2011-12 Regional and Remote Electricity in Australia

Beyond the NEM
and the SWIS:

2011-12 regional and remote electricity in Australia

October 2013

BREE 2013, Beyond the NEM and the SWIS: 2011-12 regional and remote electricity in Australia, Canberra, October.

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ISSN 978-1-921516-14-6 (pdf)
ISSN 978-1-921516-15-3 (word)
ISSN 978-1-921516-16-0 (print)

This report was produced by Emma Richardson, Arif Syed and Allison Ball of the Modelling and Policy Integration Program of BREE. It is based on analysis undertaken by Guy Dundas (project leader), Guy Jakeman and Dr John Soderbaum from ACIL Allen Consulting in June 2013, commissioned by the Department of Industry. The guidance and assistance of the Project Steering Committee members are gratefully acknowledged: Quentin Grafton, Wayne Calder and Bruce Wilson of BREE; Rick Belt, Andrew Hirscher, Michael Tyquin of the Department of Industry; Damir Ivkovic, of ARENA; Russell Hay of Geoscience Australia.

Postal address:
Bureau of Resources and Energy Economics
GPO Box 1564
Canberra ACT 2601 Australia

Phone: +61 2 6243 7000
Email:
Web: www.bree.gov.au

Foreword

Demand for remote and off-grid power sources is thought to be growing, driven by the growth of industrial demand in regional Australia. Information on electricity demand and supply for the major Australian energy grid systems is readily available but relatively little is known about electricity in regional and off-grid areas. Increasingly decision makers in government and industry are seeking better quality data on the size, composition and location of Australia’s offgrid energy market.

This report seeks to bring together information and quantify a baseline of off-grid electricity demand and supply in Australia for 2011-12. It is based on a study by ACIL Allen Consulting, commissioned by the Department of Industry.

Around 6 per cent of electricity supply is sourced from beyond the two major electricity markets in Australia (the National Electricity Market and the South West Interconnected System). This electricity supports oil and gas production facilities, mining and mineral processing operations, regional and remote communities, as well as defence facilities, pastoral stations, tourism facilities and lighthouses. Some of this demand is met via smaller regional or mini electrical grids. In other cases standalone power stations or generators are used.

Electricity costs will remain high in these areas due to their remote location and the lack of existing infrastructure. Gas is the dominant source of power generation in these regions. With gas and liquid fuel prices projected to rise, there may be significant potential for renewable energy sources to play a role in meeting off-grid electricity demand in Australia in the future.

The Australian Renewable Energy Agency (ARENA) has recently launched programs aimed at developing the supply of renewable energy in regional areas. It is hoped that the information in this study will go some way to providing a more detailed picture of off-grid energy demand and supply in Australia, enabling further exploration of renewable energy project opportunities. It would also be desirable to repeat this analysis in future years, to provide trend information.

Bruce Wilson
Executive Director
Bureau of Resources and Energy Economics

Contents

Foreword 3

Abbreviations 6

Summary 7

1. Introduction 11

2. Estimation methodology 12

Electricity supply 12

Electricity demand 12

Choice of regions 14

3. Off-grid electricity demand and supply in Australia 16

Electricity demand 16

Electricity supply 17

Data coverage 23

4. Regional analysis 25

Western Australia 25

Northern Territory 28

Queensland 30

South Australia 33

Tasmania 35

Rest of Australia 37

5. Conclusions and future work 39

References 40

Appendix A: List of off-grid power stations, operational in 2011-12 41

Appendix B: List of Data Sources 56

BREE contacts 63

Figures

S1: Off-grid electricity use, by user category, 2011-12 8

S2: Off-grid electricity generation, by fuel, 2011-12 9

Figure 1: Off-grid electricity use, by user category, 2011-12 17

Figure 2: Off-grid electricity generation, by fuel, 2011-12 19

Figure 3: Off-grid electricity generation shares, by fuel, 2011-12 20

Maps

Map 1: Off-grid electricity generators, Australia, 2011-12 10

Map 2: Off-grid regions of Australia 14

Map 3: Off-grid and small grid electricity generation, Australia, 2011-12 21

Map 4: Australia’s natural gas basins and transmission pipelines 22

Map 5: Off-grid and small grid electricity generation, Western Australia region, 2011-12 25

Map 6: Off-grid and small grid electricity generation, Northern Territory region, 2011-12 28

Map 7: Off-grid and small grid electricity generation, Queensland region, 2011-12 31

Map 8: Off-grid and small grid electricity generation, South Australia region, 2011-12 34

Map 9: Off-grid and small grid electricity generation, Tasmanian region, 2011-12 36

Tables

Table 1: Summary of Australian off-grid electricity demand, by user category, 2011-12 16

Table 2: Australian off-grid electricity generation, by fuel, 2011-12 18

Table 3: Australian off-grid electricity generation shares, by region and fuel, 2011-12 18

Table 4: Off-grid Australia summary, percentage of supply by type of supplier, 2011-12 23

Table 5: Percentage of off-grid population with identified power supply, 2011-12 24

Table 6: Electricity demand, by user, NWIS Pilbara region, 2011-12 26

Table 7: Electricity generation, by fuel, NWIS Pilbara region, 2011-12 26

Table 8: Electricity demand, by user, rest of off-grid Western Australia region, 2011-12 27

Table 9: Electricity generation, by fuel, rest of off-grid Western Australia region, 2011-12 27

Table 10: Electricity demand, by user category, DKIS region, 2011-12 29

Table 11: Electricity generation, by fuel, DKIS region, 2011-12 29

Table 12: Electricity demand, by user, rest of off-grid Northern Territory region, 2011-12 30

Table 13: Electricity generation, by fuel, rest of off-grid Northern Territory, 2011-12 30

Table 14: Electricity demand, by user category, Mt Isa region, 2011-12 31

Table 15: Electricity generation, by fuel, Mt Isa region, 2011-12 32

Table 16: Electricity demand, by user, rest of off-grid Queensland region, 2011-12 32

Table 17: Electricity generation, by fuel, rest of off-grid Queensland region, 2011-12 33

Table 18: Electricity demand, by user, off-grid South Australia region, 2011-12 34

Table 19: Electricity generation, by fuel, off-grid South Australia region, 2011-12 35

Table 20: Electricity demand, by user, off-grid Tasmania region, 2011-12 36

Table 21: Electricity generation, by fuel, off-grid Tasmania region, 2011-12 37

Table 22: Electricity generation, by fuel, rest of off-grid Australia, 2011-12 37

Table A1: List of Western Australian Power Stations Identified 41

Table A2: List of Northern Territory Power Stations Identified 46

Table A3: List of Queensland Power Stations Identified 50

Table A4: List of Power Stations Identified - Other States and Territories 52

Abbreviations

ABS Australian Bureau of Statistics

AES Australian Energy Statistics

APPEA Australian Petroleum Production and Exploration Association

ARENA Australian Renewable Energy Agency

BREE Bureau of Resources and Energy Economics

DKIS Darwin Katherine Interconnected System

GWh Gigawatt hour

Kt CO2-e Kilotonnes of carbon dioxide equivalent

MWh Megawatt hour

NEM National Electricity Market

NGERs National Greenhouse and Energy Reporting scheme

NTPWC Northern Territory’s Power and Water Corporation

NWIS North West Interconnected System

Off-grid Not connected to the NEM or SWIS. This includes the major regional power grids in the Pilbara region of Western Australia (NWIS), around Darwin and Katherine in the Northern Territory (DKIS), and the Mount Isa region of north-western Queensland. Off-grid electricity also includes isolated sources of supply, ranging from large stand-alone generators supplying remote energy and resources projects to small residential communities. Areas supplied by the NEM and the SWIS are excluded.

SWIS South West Interconnected System

TJ Terajoules

Summary

The Department of Industry commissioned ACIL Allen Consulting to identify Australia’s total regional and off-grid electricity demand and supply. The Bureau of Resources and Energy Economics (BREE), Geoscience Australia and the Australian Renewable Energy Agency (ARENA) provided technical advice as part of the project steering committee.

Electricity demand and supply in Australia is reported for the major energy grid systems but relatively little is known about electricity in regional and remote areas. Throughout this study off-grid electricity will refer to electricity generated and consumed outside of the National Electricity Market (NEM) and the South West Interconnected System (SWIS), including the smaller grid systems of the Pilbara, Darwin to Katherine and Mt Isa areas.

There is a growing interest among the public and private sectors in the size and composition of Australia’s off-grid energy markets but there is a lack of detailed data available. An accurate assessment of the size and composition of the off-grid energy market would allow opportunities in the market to be identified and inform public policy, planning and private investment. This study identifies that the use of renewable energy resources is currently very low in the off-grid energy market, suggesting there is scope for greater use of renewable energy supply in these areas.

· In 2011-12 generation of off-grid electricity was 15 812 GWh, representing 6 per cent of Australia’s total electricity generation and supplying around 2 per cent of Australia’s population.

· The resources and energy sector accounted for 77 per cent, or 12 202 GWh of total off-grid electricity consumption in 2011-12 (figure S1).

· Residential, community and commercial electricity demand, associated with population centres, accounted for just 21 per cent of total off-grid electricity consumption in 2011-12.

· Generators of off-grid electricity are distributed from the north east of Queensland to the Pilbara in the west and from Darwin in the north to King Island in the south (map 1).

· Natural gas dominated the mix of off-grid electricity generation, accounting for approximately 78 per cent of total generation in 2011-12. This reflects the high proportion of resources and energy operations located in remote areas supplied by natural gas pipelines, such as the Pilbara and Mt Isa regions (figure S2).

· Renewable electricity generation accounted for 2 per cent of total off-grid electricity generation in 2011-12 including hydro, wind, solar and geothermal (figure S2). This penetration level compares to renewables accounting for almost 10 per cent of Australia’s total electricity generation in 2011-12 (BREE 2013b).

S1: Off-grid electricity use, by user category, 2011-12

Source: ACIL Allen Consulting 2013

S2: Off-grid electricity generation, by fuel, 2011-12

Source: ACIL Allen Consulting 2013

Map 1: Off-grid electricity generators, Australia, 2011-12

1. Introduction

The vast majority of Australia’s electricity demand and supply occurs in areas serviced by extensive, interconnected electricity generation infrastructure and transmission and distribution networks. This includes the NEM, which stretches from just north of Cairns to the Eyre Peninsula in South Australia and the main island of Tasmania, and Western Australia’s SWIS, which serves Perth, Geraldton, Albany and Kalgoorlie, amongst other locations.

There are also small but significant sources of electricity demand beyond the NEM and the SWIS. These include oil and gas production facilities, mining and mineral processing operations, regional and remote communities, as well as defence facilities, pastoral stations, tourism facilities and lighthouses. Some of this demand is met via smaller regional or mini electrical grids, in other cases standalone power stations or generators are used.

Given their remote location and the lack of existing infrastructure, it is likely that electricity costs are very high in some regional areas, particularly where the main source of electricity is trucked diesel. There may be significant potential for renewable electricity sources to play a role in meeting off-grid power demand.

Demand for remote and off-grid power sources is thought to be growing, driven by the growth of the resources industry in regional Australia. However, very little information is published on the size and composition of off-grid electricity demand and supply. Data on embedded and non-grid generation capacity is available but comprehensive data on the size of the off-grid market in Australia is not published.

The objective of this study is to bring together existing information on off-grid electricity, from a variety of sources, to provide a comprehensive snapshot of off-grid electricity sector demand and supply during 2011-12. Throughout this study off-grid electricity will refer to electricity generated and consumed outside of the NEM and the SWIS, and including the smaller grid systems of the Pilbara, Darwin and Katherine regions. Electricity demand and supply in areas connected by the NEM and the SWIS was excluded. The statistics and analysis in this report are based on a study by ACIL Allen Consulting, commissioned by the Department of Industry.
This study is a first attempt to comprehensively measure and analyse off-grid electricity demand and supply in Australia.