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![Page 1: Victorian Energy Overview June 2010. Victoria – Unique Energy Market Large Reserves of Brown Coal – 500 years No Black Coal Offshore Natural Gas ~ 25.](https://reader035.fdocuments.us/reader035/viewer/2022062621/551bcdc6550346b9588b52bb/html5/thumbnails/1.jpg)
Victorian Energy Overview
June 2010
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Victoria – Unique Energy Market
• Large Reserves of Brown Coal – 500 years
• No Black Coal
• Offshore Natural Gas ~ 25 years
• Good wind resources
• Privatised Energy Market
• Many Assets Owned by International companies
New Investments, wind, gas peaker, coal & solar
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VENCorp SP AusNet Australian Energy Market Commission /
Australian Energy Regulator
Loy Yang A Hazelwood Yallourn Loy Yang B Southern Hydro
Snowy Mountains Scheme
Interstate and other
Generators
Powercor Jemena Citipower United Energy
SP AusNet
Consumers of electricity have been able to choose
their own electricity retailer since 13/1/2002.
Ecogen
AGL
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Regulated / Non-regulated Pricing
• GENERATORS – Many – Less than 10– Prices NOT regulated, can make or lose lots of money
• TRANSMISSION – One only – Monopoly– Regulated, about a 6.8% Real Rate of Return (RROR)
• DISTRIBUTION – Five– Regulated, about a 6.8% Real Rate of Return (RROR)
• RETAILERS – Many – about 14 at present– Prices monitored, but NOT regulated, can make or lose lots
of money
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Electricity and gas transmission
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500 kV330 kV275 kV220 kV
Red Cliffs
Kerang
Horsham
Portland
Bendigo
Ballarat
WodongaShepparton
Glenrowan
Hazelwood/Morwell
Mount Beauty
Loy YangTerang
Dederang
Yallourn
DartmouthMcKay Creek/West Kiewa
Eildon
Anglesea
MooraboolGeelong
Pt. Henry
Victorian Electrical Network
Summer Peak ~10,300 MW Winter Peak ~7,500 MW
Major Generation
Major Load
Interconnection with Snowy/NSW
1900 MW from Snowy
Interconnection With SA300 MW from SA
Interconnection with Tas
MurrayLink
+/- 220 MW
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Electricity generating capacity in Victoria
Wind
Biomass
Solar
Hydro
Natural Gas
Brown Coal
Renewables
Total Electricity Generating Capacity 10,000 MW
Total Renewable Generating Capacity 1,000 MW
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Technology Cost of Power
-100
-50
0
50
100
150
200
Brown Coal Black Coal ClosedCycle Gas
Open CycleGas
Wind Geothermal Nuclear Solar
$ p
er M
Wh CCS
CPRS
REC
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Principal Power StationsPower Station Company MW Units Type Year
Loy Yang A Great Energy Alliance CoTokyo Electric
2100 525 x 4 Steam/Coal 1984/87
Hazelwood International Power – UK 1600 200x8 Steam/Coal 1964/71
Yallourn ‘W’ Yallourn Energy - CLP 1450 350x2
375x2
Steam/Coal 1973/75
1981/82
Loy Yang B International Power, Mitsui 1000 500x2 Steam/Coal 1993/96
Morwell Energy Brix 170 20x1
30x3
60x1
Steam/Coal
Steam/Coal
Steam/Coal
1958
1958/59
1962
Newport Ecogen Energy 510 500x1 Steam/Gas 1980
Jeeralang Ecogen Energy 468 57x4
80x3
Gas Turbine 1979
Latrobe Valley International Power, Mitsui 300 50x5 Gas Turbine 2002
Somerton AGL 150 150x1 Gas Turbine 2002
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Wholesale Price Variation
http://www.nemmco.com.au/mms/GRAPHS/INDEX.HTM
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Regulatory SystemAustralian Energy Market Operator (AEMO)
The ‘manager’ of the market
http://www.aemo.com.au
Australian Energy Regulator (AER)
The ‘regulator’, guidelines and price determination
http://www.aer.gov.au
Australian Energy market Commission (AEMC)
The ‘rule maker’
http://www.aemc.gov.au
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http://www.aer.gov.au/content/index.phtml/tag/AERMarketSnapshot/
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Average annual wholesale prices (March ’10) - $/MWh
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Victorian Wholesale Power Prices - In NOMINAL $/MWh
0
10
20
30
40
50
60
Years
NO
MIN
AL
$/M
Wh
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Energy Support Programs
Commonwealth Government
• $1.6B renewable energy funds, including the $1.5B Solar Flagships
• $2.4B clean coal fund
• $50 million geothermal drilling program fund
• 45,000GWh of renewable energy certificates (eRET)
Victoria State Government
• $110m ETIS2 funds for CCS demonstration
• $72m ETIS2 funds for renewables demonstration
• $100m large scale solar power station
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Renewable Energy Target (RET)
• Commonwealth Program / Policy
• Changes in March 2010– Yet to be legislated
• Split into large scale (wind) and small scale (solar etc,.)
• Large scale 41,000 GWh (~4500MW) by 2020– Market to set the price
• Small scale unlimited, set price of $40/MWh– To be reviewed in 2014
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CPRS -5% Permit Price
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CPRS -5% Permit Price
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Planning Issues• Victorian Parliamentary review underway
• Need to plan well ahead
• Grid connections can take three years
• Some planning aspects two years
• Wind is particularly slow
• Flora/Fauna studies can be seasonal, requiring 12 months– Orange bellied parrots, legless lizards, growling frogs
• Parallel planning (environment / building planning / finance)– Fastest but is costly if projects don’t proceed
• Wind planning 100% (>2,000MW) over subscribed
• But is the policy there to give you certainty?
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Victorian Wind AtlasLand reserved under the National Parks Act (1975)Angahook – Otway Investigation
66 kV electricity network220 kV electricity network330 kV electricity network500 kV electricity networkTerminal station
Substation
Operating wind farm
Win
d S
peed
(m
etr
es/s
econ
d)
8
7
6
5
4
Win
d S
peed
(m
etr
es/s
econ
d)
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Wind Projects Status
http://new.dpi.vic.gov.au/energy/projects-research-and-development/wind-projects
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Offshore Wind
• Victoria’s coastal waters are deep compared to countries with installed offshore wind energy
• With current technologies, offshore wind energy is not commercially viable in Victoria
> 300
m
0 – 40
m
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Wave Energy
• Victoria has excellent wave resources, particularly along the Western coast
Mean Average Wave Energy(kW per metre)
20 to 5010 to 20
0 to 10
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• Victoria - 2005 Biofuels’ Action Plan– $5m biofuels infrastructure fund
• Mandates in NSW, Manildra, not in Vic’ review in 2010
• Food vs Fuel, vs beer, wine, meat– http://en.wikipedia.org/wiki/Fuel_vs_food
– If move beer crops to food…….
– Energy cost in a packet of corn flakes, high fuel prices give more impact
– US President: Only 85% of cost increase fuel related (2008)
– 70% of USA crops for meat
• Australian input limits
• Need 2nd generation, cellulosic, straws, pasture grasses etc,.– Commonwealth - $12m, over three years…..
• Water and conditions tolerable opportunities– We have a lot of marginal land that could be used, (and improved)
Biofuels
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Biofuels
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Geothermal
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Feed in Tariffs (FiT)• Victorian legislation 1:1 Nett FiT for up to 100kW of renewables
– Solar or wind or hydro– Liable party is the retailer– Cost passed through to all customers
• Victorian Premiuim Nett FiT for up to 5kW of solar. Solar specific.
– Liable party is the distributor, cost passed through to all customers
• No Gross FiT, considered too expensive– NSW just announced a Gross PFiT up to 10kW, $500m
• No national consistency– Introduced state by state
• No energy efficiency FiT, for example for high efficiency combined heat and power
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VEET – Energy Saver Incentive (ESI)
• Electricity and Gas retailers are liable– Add a small amount to all bills
• Three year phases, starting 1 Jan 2009
• 2.7MT CO2e per year (Vic’ total 110MT/y)
• Domestic only
• Six prescribed activities so far, more can be added
– Water heating, Space heating, Space conditioning (insulation, thermally efficient windows and weather sealing products), Lighting, Shower roses, Refrigerators/freezers
• Who pays?– All customers
http://www.esc.vic.gov.au/public/VEET/
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Energy Resource Efficiency Program (EREP)
Mother of EREP was Industry Greenhouse Program (IGP)
• At the end of 2007, IGP had delivered:– Cuts of 1.23 MTCO2e/year
– Savings to business of $38.2 million each year
– Average payback period was 20 months
EREP
• 100 TJ of energy and/or 120 ML of water
• 250 liable companies in Victoria. They use 700 petajoules of energy and 300 gigalitres of water a year.
• 45% of Victoria's energy use, annual water consumption of around 1.5 million average Victorian households.
• Is this enough for energy efficiency?– Not sure, would like to look at the 2nd tier energy users
http://www.epa.vic.gov.au/bus/erep
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Web Links• Sustainability Victoria
• http://www.sustainability.vic.gov.au/www/html/1517-home-page.asp
• Department of Primary Industries
• www.dpi.vic.gov.au
• http://www.dpi.vic.gov.au/dpi/dpinenergy.nsf/Home+Page/Energy~Home+Page?open
• Department of Sustainability and Environment
• www.dse.vic.gov.au
• Department of Premier and Cabinet
• www.dpc.vic.gov.au