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Blog Post Monday 03 September 2018

How Australia's Energy Landscape Has Changed Over Time

How Australia's Energy Landscape Has Changed Over Time

Australia’s energy sector, as for many other countries, is an important aspect of the economy. Given this, how has Australia's energy landscape shifted from the early years to the present? We look at some of the top historical trends and milestones in Australia's energy landscape.

Early energy use

Electricity was in use in the 19th century in Australia, and the first supply to the general public occurred in the small towns of Tamworth and Young, both in New South Wales, in 1898 and 1899 respectively. The electricity was used to light streets, and then to connect shops, offices, and homes.

By 1906 there were 46 electrical light and power stations with a total capacity of 23,000 kW. Tasmania became the first to use transmitted supply in 1916, followed by Victoria in 1924. By 1950 New South Wales had a widespread transmission network.

With industrialisation and advances in generation, transmission, and distribution, our energy landscape achieved major shifts. From the post-war years, our uses for energy grew steadily as energy became widely available. As we grew wealthier as a population, we bought more appliances and household items that were powered by energy.

Energy in Australia in the 21st century

Australians are high users of energy relative to the rest of the world, and we have a reliable, sophisticated energy system from generation to distribution. We continue to rely heavily on fossil fuels, but renewables are increasing.

1. Consumption

Energy consumption in Australia increased steadily up until 2009. For five years after 2009 consumption on the east coast of Australia dropped by 7% even though the economy grew by 13%. The driving factors for the drop included energy efficiency programs, consumer response to higher prices, rooftop solar systems, and other factors.

In the 2014/15 financial year, consumption across the country rebounded thanks to coal use for power generation. At the same time, energy use in manufacturing continued to fall, as did energy use in mining.

2. Energy generation and trade

Around 63% of our electricity is produced from coal and 14% from renewable sources. In our shifting energy landscape, our energy production capacity grows at around 4% a year.

Oil is our largest energy source at around 38%, natural gas accounts for 24% of our energy consumed and renewables 6%.

Australia exports around two thirds of the energy we generate, and coal and gas exports continue to grow. At the same time, we rely heavily on oil imports, with 85% of our refinery feedstock and 45% of refined production consumption sourced via imports.

3. The National Electricity Market

From the simple distribution frameworks of the early years, Australia's national generation and distribution system has become a sophisticated one with regulatory bodies and rules and a major interconnected power system known as the National Electricity Market (NEM). With our vast land mass, our physical networks have to cover enormous distances and be effective in cities as well as in the country.

Australia's south-eastern electricity grid is one of the most connected electricity grids in the world, with around 800,000 kms of poles and wires. The nation is also home to a vast gas pipeline system that spans 90,000 kms.

The NEM arguably sits at the centre of our energy landscape. It includes Queensland, New South Wales, the Australian Capital Territory, Victoria, Tasmania, and South Australia. Western Australia and the Northern Territory are not part of the NEM as they have their own systems and regulatory frameworks. The NEM supports the process of power being generated, used, and traded on a wholesale basis across the states and territories. It accounts for around 80% of Australia's total electricity consumption and sees around $16.6 billion traded each year.

4. The future

As trends like changes in power generation, new technologies, and changing consumer needs continue to shift Australia's energy landscape, the NEM is likely to undergo reforms itself. The industry is seeking to shift to low-emission power generation, so there may be major changes for the NEM ahead. Currently the government is reviewing the future security of the NEM, with affordability, sustainability, and reliability as some of the key priorities. Greater efficiency, more renewables, and reliability of systems with variable generation are other top priorities.

Electricity and gas are an integral part of our daily lives and it's easy to forget how challenging life might have been in the earliest years of Australia's energy industry. As Aussies grew in prosperity and began living more energy-intensive lifestyles, our energy landscape reflected and drove this trend. Today we have a sophisticated energy network that is more than capable of meeting our needs, but challenges remain when it comes to using more renewable energy, affordability, and reliability.

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