Gas-use for power generation down 13%, big jump in wind power

27 May 2012

Lower electricity demand and strong growth in wind power culminated in gas-use for east coast power generation falling by 13.0% in the March quarter, according to a leading industry report card released today.

“Clean energy policies were expected to lead to a boom in gas-use but so far the opposite seems to be happening,” EnergyQuest Chief Executive Dr Graeme Bethune said today.

The report – by energy economics group, EnergyQuest – reveals electricity generated from natural gas fell to 5,677 gigawatt hours (GWh) in the March quarter 2012, down from 6,404 GWh in the March quarter 2011, a fall of 727 GWh[1]. This led to a 5.9 petajoule (PJ), 3.8% fall in east coast gas consumption.

Gas-use for power generation increased in Queensland and Tasmania but was lower in the other eastern states.

“The Darling Downs and Braemar gas-fired power stations in Queensland were the only ones to buck the downward trend to any significant extent.”

East coast generation down but wind and solar up

Total east coast grid power generation fell by 1,689 GWh, with the decline also reflected in lower coal-fired generation (down 598 GWh) and lower hydro generation (down 578 GWh).

Wind power however grew by 24% (300 GWh). In the March quarter wind contributed 3.1% of east coast generation, with the highest generation in South Australia of 942 GWh, 31% of the State’s grid generation.

“In South Australia wind appears to be the new baseload.”

One of the factors driving down grid power generation is the growth in home photovoltaic power (Solar PV) systems. EnergyQuest estimates that Solar PV generated 476 GWh on the east coast in the March quarter, 0.9% of east coast generation, with the biggest contribution being 139 GWh in NSW, where Solar PV was 0.9% of generation. The highest percentage contribution was 3.5% in South Australia.

Lower wholesale power prices but higher retail prices

Lower demand for grid power and the growth of wind and solar pushed wholesale electricity prices down 30%-60% to $25-30/MWh in all eastern states except Tasmania.

However, retail electricity prices, as measured by the Consumer Price Index, increased in all eastern capital cities during the quarter, ranging from a 5.4% increase in Melbourne to 17.9% in Adelaide.

“The cost of renewable energy alternatives such as wind and solar contributes to the increase in retail prices while they push down wholesale prices.”

The electricity data that forms the basis for this analysis can be downloaded below.

Other oil and gas developments

  • Gross Australian LNG production fell by 9.5% to 4.5 million tonnes (Mt) in the quarter due to redevelopment work and cyclonic activity that affected North West Shelf (NWS) production. However when Woodside’s Pluto project  is in full production, Australia will rival Indonesia and Malaysia, the world’s second and third largest LNG producers.
  • Domestic gas production increased by a meagre 0.9% to 247.3 PJ. West coast production rose by 1.4% but east coast production was flat at 156 PJ.
  • Oil production continued to slide, falling by 3.5% to 21.0 million barrels (MMbbl). Lower production from the Pyrenees oil field in the Carnarvon Basin was the biggest contributor to lower production.
  • Total Australian petroleum production (oil, gas and natural gas liquids) fell by 4.5% to 111.1 million barrels of oil equivalent (MMboe), reflecting lower gas and oil production.
  • BHP Billiton was the largest petroleum producer for the quarter. However its production fell by 16.3%. Santos was one of the few companies to show a significant increase in production.

Contact us if you would like a sample copy of the quarterly report. Further details are available at:

[1] Unless stated otherwise, all comparisons in this release are the March Quarter 2012 compared with the March Quarter 2011.

Downloads: Electricity Data March 2012
Wind's increasing role in power generation

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