Positive unintended consequences – grid carbon intensity improves
Every now and then we get a positive rather than a negative unintended consequence, this one I like, a lot.
Our electricity demand has been falling in recent years, a not so pleasant consequence of the GFC in manufacturing closing in Australia but also a positive consequence of the GFC is that it has created a more frugal use of electricity.
So what impact has this had on our grid carbon intensity and what could it mean for the future?
Reduced electricity use has reduced are grid carbon intensity
Since December 2008 our electricity demand has dropped by 4%, since 2006 our electricity has dropped by 2%.
AND, this is awesome, the grid carbon emissions have dropped by 14% since 2008 and 10% since 2006.
A 14% improvement in grid carbon intensity in the last 4 years – wow, thats awesome. So how did it happen!
First up there has been a drop in the amount of electricity generated by coal fired power stations.
Most notable reduction has been in NSW with the closing of some coal fired plants, but more recently a drop off in both Victoria and South Australia. A shortall in supply in NSW being met by Victoria and Queensland up until 4 months ago, there has been a modest increase in NSW coal fired electricity.
The largest contributor of the difference between the modest 2% electricity reduction and the larger 10% reduction in emissions is the increase in production of electricity from gas.
We have seen a modest increase in wind and hydro, with some saying that the carbon tax has helped the financial viability of Tasmanian Hydro.
What could it mean for the future?
This is where the unintended positive impact comes in. The total wind power production is now up to 3.8% of annual electricity consumption – the original target was 2% from all renewables, not 3.8% from wind!
So one possible future is that the power companies, lobby the government to say that we have already met our renewable energy targets so we shouldn’t have to do anymore than we have already!
Yes thats one possible future but when you look at the cost and risk of adding power generation to meet a fluctuating demand the old models might not work.
The other possible future is that the financial viability of renewable energy becomes a better option than creating new gas or coal fired power stations. We have seen reports that this is happening already – “Wind farms can now generate electricity at $80 per megawatt-hour, compared with $143 for a new coal power station and $116 for a new baseload gas power station.” Even if Abbot gets in and abolishes the carbon tax wind will still be cheaper!
Our electricity demand growth has reversed in the last 6 years, the certainty or uncertainty that this will continue or whether we will see electricity demand grown again is not known.
In an uncertain future, bringing in technology that takes 20-30 years from decision to add power generation from a large power station to actually generating electricity is a very large risk. Adding smaller distributed energy supply from wind, solar and other renewables presents a much lower risk option.