The carbon emissions intensity of the National Electricity Market (NEM) looks set to continue to fall in 2018 for the third year in a row. Figure 1 shows the average emissions intensity for each calendar year from 2012 to present.
Emissions intensity is a measure of how many tonnes of carbon dioxide equivalents (tCO2-e) are emitted for each megawatt hour (MWh) of electricity that is sent out to the grid. The data in Figure 1 has been compiled from publications by the Australian Energy Market Operator.
Note that this data looks at the emissions intensity of the grid. It does not include rooftop solar as it is treated as negative demand rather generation. Note also that from 1 June 2014 onward, AEMO changed the methodology for calculating emissions data from estimated to actual data. We have adjusted the pre-June 2014 data to reflect the change in methodology as per AEMO’s impact assessment.
Figure 1 shows that the emissions intensity of the grid started to increase in 2014 and 2015. This coincides with the repeal of the carbon tax in July 2014 by the Abbott Government. The decreasing trend from 2016 is due to a combination of growing renewable energy and the closure of coal-fired power stations.
Figure 2 shows the emissions intensity by state. We can see that the steepest reductions have come from South Australia (43% down from 2012) and Victoria (17% down from 2012). These are also the states which have experienced coal closures.
Firstly, Northern Power Station (520 MW black coal) in Port Augusta, SA, was permanently closed in May 2016. This was the last coal-fired power station in South Australia. Secondly, Hazelwood Power Station (1600 MW brown coal) in Victoria, closed at the end of March 2017. Hazelwood was not only Australia’s dirtiest power station, but also one of the most polluting in the entire OECD.
NSW is in the middle of the pack at number 3, having reduced its emissions intensity by 9% since 2012. Tasmania has always had a very low emissions intensity due to the majority of the state’s generation coming from hydro power. Queensland has gone up slightly.
Figure 3 shows the annual electricity that was generated from wind and large scale solar for each state. We have compiled this data using NemSight, a software developed by Creative Analytics (part of the Energy One group).
The generation from large scale wind and solar in the NEM has more than doubled since 2012, from 6350 to 14400 GWh. In terms of percentage of total NEM wide generation, this is an increase from 3.4% to 8.6%.
We can see from Figure 3 that NSW has added the most variable renewable generation from 2012 to now. South Australia is second and Victoria third. In contrast, Queensland has been very late to the large scale renewables party. Though, as noted in our previous article, QLD has recently emerged as the national leader in both small and large scale solar.
Liddell (2000 MW black coal) in NSW will be the next power station to retire in 2022. We can expect to see a significant dip in the emissions intensity of NSW as well as the entire NEM when this happens. However, unlike the owners of Hazelwood, AGL has provided ample notice to enable an orderly transition.
October 2017 marked the 6th consecutive month where the emissions intensity of the National Electricity Market (NEM) was below the average level during the carbon tax. Emissions intensity is a measure of how many tonnes of carbon dioxide equivalents (tCO2-e) are emitted for each megawatt hour (MWh) of electricity that is produced. Figure 1 shows the average monthly emissions intensity of the NEM from June 2011 to October 2017. The data has been compiled from AEMO publications*.
The carbon tax was in force in Australia from 1 July 2012 to 30 June 2014. It started at a price of $23/tonne in FY 2012-13 and increased to $24.15/tonne in FY 2013-14 before being repealed by the Abbott Government.
The carbon tax had a significant impact on curbing carbon in the electricity sector. The average emissions intensity of the NEM during the carbon tax period was 7% lower than the average in the 12 months prior to its implementation (0.87 tCO2-e/MWh, down from 0.93 tCO2-e/MWh). Unfortunately, emissions crept back up to almost pre-carbon tax levels after the carbon tax was repealed.
Electricity generation from renewable sources in the NEM has grown by over 50% from approximately 25,000 GWh in 2011 to 39,000 GWh in 2016**. As a percentage of total generation, this represents an increase from 12% to 18%. This growth has been an important factor in helping to control emissions in the NEM. However, it is the exit of major coal fired power stations that has resulted in the very sharp decreases in carbon intensity that we see in Figure 1. Firstly, Northern, a 520 MW black coal power station in Port Augusta, SA, was permanently closed in May 2016. This was the last coal fired power station in South Australia. Secondly, Hazelwood, a 1,600 MW brown coal power station in Victoria, closed at the end of March 2017. Hazelwood was not only Australia’s dirtiest power station, but also one of the worst in the OECD.
Despite the closure of Hazelwood, Victoria still has the highest emissions intensity in the NEM. Figure 2 shows the carbon emissions profile for each state, in terms of both intensity and absolute figures, over the last six months. The renewable heavy states of South Australia and Tasmania lead the NEM on both emissions measures.
It is evident that the closure of coal-fired power stations will be a critical step in decarbonising Australia’s electricity sector. A stable policy framework will be essential in fostering an orderly and efficient transition.
*From 1 June 2014 onward, AEMO changed the methodology for calculating emissions data from estimated to actual data (from NGER). We have adjusted the pre-June 2014 data to reflect the change in methodology as per AEMO’s impact assessment.
**Australian Energy Statistics published by the Department of Energy and Environment.