.

By the end of September, all business electricity consumers would have received two monthly bills at the higher price, including the cost of greenhouse emissions. Most household consumers would have received one bill with a substantial proportion of consumption at the higher price. If consumers respond to clear evidence of higher prices, then we should expect to see further reductions in (seasonally adjusted) consumption over the next few months.

There were several noteworthy developments on the supply side. In Victoria, all four units at Yallourn W were back on-line for the first time since June, but the average capacity factor for the whole station for September was only 53 per cent. At Loy Yang A, one unit was off-line for the whole month. Overall, brown coal generation fell to its lowest monthly level since December 2001 and the average capacity factor for all brown coal generators for the month was only 67 per cent. Also in Victoria, the Macarthur wind farm came on-line for the first time. Output was very small, but when complete, at 420 MW, it will be Australia's largest wind farm.

In NSW, all four units at Eraring came back on-line at their upgraded capacity for the first time. One unit at Bayswater was off-line for the whole month. Total output from black coal generators fell to the lowest monthly level since December 2010 and the average capacity factor for the month was only 57 per cent. Even so, net imports from both Victoria and Queensland also fell. Average capacity factor of coal power stations for the whole year was 63 per cent.

In Queensland coal-fired generation (annualised) has remained roughly constant for the past year, during which time the capacity factor for all coal power stations together has averaged only 55 per cent. This was achieved with the help of exports to NSW, which totalled 10 per cent of electricity supplied within the state by NEM generators over the past year. No wonder the most recent Statement of Opportunities by AEMO, released in late August, concluded that Queensland would require no new generating capacity until 2020.

In South Australia, the only significant coal-fired power station, Northern, came back on-line during the month, rather earlier than had been expected when it went off-line in early July. However, it supplied only 6 per cent of state demand, compared with 65 per cent from gas, 28 per cent from wind and net zero from interconnectors. For the year, wind supplied 26 per cent, local coal 18 per cent, gas 49 per cent and the interconnector from Victoria 7 per cent in net terms. Over the year, the data make it clear that local coal competes mainly with (brown coal) imports from Victoria via the interconnector.