Electricity
Generation
Major
Projects
October 2013
George Stanwix
© Commonwealth of Australia 2013
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BREE 2013, Electricity generation major projects, Bureau of Resources and Energy Economics, Canberra, October.
ISSN (PDF) 978-1-921516-17-7
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Acknowledgements
The author would like to express his appreciation for the assistance and support provided by Wayne Calder, Ross
Lambie and colleagues from the Bureau of Resources and Energy Economics, Ben Skinner from the Australian
Energy Market Operator, Jonathon Milne from the Australian Energy Regulator, Greg Ruthven from the
Independent Market Operator of Western Australia, Michael Reid from the Western Australian Department of
Finance, and the companies involved in the development projects listed in this report.
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Foreword
This annual BREE publication, previously known as Major Electricity Generation Projects, provides an update of
major projects that covers all significant areas of electricity generation including renewable and non -renewable
sources. A separate publication, Mining Industry Major Projects, records the investment pipeline from exploration
through to completed projects in the resources and energy sector in Australia.
The data in this publication comes from a wide variety of sources and provides a summary of major electricity
generation projects under consideration or development across Australia. This publication is made possible by the
valuable input from the companies involved in these development projects.
Electricity Generation Major Projects covers the period since October 2012 to August 2013 and features several
improvements and provides more detailed information on the investment ‘pipeline’ than in the past. Previously
projects were reported in only two categories (‘advanced’ and ‘less advanced’), but are now grouped into four
stages: (1) Publicly Announced; (2) Feasibility Stage; (3) Committed; and (4) Completed. The additional categories
help to track where a project is at from first announcement through planning and approvals to final investment
decision and eventual completion.
Projects at the Committed Stage of development have received a final investment decision (FID) and have either
started, or are about to start, construction. As of August 2013, there are 22 known projects in the committed
category with a total planned capacity of 2 689 megawatts and an estimated capital expenditure of $5.6 billion.
Renewable energy generation accounts for around 78 per cent of these projects in capacity terms. To put this in
perspective, and to show the scale of the pipeline, the total additional committed generation capacity is equivalent
to 5 per cent of existing installed capacity in Australia.
If you are interested in other publications or further information about BREE and its activities, please contact us at
www.bree.gov.au
Bruce Wilson
Executive Director
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Contents
Acknowledgements
3
Foreword
4
Abbreviations and acronyms
7
Executive summary
8
1 Profile of electricity generation in Australia
Consumption
Generation
Investment trends
Investment outlook
12
12
12
16
16
2 Background to the Electricity Generation Major Projects Report
Project classification
19
19
3 Projects at the Publicly Announced Stage
Overview
Analysis of projects at the Publicly Announced Stage
21
21
21
4 Projects at the Feasibility Stage
Overview
Analysis of projects at the Feasibility Stage
23
23
23
5 Projects at the Committed Stage
Overview
Analysis of projects at the Committed Stage
Analysis of projects at the Committed Stage by region
25
25
26
30
6 Projects at the Completed Stage
Overview
Analysis of projects progressing to the Completed Stage
32
32
33
7 Outlook for investment in generation capacity
Overview
33
33
References
34
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Figures
Figure 1: Investment pipeline for new capacity generation in Australia, by fuel type and by
year of expected start up
8
Figure 2: Number and nominal value of projects at the Committed Stage
9
Figure 3: Additional capacity and average nominal cost of projects at the Committed Stage
10
Figure 4: Australia’s electricity consumption, by region
12
Figure 5: Installed generation capacity installed in Australia, by fuel type, share o f total (%)
13
Figure 6: Australia’s total electricity generation, by fuel type
14
Figure 7: Principal generation plant installed, by fuel type and by State and Territory
15
Figure 8: Annual investment in registered capacity, by fuel type
17
Figure 9: Growth in installed generating capacity in the NEM region and demand for
electricity (Index 1999–00=100)
18
Figure 10: The stages of the investment pipeline
20
Figure 11: Share of additional capacity of projects by energy source and by location –
Publicly Announced Stage–as at September 2013
21
Figure 12: Share of additional capacity of projects by energy source and by location –Committed Stage–as at
September 2013
27
Figure 13: Pipeline of investment in Australia’s electricity generation sector
29
Tables
Table 1: Summary of projects in the investment pipeline
Table 2: Major electricity projects–Publically Announced Stage–as at September 2013
Table 3: Major electricity projects–Feasibility Stage–as at September 2013
Table 4: Major electricity projects–Committed Stage–as at September 2013*
Table 5: Major electricity projects–Committed Stage–as at September 2013 *
Table 6: Regional investment pipeline
Table 7: Major electricity projects–Completed Stage–as at September 2013
11
22
24
25
26
28
32
Maps
Map 1: Electricity generation projects—Committed Stage—September 2013
29
An accessibility version of the report and the major projects list are located on the BREE website, bree.gov.au.
Electricity Generation Major Projects
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Abbreviations and acronyms
ACCC
Australian Competition and Consumer Commission
AEMO
Australian Energy Market Operator
AES
Australian Energy Statistics
BREE
Bureau of Resources and Energy Economics
esaa
Energy Supply Association of Australia
FID
Final Investment Decision
IMOWA
Independent Market Operator of Western Australia
NEM
National Electricity Market
NWIS
North-West Interconnected System
SWIS
South-West Interconnected System
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Executive summary
The investment climate for electricity generation projects has changed substantially in the period following the release
of BREE’s Major Electricity Generation Projects report in November 2012. Falling electricity demand since 2010–11
has resulted in a capacity overhang in the market, and led to a general softening of investment in new electricity
generation projects, particularly for non-renewable projects.
Annual energy demand forecasts have been revised down in the last three consecutive years. Electricity demand
forecasts for 2013 project an annual average growth rate of 1.3 per cent from 2012–13 to 2022–23 in the National
Electricity Market, which is lower compared to 1.7 per cent forecast in 2012 and 2.3 per cent forecast in 2011 for the
10-year outlook period (AEMO 2013b; AMEO 2012).
Responses received while compiling this report highlight how industry concerns over potential asset stranding of coalfired generation projects, the prospect of sustained high gas prices and the effect of renewable energy policies are
impacting on market conditions for investing in non-renewable electricity generation projects. In contrast, renewable
energy continues to increase its share of electricity generation largely due to the introduction of policies targeting
development of renewable generation, with the Renewable Energy Target (RET) increasingly driving decisions of
choice of fuel for additions to generation capacity.
This release of the Electricity Generation Major Projects report covers the period from October 2012 to August 2013
and provides a comprehensive list of potential and planned electricity generation projects.
In this report, the listed projects are categorised based on the stage of the development cycle as reported by
companies. The classification includes four categories: the Publicly Announced stage, Feasibility Stage, Committed
Stage and Completed Stage. Details of the projects are summarised in Table 1 using the four categories and are
reported by the major fuel types used in generation.
While the overall outlook for investment in electricity generation for the remainder of the decade remains subdued,
there is a need to maintain a robust pipeline of projects that can move forward should conditions change. In this
regard Australia remains well-placed with a balanced portfolio of potential new capacity, including:




Thirty-seven projects at the Publicly Announced Stage that have a combined disclosed value of $7.9 billion and
6 246 megawatts of planned capacity;
One hundred projects at the Feasibility Stage that have a combined disclosed value of $42.8 billion and 33 129
megawatts of planned capacity;
Twenty-two projects at the Committed Stage worth $5.6 billion with 2 689 megawatts of planned capacity; and
Four projects at the Completed Stage worth $2.2 billion with 883 megawatts of planned additional capacity.
In total, there are 163 projects in the investment pipeline with a combined disclosed value of $58.5 billion and 42
947 megawatts of planned capacity (see Figure 1).
Figure 1: Investment pipeline for new capacity generation in Australia, by fuel type and by year of expected start up
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Notes: * As at August 2013; Projects with undisclosed timelines are presented as post 2018.
Investment in coal-fired generation continues to slow, with total planned capacity in additional coal -fired projects
amounting to 2 926 megawatts or 7 per cent of the capacity of new projects in the investment pipeline. Gas-fired
generation projects represent the largest share of investment in the non -renewable energy mix and 35 per cent of
total additional planned capacity.
Renewable energy projects constitute 48 per cent of total proposed new capacity in the investment pipeline and 58
per cent of total capital expenditure. Wind powered generation projects represent the greatest share of planned
capacity for renewable projects accounting for 42 per cent of total planned capacity and 53 per cent of the value of
proposed electricity generation projects in the investment pipeline.
Over the past year one coal-fired generation project (240 megawatts) was commissioned while three new large
scale wind energy projects (643 megawatts) were completed.
Projects at the Committed Stage of development have the greatest potential to receive Final Investment Decision
(FID) and proceed to construction. At this point renewable energy generation projects make up the majority of
committed projects (2 101 megawatts) with gas making up the remainder (588 megawatts). There are no committed
coal-fired power proposals.
Although the number of projects at the Committed Stage increased between October 2012 and August 2013, the
total nominal value of these projects is lower in August 2013 compared to October 2012 (Figures 2 and 3). The
difference is largely due to a number of larger scale
coal-fired and gas-fired generation projects which were curtailed during the year. An additional 3 346 megawatts of
capacity has been delayed or reconsidered, including 1 215 megawatts of wind powered, solar, and gas - and coalfired capacity in Queensland, 750 megawatts of gas-fired capacity in New South Wales, 500 megawatts of gas-fired
capacity in Victoria, as well as proposals for 770 megawatts of gas- and coal-fired capacity in Western Australia.
Figure 2: Number and nominal value of projects at the Committed Stage
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Figure 3: Additional capacity and average nominal cost of projects at the Committed Stage
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Table 1: Summary of projects in the investment pipeline
Publicly Announced *
Feasibility Stage **
Committed Stage ***
Completed Stage
Total
energy source
No.
capacity
MW
Value
$m
No.
capacity
MW
Value
$m
No.
capacity
MW
Value
$m
No.
capacity
MW
Value
$m
No.
capacity
MW
Value
$m
non-renewable
9
2 530
2 640
29
18 764
19 865
4
588
1 217
1
240
600
43
22 122
24 322
Oil
0
0
0
1
150
110
0
0
0
0
0
0
1
150
110
Gas
9
2 530
2 640
20
11 928
9 755
4
588
1 217
0
0
0
33
15 046
13 612
Brown coal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Brown coal
gasification
0
0
0
1
600
1 100
0
0
0
0
0
0
1
600
1 100
Black coal
0
0
0
5
2 086
5 100
0
0
0
1
240
600
6
2 326
5 700
To be determined
0
0
0
2
4 000
3 800
0
0
0
0
0
0
2
4 000
3 800
renewable
28
3 716
5 227
71
14 365
22 959
18
2 101
4 350
3
643
1 600
120
20 825
34 136
Wind
23
3 086
4 697
55
12 359
20 889
14
1 867
3 775
3
643
1 600
95
17 955
30 961
Hydro
0
0
0
1
37
na
1
na
na
0
0
0
2
37
na
Solar
3
294
530
10
646
1 420
3
194
555
0
0
0
16
1 134
2 505
Biomass
0
0
0
1
83
500
0
0
0
0
0
0
1
83
500
Geothermal
0
0
0
3
790
150
0
0
0
0
0
0
3
790
150
Ocean
2
336
na
1
450
na
0
0
0
0
0
0
3
786
na
37
6 246
7 867
100
33 129
42 824
22
2 689
5 567
4
883
2 200
163
42 947
58 458
Total
Notes: * capital expenditure data for project costs is undisclosed for 18 of the 37 projects at the Publically Announced Stage;
** capital expenditure data for project costs is undisclosed for 25 of the 100 projects at the Feasibility Stage;
*** capital expenditure data for project costs is undisclosed for three of the 22 projects at the Committed Stage;
na not available.
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1 Profile of electricity generation in
Australia
Consumption
In 2011–12, Australian consumption of electricity was 254 851 gigawatt hours (GWh), an increase of 0.5 per cent
compared to 2010-11. Electricity consumption increased at an average annual rate of 1.1 per cent in the decade
ending 2011–12 (BREE 2013).
Figure 4 illustrates the proportion of electricity consumption by jurisdic tion in Australia. New South Wales, Victoria
and Queensland account for around three-quarters of total electricity consumption due to the large population and
industrial base in these states.
Figure 4: Australia’s electricity consumption, by region
Notes: a Includes ACT.
Source: BREE 2013, AES Table I.
However the overall statistics, which include the growth in off-grid consumption by the mining sector, masks a
recent and important pattern of falling demand in the National Electricity Market (NEM). The Australian Energy
Market Operator has reported that electricity demand across the NEM fell by 4.7 per cent from 2009–10 to 2012–13.
Forecasts for annual electricity demand growth for the 10-year outlook period have also been revised down to
1.3 per cent from 2012–13 to 2022–23, compared to 1.7 per cent forecast in 2012 and 2.3 per cent forecast in 2011
(AEMO 2013b; AMEO 2012). Key drivers for a return to demand growth include the three large LNG projects
coming online from 2013–14, increased demand from industrial loads and overall population growth.
Electricity consumption in Western Australia increased by 30 per cent from 2007–08 to 2010–11. However,
electricity demand in Western Australia subsequently declined by 2.4 per cent in 2011 –12, compared to 2010–11
(BREE 2013). Average annual growth forecasts of electricity consumption have also been revised down from the
forecast of 2.1 per cent in 2012 to 1.9 per cent in 2013 for projected growth to 2023 –24 (IMOWA 2013).
Generation
Australia has over the past decade acquired a more diverse generation mix with strong growth in gas-fired and
renewable energy generation.
Electricity dispatched to the market reflects demand requirements for baseload and peak (or maximum) demand.
Different generation technologies may be grouped by their capability of responding to variations in demand and fuel
type: baseload, peaking or maximum demand, intermediate and intermittent generation. In general, baseload
generation technologies have been fuelled by non-renewables—coal and gas—as well as hydroelectricity. In
Electricity Generation Major Projects
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contrast, new renewable technologies in the form of wind and solar provide intermittent generation which can be
used to meet both baseload and peak needs at different times of day (when available).
Figure 5 shows that as at June 2012, coal-fired power stations represented 54 per cent of total electricity capacity
installed in Australia (esaa 2013). However, due to their higher utilisation factor, coal -fired power stations contribute
the majority of output to the Australian electricity market, amounting to 69 per cent of total electricity generation in
2011–12 (Figure 6). This share has declined from 77 per cent in 2001–02 due to the stronger growth in gas and
renewable power plants.
Figure 5: Installed generation capacity installed in Australia, by fuel type, share of to tal (%)
Source: BREE; esaa
Gas-fired power stations represented 26 per cent of total electricity capacity installed in Australia in 2011 –12 (esaa
2013). The share of gas-fired generation in total Australian electricity generation has increased from 14 per cent in
2001–02 to 19 per cent in 2011–12 (BREE 2013).
The share of renewables in Australian electricity generation increased at an annual avera ge growth rate of 2 per
Electricity Generation Major Projects
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cent from 2001–02 to 2011–12 with most of the growth in new wind and solar PV capacity. New wind powered
capacity has grown, on average, by 36 per cent a year from 2006–07 to 2011–12, compared to 10 per cent annual
growth in gas-fired generation over the period (BREE 2013).
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Figure 6: Australia’s total electricity generation, by fuel type
Notes: Other category includes: Oil products; Multi-fuel fired power plants; Bioenergy; Biogas; and Solar PV.
Source: BREE 2013, AES Table O.
The composition of installed capacity differs markedly across jurisdictions (Figure 7). Queensland, New South
Wales and Victoria rely more heavily on coal-fired generation compared to other regions. Whereas, hydroelectricity
forms the majority of installed capacity in Tasmania. Gas-fired generation capacity is more prevalent than other fuel
choices for installed capacity in South Australia, Western Australia and the Northern Territory. Changes in fuel
choice for new capacity have been strongly influenced by government policy.
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Figure 7: Principal generation plant installed, by fuel type and by State and Territory
Notes: Data are gross estimates that do not account for decommissioned plants.
Source: BREE; esaa.
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Investment trends
The annual investment profile in registered capacity in the Australian electricity market since 1999 –00 differs
markedly between States and Territories as shown in Figure 8.
At the commencement of the NEM in 1998–99, high wholesale spot prices fuelled investment in gas-fired generation
particularly in South Australia and Queensland. Capacity additions combined with easing spot prices after 2000 lead
to a slower rate of capacity expansion during 2002–03 to 2003–04. The mix of investment has diversified since 2004–
05 with a broader range of alterntives to coal-fired electricity generation technologies being deployed, particularly wind
generation. More recent increases in gas-fired generation reflect the impact of the Queensland gas target and the
need for additional capacity to meeting growing peak demand.
Investment outlook
Decisions to add generation capacity and the choice of fuel for new capacity depend on a number of factors: fuel
input prices, prospective growth in electricity demand, wholesale prices, the need to replace or r efurbish ageing
plant, and the long-run marginal cost of different generation technologies. Increasingly, environmental costs and
government policy reform, such as the renewable energy target are also influencing investment decisions and fuel
choice for additions to generation capacity.
The 2013 Annual Electricity Statement of Opportunities report by the Australian Market Energy Operator concluded
that all regions in the NEM (except Queensland) are likely to have adequate generation capacity to meet market
conditions over the remainder of the decade. Queensland may begin to incur a small low reserve deficit by 2019 –20.
Reasons for this outlook include the growth in household PV installations, lower -than-expected load growth in most
industrial sectors, the impact of energy efficiency measures and customer responses to higher electricity prices.
In the NEM, growth in electricity generation capacity has generally been in parallel to growth in end-use electricity
demand. Figure 9 shows two indexes summarising relative incremental changes in installed generating capacity
and electricity demand in the NEM. This shows that from 1999–00 to 2003–04, the capacity and demand indexes
tracked relatively closely. However, starting in 2004–05 the indexes diverge following the drop off in investment in
new capacity from 2003–04 to 2004–05. However, the unexpected plateauing and subsequent fall in demand
around 2009–10 has resulted in some excess capacity in the NEM.
The lower expectations for growth in electricity consumption, along with the impact of policies such as the
Renewable Energy Target and an increased uptake in small scale distributed generation (household PV), are
setting the investment outlook for large scale non-renewable electricity generators over the remainder of the
decade.
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Figure 8: Annual investment in registered capacity, by fuel type
Notes: Q = Queensland; N = New South Wales; V = Victoria; S = South Australia; T= Tasmania; W = Western Australia; NT = Northern Territory;
The timing of the reported investment in additional capacity reflects the time of registration rather than when the plant was commissioned or
operating at full capacity. In the NEM region, market capacity data is either 1) summer rating for scheduled/semi-scheduled generators, or 2)
registered capacity for all non-scheduled generating units.
Source: BREE; ACCC; IMOWA; Power and Water.
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Figure 9: Growth in installed generating capacity in the NEM region and demand for electricity (Index 1999 –
00=100)
Source: BREE; esaa; Global Roam, NEM Review database.
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2 Background to the Electricity
Generation Major Projects Report
To better reflect the multiple stages of the investment pipeline, BREE has implemented a series of improvements to
what is now called the Electricity Generation Major Projects report. Modifications have been made to key concepts
that underpin the report, its analytical framework and the way in which data is presented in the associated list of
major projects. All project data and analyses that were provided in previous reports are still available.
The scope of the Electricity Generation Major Projects report remains unchanged. Namely, the focus is on
electricity generation investment and reporting on additions to Australia’s installed capacity. The list of major
projects covers all significant areas of electricity generation, including black and brown coal, o il, natural gas, coal
seam gas and renewable energy sources (solar, wind, hydro, biomass, geothermal and ocean). The information
draws predominantly on publicly available sources and information provided directly by companies.
The BREE list provides details of each announced project where the expected capacity is more than 30 megawatts.
Electricity power plants of 30 megawatts or more are defined as major projects for the purposes of this report. This
threshold is consistent with the requirement in the National Electricity Rules for plants to be scheduled to the
National Electricity Market.
By setting a threshold of 30 megawatts, a number of electricity generation projects are not represented on the list,
including small-scale solar and biomass facilities. While small-scale electricity generation units have an important
role to play in Australia’s electricity supply, it is not feasible to obtain a comprehensive list of all these projects.
This major electricity generation projects list contains information on 163 projects, with the following details:











project name
proponent company or joint venture
state
location
type—expansion or new project
estimated start up
project status—publicly announced; feasibility stage; committed; or completed
additional new capacity
fuel type
capital cost of the project in nominal terms
additional employment at the construction and operating stages, where available.
Project classification
The major improvement to the Electricity Generation Major Projects report is the project classification system.
Previously, BREE used a binary classification system to identify an electricity generation project as being either
‘advanced’ or ‘less advanced’. A project that had received a FID from the project proponent was included on the
advanced list. Under the revised classification, all projects that have received FID are defined as projects at the
Committed Stage.
The substantive change to classifying projects concerns the ‘less advanced’ list. This stage of the inves tment
pipeline has been separated into projects at the Publicly Announced Stage and projects that have progressed to the
Feasibility Stage. In addition, BREE has created an additional category, defined as the Completed Stage, for
projects that have finished, or where initial production could commence. Collectively, the four stages of
development (Publicly Announced, Feasibility, Committed, and Completed) represent the complete investment
pipeline (see Figure 10).
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Figure 10: The stages of the investment pipeline
Definitions and explanations of the four stages of the pipeline include:
1. Publicly Announced Stage. Projects at this stage are either at a very early stage of planning or have stalled or
paused in their feasibility studies and may have an unclear development path. To include a project on the major
projects list at this stage, preliminary information on project schedule, planned capacity or cost should be
publicly available. These types of projects are, typically, at a very early stage of planning. As a result, not all
projects will progress from the Publicly Announced Stage to become operational facilit ies.
2. Feasibility Stage. This stage of the project development cycle is where the initial feasibility studies have been
completed and the results support further development. This stage is characterised by further studies being
undertaken to finalise project scope, complete engineering designs, assess environmental impacts and develop
commercial plans. BREE classifies such work as part of the Feasibility Stage until a FID is made. Typically,
BREE is able to gather information on at least two aspects of the project —cost, schedule and planned
capacity— as these have been defined in the completed pre-feasibility study. Projects at the Feasibility Stage
are less uncertain than those at the Publicly Announced Stage, but are still not guaranteed to progress fu rther
as evaluations of commercial prospects and approvals have not yet been finalised.
3. Committed Stage. Projects at this stage of the development cycle have received a positive FID from the owner
and a power purchase agreement (PPA) is typically in place. Projects at the Committed Stage are either under
construction or preparing to commence construction. Typically, projects at the Committed Stage have cost
estimates, schedules and plant capacities that are well defined and often publicly released. Neve rtheless, plans
are subject to change due to schedule delays, scope changes and cost overruns even after construction has
commenced.
4. Completed Stage. Previously, when construction was substantially finished to the point where initial production
could commence the electricity generation project was removed from the major projects list. From this point
onwards these projects will remain on the BREE list and will be included at the Completed Stage for a period of
up to ten years after construction so as to provide an on-going record of the investment pipeline.
There are earlier stages in developing electricity generation projects, such as concept and pre -development
activities, which are not included in the BREE model of the investment pipeline. Concept an d other predevelopment activities are important for the commercial development of an electricity generation project but are
beyond the scope of this report to include on a project basis.
The new project classification system is broadly comparable to the previous classifications system used in the
Major Electricity Generation Projects reports. The previous ‘less advanced’ projects would have included projects at
the Publicly Announced Stage and Feasibility Stage. The definition and inclusion in the previou s ‘advanced’ project
listing remains unchanged and is equivalent to the revised category, Committed Stage.
Projects at the Publicly Announced and Feasibility stages are potential capital investments. Not all of the projects in
these first two development stages are expected to progress to the Committed Stage largely because of changing
market conditions, cost pressures, and policy uncertainty.
The major projects list that accompanies this report is provided as a Microsoft Excel workbook. Projects are now
shown on separate worksheets based on the fuel type used in generation. Cost estimates and planned capacities
for the projects listed are only reported depending on publicly available sources and information provided directly by
the companies involved.
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Electricity Generation Major Projects
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3 Projects at the Publicly Announced
Stage
Overview
The Publicly Announced Stage of project development is the first stage in the investment pipeline. It includes
projects after concept and pre-development activities are completed, but have not yet completed an initial form of
feasibility study to fully assess the commercial viability of the proposed plant. Projects at this stage face many
challenges before they progress to FID. In some cases this progression through to the Feasibility Stage and to the
Committed Stage can take several years. During this development and planning phase project costs and market
conditions may prevent the project from going ahead or change the initial publicly announced project proposal.
Analysis of projects at the Publicly Announced Stage
BREE has identified 37 projects at the Publically Announced Stage with total capacity of 6 246 megawatts and total
investment value for disclosed projects amounting to $7.9 billion (table 2). The total capacity of the projects at the
Publically Announced Stage is equivalent to 11 per cent of Australia’s total generating capacity as at June 2012
(esaa 2013).
The locations of projects are dispersed across all states except the Northern Territory and the Australian Capital
Territory. The total disclosed value of the four gas and five wind powered projects located in New South Wales
amounts to $1.7 billion with combined planned capacity of 1 355 megawatts. There are nine projects at the
Publically Announced Stage in Victoria, including one gas-fired plant, six wind powered generation projects, and
one solar and one ocean generation projects. The projects announced in Victoria have a planned total capacity of 1
704 megawatts and disclosed total value of $1.5 billion.
In Queensland, there are two gas-fired plants, four wind powered generation projects, and one solar project at the
Publically Announced Stage with planned capacity of 1 241 megawatts and total disclosed value amounting to
$710 million. There is one gas project, six wind projects, and one solar generation project announced in South
Australia. The total planned capacity of these eight projects amounts to 884 megawatts with a disclosed combined
value of $2.0ed dIae oa lieladln Iab dan lan Iab Inbla iI bnoi lib being developed at the Publically
Announced Stage with total planned capacity of 902 megawatts and combined value of $2.0 billion.
Figure 11 shows the share of additional capacity of projects at the Publicly Announced of development which
consists of predominantly wind powered and gas-fired generation with the majority of these projects located in
Victoria, New South Wales, South Australia and Queensland.
Figure 11: Share of additional capacity of projects by energy source and by location – Publicly Announced Stage–as
at September 2013
Electricity Generation Major Projects
•
October 2013
23
Non-renewable electricity projects
At the end of August 2013, non-renewable electricity generation projects accounted for nine of the 37 iI bnoi lo
o b uPe dnl , gaaIPanbn oolAbn lan liIPan t1 per cent (2 530 megawatts) of disclosed new capacity at the
Publically Announced Stage. All of these non-renewable projects at the Publically Announced Stage are gas-fired
projects with total disclosed value of $2.6 billion. There is increasing interest in the development of gas -fired
generation because it is a relatively mature technology with lower emissions intensity than some other non renewable options, and relatively quick to build.
The largest non-renewable project at the Publically Announced stage in terms of capacity is EnergyAustralia’s
Marulan power station project. The proposed gas-fired generation project has planned capacity of 700 megawatts
and estimated capital expenditure of $450 million.
Renewable electricity projects
There are 28 renewable electricity generation projects with disclosed value of $5.2 billion, accounting for around 60
per cent (3 716 megawatts) of disclosed new capacity at the Publically Announced Stage. Twenty -three of these
projects are wind-powered, representing 49 per cent of the disclosed new capacity for electric ity projects at the
Publically Announced Stage.
The large number of proposed wind-powered electricity projects largely reflects government policy measures to
support the expansion of renewable energy sources and the cost competitiveness of wind relative to other, less
mature renewable energy technologies. TasWind being developed by Hydro Tasmania in Tasmania is the largest
wind renewable energy project reported at the Publically Announced Stage in terms of capacity and capital
expenditure. The project has a planned capacity of 600 megawatts and an estimated capital cost of $2.0 billion.
Ocean powered projects accounted for around a further 6 per cent of disclosed new capacity, and solar powered
projects accounted for the remaining 5 per cent. Tenax Energy’s Banks Strait Tidal Energy Facility project in
Tasmania has a planned capacity of 302 megawatts and is scheduled for completion in 2018.
The Mildura Power Station, being developed by Solar Systems, comprises photovoltaic (PV) heliostat solar
concentrator technology. The 154 megawatt solar power station is planned to be built at Carwarp, near Mildura,
Victoria.
Table 2: Major electricity projects–Publically Announced Stage–as at September 2013
NSW
energy
source
Qld
Valu
No capacity
e
.
MW
$m
WA
Valu
No capacity
e
.
MW
$m
NT
SA
Valu
No capacity
e
.
MW
$m
Valu
No capacity
e
.
MW
$m
No.
capacity
MW
nonrenewable
4
940
890
2
750
250
1
90
na
0
0
0
1
Oil
0
0
0
0
0
0
0
0
0
0
0
0
0
Gas
4
940
890
2
750
250
1
90
na
0
0
0
1
Brown coal
0
0
0
0
0
0
0
0
0
0
0
0
0
Brown coal
gasification
0
0
0
0
0
0
0
0
0
0
0
0
Black coal
0
0
0
0
0
0
0
0
0
0
0
To be
determined
0
0
0
0
0
0
0
0
0
0
renewable
5
415
762
5
491
460
1
70
na
Wind
5
415
762
4
391
160
1
70
Hydro
0
0
0
0
0
0
0
Solar
0
0
0
1
100
300
Biomass
0
0
0
0
0
Geothermal
0
0
0
0
0
Electricity Generation Major Projects
Vic *
Valu
No capacity
e
.
MW
$m
Tas
Valu
No capacity
e
.
MW
$m
Total **
Valu
No capacity
e
.
MW
$m
Valu
e
$m
300 1 500
1
450
na
0
0
0
9
0
0
0
0
0
0
0
0
300 1 500
1
450
na
0
0
0
9
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7
584
530
8
1 254 1 475
2
902 2 000 28
3 716 5 227
na
0
0
0
6
544
300
6
1 066 1 475
1
600 2 000 23
3 086 4 697
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
40
230
1
154
na
0
0
0
3
294
530
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
•
October 2013
0
2 530 2 640
0
0
2 530 2 640
24
Ocean
0
Total
9
0
0
0
0
0
0
0
0
0
0
0
1 355 1 652
7
1 241
710
2
160
na
0
0
0
8
0
0
1
884 2 030
9
0
na
1
302
1 704 1 475
2
902 2 000 37
34
na
2
336
na
6 246 7 867
Notes: * capital expenditure data for project costs is undisclosed for the gas, solar and ocean projects in Victoria;
** capital expenditure data for project costs is undisclosed for 18 of the 37 projects at the Publically Announced Stage;
na not available.
4 Projects at the Feasibility Stage
Overview
Projects at the Feasibility Stage have completed initial feasibility studies into their commercial viability and have an
announced development path ahead of them. The Feasibility Stage represents the maximum possible investment
that could be made in the Australian electricity generation sector (limited to plants of 30 megawatts or more ) within
the next few years.
The uncertainty over the number of projects that are likely to receive a positive FID in the next five years indicates
the value of the projects at the Feasibility Stage is only the potential for investment and not all of this will become
committed. Consequently, a measure of the value of projects at the Feasibility Stage is not directly comparable to
the value of the more certain projects at the Committed Stage.
Analysis of projects at the Feasibility Stage
BREE has identified 100 projects at the Feasibility Stage with combined capacity of 33 129 megawatts and total
(disclosed) capital expenditure amounting to $42.8 billion (table 3). The total capacity of the projects at the
Feasibility Stage is equivalent to 60 per cent of Australia’s total generating ca pacity as at June 2012 (ESAA 2013).
The location of projects is widespread, with at least one project (with potential capacity of 30 megawatts or more) in
each jurisdiction except the Australian Capital Territory (table 3).
Around a third of the 100 projects at the Feasibility Stage are located in New South Wales, with 20 projects planned
for South Australia, 19 located in Victoria, 15 projects in Queensland, 10 planed in Western Australia, two projects
in Tasmania and one project planned in the Northern Territory.
At the end of August 2013, non-renewable electricity generation projects accounted for 29 of the 100 projects at the
Feasibility Stage, and 57 per cent (18 764 megawatts) of disclosed new capacity at the Feasibility Stage. The
majority of these non-renewable projects at the Feasibility Stage are gas-fired projects with coal-fired generation
projects representing 8 per cent of potential new capacity at the Feasibility Stage. There is also an oil powered
plant at the Feasibility Stage with capacity of 150 megawatts and two other non-renewable projects proposed for
development with fuel type to be determined.
There are 71 renewable electricity generation projects, accounting for around 43 per cent (14 365 megawatts) of
disclosed new capacity at the Feasibility Stage. Fifty-five of these projects are windpowered, representing 37 per
cent of the disclosed new capacity for electricity projects at the Feasibility Stage. Three geothermal and ten solar
powered projects each accounted for around 2 per cent of disclosed new capacity at the Feasibility Stage of
development. There is also a hydroelectric plant at the Feasibility Stage with capacity of 37 megawatts, a biomass
generation facility with 83 megawatts of planned capacity, and one ocean powered project proposed for
development with planned capacity of 450 megawatts.
Electricity Generation Major Projects
•
October 2013
25
Table 3: Major electricity projects–Feasibility Stage–as at September 2013
NSW
energy
source
No capacit
.
y
MW
nonrenewable 10
Qld
NT *
SA
Vic **
Tas
Total ***
Valu No capacit Value No capacit Value No capacit Value No. capacit Value No. capacit Value No. capacit Value No. capacit Value
e
$m
$m
$m
$m
$m
$m
$m
.
y
.
y
.
y
y
y
y
y
$m
MW
MW
MW
MW
MW
MW
MW
7 390 5 940
4
110
0
3 240 2 030
4
150
WA
3 050 4 150
5
0
0
3 050 4 150
0
0
0
5
0
0
0
0
0
0
2
568
200
0
0
0
3
2 860 5 050
5
0
0
2 020 1 550
4
0
0
0
0
0
0
0
3 050 1 825
0
0
0
0
0
0
0
0
0
0
600 1 100
0
0
0
1
600
1 100
150
110
20 11 928
9 755
Gas
7
Brown
coal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Brown
coal
gasificatio
n
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
Black coal
0
0
0
0
0
0
3
1 246
1600
0
0
0
2
840 3 500
0
0
0
0
0
0
5
2 086
5 100
To be
determine
d
2
4 000 3 800
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
4 000
3 800
1 735 3 970
5
1 068 1 364
1
450
na
15
3 196 4 573
14
2 227 4 063
2
680 1 700
71 14 365 22 959
1 555 3 230
3
968
964
0
0
0
14
2 596 4 498
11
1 857 3 988
2
680 1 700
55 12 359 20 889
5 008 7 289
Wind
0
0
29 18 764 19 865
1
23
0
3 650 2 925
Oil
renewable
0
1 814 1 800
0
1
11
4 702 6 509
7
18
Hydro
0
0
na
1
37
na
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
37
na
Solar
5
306
780
2
60
240
2
100
400
0
0
0
0
0
0
1
180
na
0
0
0
10
646
1 420
Biomass
0
0
0
1
83
500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
83
500
Geotherm
al
0
0
0
0
0
0
0
0
0
0
0
0
1
600
75
2
190
75
0
0
0
3
790
150
Ocean
0
0
0
0
0
0
0
0
0
1
450
na
0
0
0
0
0
0
0
0
0
1
450
na
12 398 13 229
15
4 785
8 120
10
2 882
3 164
1
450
0
20
6 056
9 623
19
5 877
6 988
2
680
1 700 100
33 129
42 824
Total
33
Notes:
* capital expenditure data for project costs is undisclosed for the Northern Territory
** capital expenditure data for project costs is undisclosed for the solar project in Victoria
*** capital expenditure data for project costs is undisclosed for 29 of the 100 projects in the Feasibility Stage
na not available
Electricity Generation Major Projects
•
October 2013
26
5 Projects at the Committed Stage
Overview
Projects at the Committed Stage of development have received a FID and have either started, or are about to start,
construction. While these projects are more certain than projects at the Publicly Announced and Feasibility Stages,
they are not immune to cost increases and schedule variations.
There are currently 22 projects identified at the Committed Stage, an increase from 20 projects at an advanced
stage of development reported in the November 2012 Major Electricity Generation Projects report. These
committed projects have an estimated total investment value of $5.6 billion and planned additional capacity of 2 689
megawatts (Table 4 and 5).
Table 4: Major electricity projects–Committed Stage–as at September 2013*
Australia
energy source
number
capacity
Share of new
capacity
cost *
MW
%
$m
non-renewable
4
588
22
1 217
Oil
0
0
0
0
Gas
4
588
22
1 217
Brown coal
0
0
0
0
Brown coal gasification
0
0
0
0
Black coal
0
0
0
0
To be determined
0
0
0
0
renewable
18
2 101
78
4 350
Wind
14
1867
69
3 775
Hydro
1
40
1
20
Solar
3
194
7
555
Biomass
0
0
0
0
Geothermal
0
0
0
0
Ocean
0
0
0
0
22
2 689
100
5 567
total
Notes: * capital expenditure data for project costs is undisclosed for three of the 22 projects
Electricity Generation Major Projects
•
October 2013
27
Table 5: Major electricity projects–Committed Stage–as at September 2013 *
NSW
energy
source
Qld
WA
NT *
SA
Vic
Tas
Total
No. capacity Value No. capacity Value No. capacity Value No. capacity Value No. capacity Value No. capacity Value No. capacity Value No. capacity Value
$m
$m
$m
$m
$m
$m
$m
$m
MW
MW
MW
MW
MW
MW
MW
MW
nonrenewable
0
0
0
1
302
570
1
190
597
2
96
50
0
0
0
0
0
0
0
0
0
4
588 1 217
Oil
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Gas
0
0
0
1
302
570
1
190
597
2
96
50
0
0
0
0
0
0
0
0
0
4
Brown coal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Brown coal
gasification
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Black coal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
To be
determined
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
renewable
7
630 1 460
1
44
105
1
130
na
0
0
0
2
447
789
7
850 1 996
0
0
0
18
2 101 4 350
Wind
4
440
990
0
0
0
1
130
na
0
0
0
2
447
789
7
850 1 996
0
0
0
14
1 867 3 775
Hydro
1
40
20
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
na
na
Solar
2
150
450
1
44
105
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
194
555
Biomass
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Geothermal
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Ocean
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total
7
630 1 460
2
346
675
2
320
597
2
96
50
2
447
789
7
850 1 996
0
0
0
22
0
0
588 1 217
2 689 5 567
Notes: * capital expenditure data for project costs is undisclosed for three of the 22 projects.
na not available
Analysis of projects at the Committed Stage
As at end August 2013, there were 22 projects at the Committed Stage of development. These projects, using a
range of energy sources have a total capacity of 2 689 megawatts and an estimated capital expenditure of $5.6
billion (table 4 and 5). The total capacity of projects at the Committed Stage is equivalent to 5 per cent of Australia’s
total generating capacity as at June 2012 (ESAA 2013).
Map 1 presents the location of the 22 projects at the Committed Stage of development. The location of projects is
spread geographically, with at least one project of 30 megawatts or more in each jurisdiction except Tasmania and
the Australian Capital Territory. Table 6 shows that the pipeline of investment in electricity generation in Australia is
not evenly distributed across the jurisdictions with the bulk of the planned new capacity at the Committed Stage of
development located in Victoria and New South Wales.
Figure 12 shows the share of additional capacity of projects at the Committed Stage of development which co nsists
of predominantly wind powered generation with the majority of these projects located in Victoria and New South
Wales.
Electricity Generation Major Projects
•
October 2013
28
Figure 12: Share of additional capacity of projects by energy source and by location –Committed Stage–as at
September 2013
At the end of August 2013, non-renewable electricity generation projects accounted for four of the 22 projects at the
Committed Stage, and around 22 per cent (588 megawatts) of disclosed new capacity. All of the non -renewable
projects at the Committed Stage are gas-fired projects with disclosed value of around $1.2 billion.
There are 18 renewable electricity generation projects at the Committed Stage, accounting for around 78 per cent
(2 101 megawatts) of disclosed new capacity. Fourteen of these projects are wind powered, representing 69 per
cent of the disclosed new capacity for renewable electricity projects at the Committed Stage. Three solar powered
projects account for around 7 per cent of disclosed new renewable capacity. There is also one hydroelectric plant at
the Committed Stage proposed for development with planned capacity of 40 megawatts.
Electricity Generation Major Projects
•
October 2013
29
Table 6: Regional investment pipeline
Publicly Announced *
region
No.
Feasibility Stage **
Committed Stage ***
capacit
Value
No. capacit
Value
y
$m
y
$m
MW
No.
Completed Stage
capacity
Value
MW
$m
No.
MW
Total
capacit
Value
No. capacit
Value
y
$m
y
$m
MW
MW
9
1 355
1 652
33
12 398
13 229
7
630
1 460
1
240
600
50
14 623
16 941
Queensland
7
1 241
710
15
4 785
8 120
2
346
675
0
0
0
24
6 372
9 505
Western
2
160
na
10
2 882
3 164
2
320
597
1
55
200
15
3 417
3 961
0
0
0
1
450
0
2
96
50
0
0
0
3
546
50
South Australia
8
884
2 030
20
6 056
9 623
2
447
789
0
0
0
30
7 387
12 442
Victoria
9
1 704
1 475
19
5 877
6 988
7
850
1 996
1
420
1 000
36
8 851
11 459
Tasmania
2
902
2 000
2
680
1 700
0
0
0
1
168
400
5
1 750
4 100
37
6 246
7 867
100
33 129
42 824
22
2 689
5 567
4
883
2 200
163
42 947
58 458
New South
Wales
Australia
Northern
Territory
Total
Notes: * capital expenditure data for project costs is undisclosed for 18 of the 37 projects at the Publically Announced Stage;
** capital expenditure data for project costs is undisclosed for 25 of the 100 projects at the Feasibility Stage;
*** capital expenditure data for project costs is undisclosed for three of the 22 projects at the Committed Stage;
na not available.
Electricity Generation Major Projects
•
October 2013
30
Map 1: Electricity generation projects—Committed Stage—September 2013
Figure 13: Pipeline of investment in Australia’s electricity generation sector
Electricity Generation Major Projects
•
October 2013
31
Analysis of projects at the Committed Stage by region
New South Wales
Renewable electricity projects
AGL has committed to developing two large-scale solar PV power projects in regional New South Wales. The
Nyngan Solar Plant is scheduled for completion in 2015 with estimated capital expenditure of $300 million and will
consist of a 100 megawatt solar PV power station. The Broken Hill Solar Plant will consist of a 50 megawatt solar
PV power station located approximately 5 kilometres southwest of Broken Hill. The estimated capital cost of the
Broken Hill Solar Plant amounts to $150 million.
Wind Prospect CWP, a joint venture company between the Wind Prospect Group and Continental Wind Partners, is
developing the Boco Rock Wind Farm at an estimated capital cost of $350 million. The wind powered generation
project near Nimmitabel is planned to add 113 megawatts to existing capacity.
The Glen Innes WindPower Pty Ltd consortium led by National Power plans to develop the 6 2.5 megawatt Glen
Innes Wind Farm at Waterloo Range. The wind powered project is scheduled for completion in 2014 at a capital
cost of $150 million.
The Gullen Range Wind Farm is under construction and is scheduled for completion in the first quarter of 20 14. The
wind powered project, being developed near Goulburn, New South Wales is planned to add 158.5 megawatts to
existing capacity at a capital cost of $250 million.
The Upper Tumut project that is being developed as part of Snowy Hydro’s $400 million Scheme Modernisation
project is planned to expand capacity by 40 megawatts at a capital cost of $20 million and is expected to be
commissioned in 2013.
Queensland
Non-renewable electricity projects
The largest non-renewable project at the Committed Stage of development is the Diamantina Power Station project
that is being developed by APA Group and AGL Energy. The new power station is under construction and
scheduled for completion in 2014. The gas-fired generation project comprises a 242 megawatt combined cycle gas
turbine unit and a 60 MW open-cycle gas turbine unit. The project will expand existing capacity by 302 megawatts
at a capital cost of $570 million.
Renewable electricity projects
The Kogan Creek Solar Boost Project expansion being developed by CS Energy near Chinchilla is scheduled to
add 44 megawatts to existing capacity at a capital cost of $105 million. The solar powered project is under
construction and is scheduled for completion in 2014.
Western Australia
Non-renewable electricity projects
BHP Billiton’s Yarnima Power Station is under construction and expected to be completed in the first half of 2014.
The 190 megawatt gas-fired project at Newman, Western Australia, is estimated to cost $597 million.
Renewable electricity projects
Construction of APA Group’s Badgingarra Wind Farm is planned to be completed by end of 2016 and is scheduled
to add up to 130 megawatts to existing capacity.
Northern Territory
Non-renewable electricity projects
The Weddell Stage 3 expansion, being undertaken by Power and Water Corporation in the Northern Territory, is
scheduled to add 43 megawatts to existing capacity in 2013 at a capital cost of $50 million. The expansion project
involves the addition of a third gas turbine at Weddell Power Station.
Energy Developments Ltd (EDL) is expanding power supply arrangements to Xstrata’s McArthur River Mine in the
Northern Territory to meet the increased energy demands of the Phase 3 Development Project. The new pro ject
involves the construction of a new 53 megawatt gas-fired power station to be fuelled by natural gas supplied by
Xstrata from the Daly Waters to McArthur River Pipeline. The project is expected to be completed in 2014.
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South Australia
Renewable electricity projects
The Lincoln Gap Wind Farm Pty Ltd consortium led by National Power plans to develop the 177 megawatt Lincoln
Gap Wind Farm near Port Augusta. The wind powered project is scheduled for completion in 2014 at a capital cost
of $350 million.
The expansion of TrustPower’s Snowtown wind farm (stage 2) in South Australia is scheduled to add
270 megawatts to existing capacity in 2013 at a capital cost of $439 million.
Victoria
Renewable electricity projects
Acciona Energy has committed to developing two large windfarm projects in regional Victoria. The Mount Gellibrand
Wind Farm is under construction and is scheduled for completion in 2015. The wind power project will add 189
megawatts to existing capacity with estimated capital expenditure of $696 million. Construction is expected to
commence by October 2013 at Acciona Energy’s Mortlake South Wind Farm. The project will consist of a
76.5 megawatt wind power station located approximately 5 kilometres south of Mortlak e. The estimated capital cost
of the Mortlake South Wind Farm is $200 million.
The Mount Mercer Wind Farm that is being developed by Meridian Energy near Ballarat , Victoria, is expected to
add 131 megawatts to existing capacity at a capital cost of $270 million. The wind power project is under
construction and is expected to be completed in 2013.
The Bald Hills Wind Farm being developed by Mitsui & Co (Australia) Ltd is under construction with scheduled
completion in 2015. The wind power project is planned to add 104 megawatts to existing capacity at a capital cost
of $300 million.
Pacific Hydro has committed to the construction of the Crowlands Wind Farm, near Arar at in Victoria. The wind
power project is planned to add 84 megawatts to existing capacity. RES Australia Pty Ltd also proposes the
development of the Ararat Windfarm project at Ararat. RES Australia Pty Ltd’s project is scheduled for completion in
2015 at a capital cost of $450 million, and is planned to add 225 megawatts to existing capacity.
Wind Farm Developments are constructing the Woolsthorpe Wind Farm, located west of Woolsthorpe, with
scheduled completion in 2013. The windfarm project is planned to add 40 megawatts to existing capacity at a
capital cost in the range of $60-100 million.
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6 Projects at the Completed Stage
Overview
Projects that have completed construction so as to be able to commence production since October 2012 are
included at the Completed Stage of the investment pipeline. From October 2012 to August 2013, four electricity
generation projects were completed (table 7). This compares with nine completed in the year to October 2012 and
two in the year to October 2011. A number of projects scheduled to be commissioned over the past year were
delayed, owing to several factors including difficulties in negotiating fuel inputs to generation and in finalising
financing arrangements. The completed projects in 2013 have a total generation capacity of 883 megawatts and a
total capital cost of around $2.2 billion.
Table 7: Major electricity projects–Completed Stage–as at September 2013
energy
source
project
location
company
capacity
MW
capital
expenditure
A$m
Black
coal
Eraring Power
Station upgrade
NSW
Eraring Energy
240
600
Wind
Macarthur Wind
Farm
Vic
AGL Energy/
Meridian Energy
420
1000
Wind
Musselroe Bay
Wind Farm
Tas
Hydro Tasmania
168
400
Wind
Mumbida Wind
Farm
WA
Verve
Energy/Infrastruc
ture Capital
Group
55
200
Analysis of projects progressing to the Completed Stage
The expansion and upgrade of Eraring Energy’s Eraring Power Station in New South Wales was completed at the
end of 2012. The expansion project comprised $600 million of capital expenditure for a life -extension of the plant
and upgrade of the four generating units from 660 megawatts to 720 megawatts each, representing a total station
increase of 240 megawatts. The life-extension and upgrade project involved the construction of a cooling water
reservoir to enhance output of units over the summer period.
The Macarthur Wind Farm being developed by AGL Energy and Meridian Energy in Victoria has been completed
with capacity of 420 megawatts and a capital cost of $1 billion. The Musselroe Bay Wind Farm project being
developed by Hydro Tasmania has been completed at a capital cost of $400 million. The wind power project
contributes 168 megawatts of additional capacity to the electricity grid. The Mumbida Wind Farm being developed
by joint partners Verve Energy and Infrastructure Capital Group has been completed in March 2013. The wind
power project adds 55 megawatts to existing capacity at a capital cost of $200 million.
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7 Outlook for investment in generation
capacity
Overview
There are three electricity markets in Australian that are separated by geographical distance. In the eastern states,
the National Electricity Market (NEM) forms an interconnected system that supplies electricity to customers in
Queensland, New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.
Western Australia’s electricity market consists of the South West Interconnected System (SWIS) including Perth
and the North West Interconnected System (NWIS) for the mining areas in the north of Western Australia. In
addition to the SWIS and the NWIS, 29 non-interconnected distribution systems also operate around towns in rural
and remote areas across the state.
The relatively smaller electricity market in the Northern Territory comprises three regulated systems: the Alice
Springs system; the Darwin-Katherine system; and the Tennant Creek system.
Requirements for investment in electricity generation in these three markets are largely autonomous.
National Electricity Market
Opportunities for investment in generation capacity in the NEM are reported by the Australian Energy Market
Operator (AEMO) in the Electricity Statement of Opportunities (ESOO). The ESOO identifies Low Reserve
Condition (LRC) points that are used to indicate the required additional investment in generation or demand -side
participation to maintain reliability of supply in the NEM over the next 10 years.
In the 2013 ESOO, reserve deficits are only identified in Queensland with no reserve deficits identified in New
South Wales, Victoria, South Australia or Tasmania. AEMO conclude that ther e is adequate generation capacity
from existing and committed electricity capacity to meet demand in the NEM over the period 2013 –14 to 2022–23 in
all regions except Queensland.
Western Australia
The Statement of Opportunities (SOO) published by the Independent Market Operator (IMOWA) of Western
Australia, provides information to existing and potential industry participants on capacity which is planned to be built
or under construction in Western Australia. The SOO highlights opportunities for investment in generation and
Demand Side Management (DSM) in the Western Australian Wholesale Electricity Market (WEM) under the
Reserve Capacity Mechanism (RCM); a process for setting capacity requirements to secure sufficient capacity to
meet peak demand.
The 2013 SOO provides an assessment of the capacity requirement for the 2015–16 Capacity Year commencing
on 1 October 2015. The IMO conclude that the additional capacity required to meet supply adequacy for 2015 –16 is
set at 5 119 megawatts.
Northern Territory
The Utilities Commission publishes the annual Power System Review (the Review) reporting on prospective trends
in the capacity and performance of the Northern Territory power system. The Review assesses generation
adequacy in case of an N-2 event involving the loss of the two largest units of generation plant.
A generation supply-demand balance is used to determine generation adequacy in each of the Alice Springs,
Darwin-Katherine, and Tennant Creek systems relative to forecast electricity demand in the three r egulated
systems.
The Utilities Commission conclude that there is sufficient generation capacity to maintain the supply -demand
balance in the Darwin-Katherine system through to the summer of 2019-20, in the Alice Springs system from
December 2012–13 to 2021–22, and in the Tennant Creek system to 2021–22.
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References
Australian Energy Market Operator (AEMO) 2013a, 2013 Electricity Statement of Opportunities, August.
Australian Energy Market Operator (AEMO) 2012, 2012 National Electricity Forecasting Report, June.
Australian Energy Market Operator (AEMO) 2013b, 2013 National Electricity Forecasting Report, June.
BREE 2013, 2013 Australian energy statistics, BREE, Canberra, July.
Energy Supply Association Australia (esaa) 2013, Electricity Gas Australia 2013, Melbourne, July.
Independent Market Operator (IMOWA) of Western Australia 2013, 2013 Statement of Opportunities, June.
Utilities Commission 2013, Power System Review 2011-12, Northern Territory Government, April.
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