Electricity emissions soar since Coalition dumps carbon price

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(Image via abc.net.au)

RenewEconomy's Giles Parkinson discusses Australia's rapidly rising electricity emissions following the Coalition's axing of the carbon price and in direct contradiction to the Paris climate agreement.

AUSTRALIA'S ELECTRICITY emissions continue to rise and are now 5.5 per cent higher than they were before the carbon price was dumped, putting Australia against the global trend which is seeing energy emissions flat-lining even as the global economy expands.

Pitt & Sherry analyst Hugh Saddler says in his latest monthly survey that total emissions from electricity generation in the National Electricity Market (NEM) – all but Western Australia and the Northern Territory – increased again in the year to March 2016.

Annual emissions were 5.5 per cent higher than in the year to June 2014, when the Coalition killed the carbon price introduced by the Labor Government, to much acclaim from the government.

This startling jump in emissions comes despite the fact that Australia has signed up to the Paris climate agreement, which seeks to limit global warming to 2°C, and if possible 1.5°C. Energy emissions, according to the International Energy Agencyhave flatlined for the past two years.

The rise in emissions also comes amid rising global CO2 levels, soaring temperatures, and the most serious coral bleaching event ever witnessed in the Great Barrier Reef.

Saddler blames the rise in emissions on a number of factors. One is the removal of the carbon price, which paved the way for more burning of coal, black coal in particular.

Another is the rise in coal generation in Queensland to support the exports of liquefied natural gas — which will contribute an extra 8 million tonnes of CO2 equivalent a year.

A third is the increase in demand, driven largely by natural gas (LNG) requirements in Queensland but also rebounds in peak demand in other states, particularly in response to the unusually hot summer worsened by the “El Niño” effect, which has exacerbated the rise in global temperatures.

Saddler writes:

'There can be little doubt that the period of falling demand for electricity across Australia has now ended. In the year to March 2016, total NEM annual demand increased for the thirteenth successive month.'

Saddler says brown coal generation actually fell, but this was largely to do with the loss of the interconnector to Tasmania. This is expected to be quickly reversed when the cable is fixed, possibly in June, because Tasmania’s hydro levels are now down to record lows, and it has not invested enough in other renewable energy generation to compensate for this.

In the year to March 2016, black coal generation supplied 53.1 per cent of NEM electricity and brown coal supplied 23 per cent. The total coal generation was 76.1 per cent, compared with a minimum of 72.3 per cent in the year to July 2014, the last year of the carbon price.

Gas supplied 10.7 per cent of NEM electricity in the year to March 2016, the lowest share since July 2010. Hydro generation increased slightly in all three states with major hydro capacity.

Saddler said wind generation fell slightly, probably because of the unusually hot, still weather across southern Australia throughout the first two weeks of March. Saddler noted,

'A year has now passed since a new wind farm came on-line in the NEM, the longest such period for over a decade.' 

Indeed, the only new wind farm to come on-line has been the small Coonooer wind farm in Victoria, courtesy of the ACT Government’s reverse auction program. All other investment has come to a halt because of the Coalition’s fiddling with the renewable energy target.

Three new solar farms were added thanks to a grants program that the Coalition has announced it will now cease. These included the Nyngan, Broken Hill and Moree solar farms, all in NSW, with combined total capacity of 212MW.

Saddler wrote in his repor:

'Being so new, they are as yet making only a small contribution to total annual generation. In the month of March, however, their output equalled 0.7 per cent of total NSW NEM generation, 2.2 per cent of total NEM renewable generation and 0.2 per cent of total NEM generation.' 

Total renewable generation in the year to March 2016 was 13.2 per cent of NEM generation, the highest level for several decades, outside the period affected by the carbon price.


While the Coalition has dumped the grants mechanisms to renewable energy projects, so it can “protect” taxpayers’ money, it continues to use taxpayer funds to make handouts to polluters to reduce emissions under the Emissions Reduction Fund.

The ERF will be supported by something called the “safeguard mechanism”, which is supposedly designed to ensure that while emissions are cut in one sector that they do not rise in another.

However, under details released on Wednesday, polluters, including those in the electricity sector, will be allowed to emit as much as they have at any point in the five year period from 2009-2014 without penalty.

The Government says in a preview of its legislation:

A baseline will apply across the electricity sector, with individual baselines to apply in the event that the sectoral-baseline is exceeded. The sectoral baseline will be set at the high point of sectoral emissions over the period 2009-10 to 2013-14.

Individual baselines will also be set at each facility’s highest annual emissions between 2009-10 and 2013-14. Generators will have access to the same emissions management options as facilities in other sectors, as well as similar baseline adjustments to accommodate economic growth.

This article was originally published in RenewEconomy on 6 April 2016 under the title 'Australia’s electricity emissions jump 5.5% since Coalition dumps carbon price' and has been republished with permission. You can follow Giles on Twitter @GilesParkinson.

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