Coal Lobby Steers Australia’s Electricity Generation Policies

Credit: Creative Commons/Peripitus

Credit: Creative Commons/Peripitus

Australia is still largely dependent on non-renewable sources, mainly coal and natural gas for its electricity generation. According to the Australian Bureau of Statistics’ official release, coal, and natural gas accounted for 88% of Australian electricity generation in the fiscal year 2014-15. Out of this coal maintains its major share at 64.9% just 0.4% lower than the year 2012. Gas produced in Queensland is increasingly being exported through the large LNG terminals at Gladstone and these LNG plants are boosting electricity demand there, the irony is, the increased power demand is being fulfilled by local black coal-fired power generation plants. Renewable power generation produced 12% a mere 2.5% increase in last three years.

In spite of being a developed country, Australia lacks behind a lot on the global scale of reduction in coal-fired power generation. International Energy Agency (IEA) in its survey has found that the coal accounted for less than 40% of global electricity generation whereas Australia is still at 65%. Its energy policy is subjected to the regulatory and fiscal influence of all three levels of Governments, viz. Federal, State, and Local. Although only the State and Federal governments determine policy for industries such as coal. Even in 2016, Federal energy policy continues to support the coal mining and natural gas industries through subsidies for fossil fuel use as it contributes greatly to earnings of foreign exchange and government revenues. Recently Federal policy was reverted to a pro-coal economy, cutting the targets and subsidies to alternate and renewable energy.

Although only the State and Federal governments determine policy for industries such as coal. Even in 2016, Federal energy policy continues to support the coal mining and natural gas industries through subsidies for fossil fuel use as it contributes greatly to earnings of foreign exchange and government revenues. Recently Federal policy was reverted to a pro-coal economy, cutting the targets and subsidies to alternate and renewable energy.
Australia is the world’s fourth-largest coal producer. In the year 2000, the country was declared as ‘the highest emitter of greenhouse gases per capita in the developed world’. And this was only due to its high reliance on coal for power generation. Even today it’s energy usage and the coal industry both put together contribute to approximately 38% of the country’s total greenhouse gas emissions.

In South Australia, in 2nd week of July, when the wholesale electricity prices reached $1400 per megawatt hour, nearly 40 times than the prices paid by the businesses in the eastern states, the South Australian government forced to reopen the inactive gas plant so as to keep the major businesses running. This spike in price rise has again raised an issue of shutting down coal-fired power plants in favour of renewable sources!

Now Australian government is trying to boost renewable energy sector with policy announcements such as ‘national mandatory renewable energy target’. The national target is to achieve 20% of electricity from renewable sources by the year 2020.

This entry was posted in Investing in Electricity, Sources of Electricity and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *