Australian government looks to overhaul power sector

Australia Graphic

A sweeping energy policy endorsed by Australian Prime Minister Malcom Turnbull earlier this week could position hydropower as a key asset in the federal government’s plan to overhaul the country’s power sector.

Turnbull accepted the plan, called the National Energy Guarantee, on the recommendation of the Energy Security Board to address what the government is calling the “energy trilemma.”

The three prongs of the trilemma will address affordability, reliability and emissions, with consumer rates in Australia doubling over the past decade; blackouts hitting South Australia and New South Wales in 2016 and 2017, respectively; and a desire to further ween the country from coal-burning assets.

“What we have today is a game changer,” the Prime Minister said in a recorded statement. “This is a national energy guarantee that will ensure that we have affordable power that is reliable. We keep the lights on and we can afford to keep them on, and that we meet our international commitments under the Paris Agreement.”

Breaking it all down
The Australian government has yet to release its plan in full, but the guarantee would essentially require utilities to ensure the instant availability of baseload power from low-emissions forms of generation.

Though details are still forthcoming, a release from Australia’s Department of the Environment and Energy offers some clues as to what the guarantee might ultimately look like in the way it tackles each piece of the energy trilemma.

Affordability — With the consumer costs of power rising a cumulative 6.5 billion Australian dollars ($5.11 billion) since 2008, the government said the plan has “tackled power bills from every angle” through “better regulated markets, more transparency and more competition.”

This will manifest itself in the form of secured agreements from utilities and gas importers; the abolishment of Australia’s Limited Merits Review; an emphasis on improving energy efficiency and productivity; and a one-time cash payment of up to AU$125 for families to help offset rising bills, amongst other measures.

Reliability — While Australia’s solar and wind sectors have helped the country drop its emissions per capita and GDP to their lowest point in nearly three decades, their intermittency have created supply issues in some regions.

It seems Australia is largely looking toward gas to help shore up the reliability, with a number of new mechanisms proposed to safeguard both gas prices and supply.

Emissions — In addition to implementing greenhouse gas-reducing recommendations made in an August report from Chief Scientist Alan Finkel, the Australian government has committed to meeting Paris Agreement goals via a 26-28% reduction in CO2 emissions from 2005 levels by 2030.

Emissions from generating assets currently represent about 35% of the country’s overall emissions, according to the government, though efforts to decrease them are already under way.

These are being funded in large part by organizations including the Clean Energy Finance Corp., Australian Renewable Energy Association (ARENA) and Emissions Reduction Fund, with guidance from the National Energy Productivity Plan.

What’s in it for hydro?
While a 2,000 MW expansion of the Snowy Mountains pumped storage project has been an important part of Turnbull’s power plan since it was unveiled earlier this year, the proposal — called Snowy 2.0 — takes center stage in tne National Energy Guarantee.

And though Snowy 2.0 would satisfy the government’s demand for low-carbon, on-demand baseload power with what Australia says would be the largest “battery” in the Southern Hemisphere, a number of other pumped storage hydro projects could also soon be contributing to Australia’s grids.

Notable amongst these are 13 plants proposed for Tasmania that would have a cumulative capacity of 1,500 MW; a 225 MW plant in South Australia that would use seawater; and a 250 MW plant in Queensland that would repurpose the Kidston mine.

Previous articleNIB financing helps NTE develop three hydropower projects in Norway
Next articleFERC issues policy on licensing terms for hydroelectric projects located at non-federal dams
Michael Harris formerly was Editor for

No posts to display