It’s official: Australia needs no new coal or gas baseload by Giles Parkinson

Since pretty much the start of the National Electricity Market more than a decade ago, the Australian power industry has regarded the annual Electricity Statement of Opportunities (ESOO) as their bible to help pinpoint where a new coal or gas-fired generator might be needed to meet rising demand.

Given the recent revisions to the demand outlook, the list of opportunities for the coming year was expected to be small. It turns out there are basically none. This would come as no surprise to the industry, which as been foreshadowing such a scenario since the start of the year, and it makes it pretty much official: There is no need for any new fossil fuel generation over the next decade, and wind farms will dominate Australia’s new build in the years to come.

The 2012 ESOO released today by the Australian Energy Market Operator suggests that under its “medium scenario,” the date that individual states might need new baseload generation has been pushed out by between three and seven years. No state will face an energy deficit until 2018/19, when Victoria might require 115MW, while South Australia might need just 24MW in 2019/20, and Queensland 79MW by 2020/21.

Under its low scenario, which incorporates factors like increased distributed generation and low growth in demand – a scenario that many expect given the response to rising electricity prices and the anticipated growth of demand management and energy efficiency measures – the only state with a looming deficit any time in the next decade is Victoria, which might need an extra 54MW by 2021/22.

As the table below illustrates, this is in sharp contrast to the 2011 predictions, when its medium scenario projected that 341 MW would be needed in Queensland in 2013-14 and AEMO forecast deficits in 2018-19 of over 150MW in every region except Tasmania. Just two years ago, a deficit of more than 770MW was predicted for Queensland by 2013/14, a situation which prompted TRUenergy to announce plans for 1,500MW of gas generation. Those plans are indefinitely on hold.