Australia is energy rich with large reserves of coal that are both relativelycheap to mine and located close to major load centres. Resources of natural gasand uranium are also substantial, but are mostly located far from majordomestic markets or, in the case of uranium, not used for energy supply locallydue to political and environmental opposition. The nation’s oil reserves aresigniﬁcant, but reserves are declining in the face of continued production andthe absence of new discoveries. However, Australia’s plentiful resources of oilshale, coal and gas could support conversion to liquids if required, albeit atincreased CO
-emission levels.Access to cheap energy resources has provided Australia with competitivelypriced energy domestically. In particular, coal now provides approximately83% of Australia’s electricity, with Australia having among the lowest elec-tricity prices in the developed world. This low-cost energy has also allowed thedevelopment of large energy-intensive industries such as aluminium smeltingand alumina production.Energy-based commodities provide a major source of income to Australia,with coal (thermal plus coking) being the largest single export-income earnerand comprising approximately 16% of total Australian export income for2005/06. Crude petroleum, aluminium, alumina and natural gas are also allwithin the top 10 exports by value (both crude and reﬁned petroleum productsare also among Australia’s largest imports). Australia’s high GDP per capitapresently depends strongly on access to cheap energy resources.Australia has a market economy based primarily around service and mineralextraction industries, while the Australian manufacturing sector is relativelysmall. Australia’s small population and geographical isolation do not support alarge heavy-manufacturing industry and the majority of power generation andcarbon-capture technology probably will be imported.Historically, utilities such as electricity and water were provided by Stategovernments. However, progressive market reform has led to the breakup andprivatisation or corporatisation of many of these former State-owned entities.The economic reforms have also resulted in a fully competitive market forelectricity. The states of Queensland, New South Wales, Victoria, South Aus-tralia and Tasmania are all interconnected
the south-east grid and power onthis grid is actively traded
the National Electricity Market (NEM).The electricity industry is a major emitter of greenhouse gases, beingresponsible for 198 million tonnes of CO
e, or about 35% of the nation’s totalCO
e emissions, in 2006. Following the market reforms, the industry is com-prised of a mix of small (by international scale) local utilities and larger mul-tinational companies where power stations in Australia are part only of theirbroader international portfolio.That Australia’s economic well-being will continue to be based on low-costcoal for electricity generation, energy security and export income for some timeto come, has been well recognised by successive governments and also some keyenvironmentalactiongroups.However,globalwarmingisalsoprojectedtohavea serious impact in Australia, with increased drought and bushﬁre risk,decreased food production and increased risk of loss of native fauna and ﬂora.
Allen Lowe, Burt Beasley and Thomas Berly
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