In May this year, NSW Premier Morris Iemma established an inquiry into Electricity Supply in NSW to advise the government on the actions it needs to take for a timely investment in new baseload generation. Released in September, the resulting Owen Inquiry into Electricity Supply in NSW, warned that the state needs to be prepared for more baseload power.

In the report, author Professor Anthony Owen recommended that the NSW Government divest itself of all state ownership in both energy retail and generation and that cleaner energy sources, particularly gas, must be developed to increase baseload energy supply.

Baseload power plants provide a steady flow of power - regardless of demand - and in NSW, they are fuelled by coal. Hydro and open cycle gas turbines (OCGTs) are currently the main providers of peak supply in NSW, however Professor Owen found that gas can also be used as a baseload fuel in combined cycle gas turbine (CCGT) plants.

“The modular nature, lower capital cost, and lower CO2 emissions of CCGT plants is increasingly viewed as a more flexible and environmentally sensitive option to coal-fired plants for baseload,” Professor Owen said.

The report clearly stated the environmental and economic benefits of gas-fired plants over coal.

It found that Australia’s eastern states have a potential abundance of coal seam gas to support long term gas-fired generation if more plants were to be built in NSW. Southeast Queensland and offshore Victoria, in the Gippsland and Otway Basins, are gas-rich areas and NSW has ‘large’ coal reserves and prospective coal seam gas reserves.

Professor Owen said that given NSW’s potential resources, “There is a strong likelihood that NSW generators will be able to obtain fuel at least similar or even lower costs than generators in other jurisdictions, leading to increased NSW generation and reduced interstate energy flows in the medium term.”

The report also highlighted the fact that gas-fired plants are now an economically viable alternative to coal-fired plants.

NSW government measures to tackle climate change and reduce emissions - including a forerunner to the national trading emissions scheme, the Greenhouse Gas Reduction Scheme - has seen the development of CCGT technology that is now competitive with coal, said Professor Owen.

The Clean Energy Council welcomes the findings of the Owen Inquiry and has called for a clean break from nineteenth and twentieth century polluting technology.

“NSW is blessed with abundant renewable energy and energy efficiency potential and natural gas supply options. We hope the NSW Government uses Owen Inquiry as an historic launch pad for a transition to a low greenhouse gas emitting future,” says Chief Executive Officer Dominique La Fontaine.

Given the NSW Government’s official forecasts indicate that NSW will need about an extra 17,000 GWh, or 24 per cent more electricity per annum by 2020, she explains, the key test for the Owen Inquiry Report will be how seriously it considers clean energy technology for meeting this growing demand.

“The NSW based coal power stations are currently only operating on average at about 65 per cent of their capacity, while their counterparts in Victoria and Queensland are operating at over 80 per cent of capacity. This NSW spare capacity gives us breathing space to get serious about clean energy,” says Ms Fontaine.

The Owen report emphasised the need to focus on new initiatives to address the state’s increasing baseload energy demand and to “alter the picture” of the state’s future energy consumption.

It found that while emerging baseload technologies, such as geothermal and solar thermal, have the potential to meet energy demand in a future carbon constrained environment, they will not be commercially available by the time the state needs to be ready for an increased baseload in 2013-14.

Gas is therefore a viable alternative and the Council says there are numerous clean energy options to meet the state’s extra 17,000 GWh in annual demand. These include:

- The NSW Government’s Renewable Energy Target that will deliver 7,250 GWh of renewable energy by 2020. - The new gas-fired power stations that are currently being built at Tallawarra, Munmorah, and Uranquinty (near Wagga) which could generate more than 5,000 gigawatt hours (GWh) per year. - Proposed new gas-fired power stations, including at Wellington, Tallawarra stage two, Tomago and Bamarang (near Nowra) which could produce more than 7,000 GWh per year. - Energy efficiency measures which, according to the National Framework for Energy Efficiency, could reduce energy consumption by 20 per cent or 15,000 GWh per year through measures that pay for themselves within four years through reduced energy bills.

“Renewable and clean power generation and energy efficiency can provide more than twice our expected growth in electricity needs to 2020. NSW simply does not have to choose between reliable, affordable power and a cleaner environment,” said Ms La Fontaine. “We can have both.”