Solar does NSW a power of good

Sydney Morning Herald
31 August 2011, Page: 8


THE boom in solar panel installations coupled with higher electricity prices and energy efficiency measures has pushed back the likely need for new baseload electricity generation capacity in NSW until near the end of the decade. The need for more baseload power, which operates 24 hours a day, has been steadily pushed back for several years now. When trying to sell the power industry, the then premier Morris Iemma said a power supply shortfall would occur by 2013-14.

In the annual Statement of Opportunities issued by the Australian Energy Market Operator (AEMO) today, that need has been pushed back to 2018-19, a further two-year delay since last year's forecast. A factor in the extended delay has been the 500 to 600 MWs of solar panel capacity that is being installed following the state government's generous feed-in tariff subsidy, which has now been curtailed.

Also, higher electricity prices, energy efficiency programs and the slowdown in demand due to the global financial crisis and, more recently, the decline in manufacturing, have hit electricity demand forecasts for NSW. It is a different picture in the other mainland states in the national electricity market, where demand growth is feeding through to the need for new generation capacity.

In Queensland, buoyant demand from the resources sector, with new coalmine developments coupled with liquefied natural gas export projects will mean the state needs new power stations the soonest. (Western Australia and the Northern Territory are not connected to the electricity grid linking the eastern states.) Queensland will need new base-load capacity of an estimated 341 MWs by 2013-14, although if growth is slower it could be 2015-16.

In Victoria and South Australia, AEMO has brought forward by 12 months to 2014-15 the need for new generation capacity. NSW has more than 3820 MWs of gas-fired electricity capacity being planned, with a further 6660 MWs of wind power, according to AEMO. "The [national electricity! market is still growing at 1000 MWs per annum, roughly", AEMO's managing director, Matt Zema, said. "We still need investment in generation in all the regions".

Mr Zema said the forecasts were done before details of the $23 a tonne carbon tax came out, but included a $10 to $12 carbon price. "The [proposed carbon price) doesn't have a big impact in the first five years of the [forecast]", he said, since any closure of generation capacity that may follow would not be until the second half of the decade. "The demand forecasts,.. are really driven off the back of the global financial crisis,.. the weather events we've had. "We're starting to see some energy efficiencies, with people saying "be a bit more careful, more wise' about how they use electricity".