Antinuclear

Falling demand for electricity hits Energy Australia

Falling Energy Demand Impacts One Of Australia’s Biggest Utilities Clean Technica 5 Mar 14, EnergyAustralia, one of the big three utilities in the country, has slumped to a loss of $350 million for calendar 2013 after slashing the value of its Yallourn brown coal generator, as well as some of its gas-fired generation assets.

The write-down came as the company, owned by Hong Kong based CLP Holdings, returned a profit of just $18 million (down from $236 million in 2012) for the year from its portfolio of coal and gas generation and its large retail customer base – a result it blamed mostly on an “unprecedented” fall in demand, and the popularity of solar PV.

EnergyAustralia also chose to write off about $300 million from the value of its ageing Yallourn brown coal generator in Victoria. This was part of a total write-down of $445 million, which even included an $85 million gain from what it called the “bargain basement” purchase of the Mt Piper and Wallerawang coal-fired power stations from the NSW Government.

The results put in context the implacable opposition that EnergyAustralia has to the renewable energy target, which it wants halted in its tracks in the current review commissioned by the Abbott government.

And it also highlights the dilemma that the industry, and for that matter the government, finds itself in over soaring gas prices, which are making the gas-fired generators of EnergyAustralia, Origin Energy, AGL Energy and others, such as Stanwell Corp, uneconomic to run because they are priced out of the market. Their ability to compete is made worse by the Abbott government’s decision to try to dump the carbon price.

It also explains why CLP chose to defer, indefinitely, its intended stock market float of EnergyAustralia.

EnergyAustralia says the fall in wholesale electricity prices has been caused, perversely, by higher electricity prices for customers, mostly due to network costs, which is encouraging those consumers to put on more solar panels, and embrace energy efficiency. Those high prices are also contributing to the decisions of some energy-intensive industries to leave Australia. While network costs are moderating, more price rises can be expected because of the gas boom. Gas still supplies around 10 per cent of local generation, and often sets the marginal cost of generation.

The issue of over-supply and falling demand is one of the principal arguments that EnergyAustralia and others are using to argue for either scrapping or diluting the RET. Even AGL Energy, previously the strongest supporter of renewables among the big utilities, is backing away from supporting the current fixed target following its own proposed bargain basement purchase of two NSW coal-fired generators (Bayswater and Liddell).

Mostly, though, these positions are about protecting the short-term interests of ageing generators that these companies have been able to buy on the cheap and want to extract maximum value from. They do not reflect some of the fundamental changes that are occurring in the industry, particularly the changes in consumer behaviour that the utilities now recognise themselves…….http://cleantechnica.com/2014/03/04/falling-energy-demand-impacts-one-australias-biggest-utilities/

March 7, 2014 - Posted by Christina Macpherson | Uncategorized