Tasmania feels the power pinch

Weekend Australian
Saturday 8/11/2008 Page: 3

IT'S not easy being green even if you have been in the renewable energy business for almost a century when you have to contend with the weather. The drought, considered the worst in Australia for 100 years, would have had a dire effect on the country's greenest state, Tasmania, if it were not for a fortuitously built link to the mainland, ironically to the country's highest greenhouse gas emitting power system.

Three years of low rainfall have severely tested the state's government-owned Hydro-Electric Corporation, which trades as Hydro Tasmania. Chairman David Crean, noting that the generator's dam storage levels had fallen below 20 per cent for the first time in 40 years, acknowledges that it is the controversial Basslink high voltage transmission line across Bass Strait that has enabled his business to "keep on the lights" and sustain employment in Tasmania's energy-intensive manufacturing industry.

In 2007 Tasmania imported more than 1,900GWh of electricity across Basslink, built by Britain's National Grid Company for $780 million and recently sold to Singapore's CitySpring Infrastructure Management for more than $1.2 billion, a significant amount in a state where annual consumption sits just under 10,000GWh. Only 618GWh flowed north last year.

Without Basslink, a development which the Greens and others opposed bitterly, "Tasmania would have faced the prospect of winter power restrictions with inevitable negative impact on the economy," chief executive Vince Hawkesworth says. Rescue has come at a substantial cost. Hydro Tasmania spent more than $100 million in 2007-08 buying power from Victoria and gas to run a small power plant at Bell Bay in the state's north.

Hydro development, says David Crean, has been crucial to Tasmania's development in the 20th century, with the corporation building up its water-driven generation resource to 50 dams and 29 power stations providing a capacity of 2615MW and an asset value of $3.4 billion before the hydro construction period came to an end in the 1990s in a nation-rocking controversy over the eventually-banned Franklin River project.

Today more than 80 per cent of Hydro Tasmania's water storage is in two dams the Great Lake, Australia's largest natural freshwater lake in the Midlands, and Lake Gordon in the south-west wilderness area.

Hydro Tasmania is by far the largest contributor to Australia's existing renewable energy generation producing more than 8000GWh a year compared with less than 4000GWh annually from the Snowy system out of a national total of almost 14,000GWh. All the hydro power together, however, adds up to barely 6 per cent of Australia's electricity supply.

Existing hydro-electric schemes are specifically excluded from the mandatory renewable energy target scheme, but the new MRET provides Hydro Tasmania with opportunities to upgrade and augment its generation and to build wind farms. The corporation is investigating adding 1000GWh annual capacity to its system at a cost of $400 million "under the right market conditions."