New South Wales - The State Infrastructure Strategy 2012 – 2032A few extracts.
Note coal exports planned to surge.
Climate change takes back seat to New South Wales government's budget reliance on coal royalties? See comment below on falling global price for thermal coal.
|Infrastructure NSW - Coal Exports to More than Double|
Peak demandWhile energy demand is declining, peak demand has grown at nearly two percent per annum. The ‘gap’ between average energy and peak demand drives the price up further as more infrastructure is needed for less time.
Nationally, it is estimated that over $11 billion of infrastructure is used for less than one percent of the time.
Infrastructure NSW has concluded that there are insufficient incentives on electricity network businesses to manage peak demand and there is evidence that:
- forecasts of demand (for capital planning) are conservative and do not take into account the potential of demand management, including price elasticities
- high level analysis of data on energy flows are not used to any extent in capital planning
- automation and active configuration and balancing of electricity supply systems are not used to avoid capital expenditure. This has contributed to the high level of electricity distribution investment and consequent high prices.
- The NSW Government has $30 billion invested in electricity infrastructure (in State Owned Corporations (SOC)). This is $26 billion in network businesses and $4 billion in generation businesses. The electricity sector accounts for 27 percent of past capital and 28 percent of all the Government’s future capital program.
- The electricity sector has invested an average of $2 billion a year for the past decade. The capital plans of the businesses are to double this to an average of $4 billion a year for the next decade to 2021.
Prices and demandThe NSW economy has traditionally benefited from the competitive advantage of low priced energy based upon abundant reserves of coal. This long term competitive advantage has all but disappeared over the last 5 to 10 years.
The era of low cost energy is over. High levels of investment in electricity networks and the proliferation of primarily Federal Government renewable energy schemes have caused the average electricity retail bill to double over the past eight years for NSW residential customers, from around $800 to near $1,600 per annum.
NSW prices have also grown faster than prices in other States, ... [in fact - faster than EVERY State except South Australia, so the proliferation of primarily Federal Government renewable energy schemes cannot be as significant as this NSW report suggests].
This is shown in Figure 11.2 below.
|Figure 11.2 Average Electricity Retail Prices 2001-11|