This document was added or updated on 05/02/2010.

ENERGY

In 2007–08, Australia’s total domestic energy use was 5,772 petajoules (PJ). Over the 32 years from 1975–76 to 2007–08, total energy use in Australia rose by 111%, up from 2,731 PJ in 1975–76. This represented a compound annual growth of nearly 2.4%.

Growth rates were highest in the period from 1983–84 to 1989–90 (averaging 3.3%). From 1990–91, growth rates have averaged 2.1% annually.

Over the last 30 years, energy use by industry has tended to grow more slowly than growth in GDP, reflecting declining energy intensity (energy used to produce a unit of economic output).

The decline in energy intensity of the Australian economy has been attributed to two main factors. One is an increase in energy efficiency due to technological advances. The other is the more rapid growth of less energy intensive sectors, such as the services sector, relative to lower growth rates in more energy intensive sectors such as manufacturing and mining.

Of the 5,772 PJ of energy used nationally, the state or territory with the highest energy use was New South Wales (27%), followed by Victoria (24%), Queensland (23%) and Western Australia (16%). Those with the lowest use were South Australia (6%), Tasmania (2%) and the Northern
Territory (2%) (Endnote 1).



The mix of fuels used to provide energy has changed little since 2000–01. In 2007–08, black and brown coal accounted for 40% of primary energy consumption (down from 42% in 2000–01). The shares of petroleum products (e.g. automotive gasoline, diesel, aviation turbine fuel, and fuel oil) and natural gas both rose slightly, to 35% and 22%, respectively.



In 2007–08, Australia’s total primary energy production was estimated at 17,360 petajoules (PJ), nearly all of which was from non-renewables. Black and brown coal accounted for 54% of energy production, followed by uranium (27%), natural gas (11%) and crude oil (6%) (Endnote 2).

From 1975–76 to 2007–08, the production of non-renewable fuels grew from 3,158 PJ to 17,070 PJ, an increase of 441%. This increase was driven more by overseas demand than domestic consumption.


Over 96% of fuels used to generate electricity in Australia’s are non-renewables. Black and brown coal alone account for 84%. Consequently, the electricity sector is a major emitter of greenhouse gases, accounting for one-third of Australia’s net greenhouse gas emissions in 2007 (Endnote 3).

There is a wide variation in the estimated greenhouse gas emissions intensities of electricity generation technologies currently used in many countries. The emissions intensity of fossil fuels (such as coal and gas) is much higher than for renewable fuels (especially wind and hydro) or nuclear power.



Growth in Australia’s production of renewable energy (hydro-electricity, biomass, biofuels, wind and solar) increased by 41% from 1975–76 to 2007–08 (from 206 PJ to 290 PJ).

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	2001-02	2007-08	Increase
	(PJ)	(PJ)	(%)
Bagasse	91.7	111.9	22
Other biofuels (b)	10.1	17.6	74
Hydro-electricity	57.5	43.4	-25
Solar hot water	2.7	6.5	141
Wind and solar photovoltaic	0.6	14.6	2 333
Wood and wood waste	95.0	96.0	1
Total	257.6	290.0	13

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(a) Electricity and heat.
(b) Includes biogas, black liquor, crop and municipal waste.
Source: ABARE, 2009, Energy statistics - historical, Table A, <http://www.abare.gov.au/publications_html/data/data/data.html>, last viewed November 2009; ABARE, 2009, Energy in Australia 2009.


Renewable energy production is heavily dominated by bagasse, wood and hydro-electricity. Bagasse is a sugar cane residue used to power sugar mills and to generate electricity. Bagasse, wood and hydro-electricity accounted for 39%, 33% and 15%, respectively, of renewable energy production in 2007–08. Hydro-electricity generation was restricted due to continued drought conditions in many areas (Endnote 4).

Although hydro-electricity generation fell, overall renewable energy production increased by 13% between 2001–02 and 2007–08, due largely to strong growth of bagasse and wind energy.

Large-scale wind power projects have been completed in recent years, with more planned or under construction. The recently completed 192 megawatt Waubra Wind Farm in Victoria is the largest capacity renewable energy project completed so far and is the largest wind farm in the southern hemisphere. As at April 2009, nearly 13% of committed electricity generation projects were wind power (Endnote 5).

Electricity generation from solar photovoltaic (PV) cells is growing very quickly, but from a very low base. Government subsidies for installation and the payment of feed-in tariffs for electricity produced from PV units have been instrumental in encouraging the take-up of this technology. However, small scale applications in residential and commercial buildings still dominate this sector.



The proportion of total energy consumption by industry changes slowly over time. In 2006–07, manufacturing accounted for 36%, followed by electricity, gas and water (31%), transport (6%) and mining (5%). Households accounted for 12% of energy consumption. While energy consumption has grown with population and economic growth, the rate of growth in energy consumption has generally been slower than growth in economic output.

Energy intensity is a measure of energy used per unit of economic output. Here it is expressed as gigajoules per million dollars of Industry Gross Value Added (GJ/$m IGVA). From 1976–77 to 2006–07 energy intensity fell for all major industries, except mining and agriculture. Energy intensity in mining and agriculture increased by 99% and 41%, respectively. By contrast, energy intensity in the transport and construction industries decreased by 49% and 74%, respectively.


Care should be exercised in interpreting changes in energy intensity. For example, mining is increasingly dominated by the low value per tonne commodities iron ore and coal. Open cut mining is the preferred method of extraction because total costs are generally lower than for underground mining, even though open cut mining is more energy intensive. In contrast, fuel costs have always constituted a large portion of total costs in the Transport industry, and significant falls in energy intensity have been achieved in response to sustained increases in fuel costs.



The amount and type of energy used by households has considerable implications for the environment, including depletion of natural resources, greenhouse gas generation and air pollution.

In March 2008, 99.9% of Australian households used electricity for power and/or heating. However, the availability and use of mains gas and bottled LPG gas is increasing. In March 2008, 61% of households had mains or bottled gas as an energy source (up from 57% in 2002). The proportion of households using wood as an energy source decreased to 14% in 2008 (down from 18% in 2002).

The main source of energy for cooktops was electricity (56%), with almost all the remainder coming from mains or bottled gas. For room heating, electricity and gas were almost equally preferred (35% and 31%, respectively).

Solar energy is primarily used by households for heating water and was used by 7% of Australian households for this purpose in 2008. The Northern Territory had the largest proportion of households (54%) using solar energy to heat water.

GreenPower refers to electricity generated from approved renewable energy resources such as solar, wind, biomass and hydroelectricity commissioned after 1 January 1997. GreenPower enables consumers to pay a premium for electricity generated from renewable sources. As at March 2009, there were 945,491 household and 38,533 commercial customers paying for GreenPower (Endnote 6).



The graph shows that while household awareness of GreenPower increased to 52% in 2008, only 33% were willing to pay extra for green power. 5% of households were already paying extra for GreenPower in March 2008.



Installing insulation and solar hot water heating help reduce household energy consumption and greenhouse gas emissions. Effective insulation reduces overall energy consumption and helps to limit spikes in electricity demand associated with extreme weather conditions.

The proportion of Australian homes with insulation grew from 52% in March 1994 to 62% in March 2008. This figure is set to rise further in response to the Commonwealth Government’s Energy Efficient Homes Package, which commenced in 2009. This scheme subsidises the installation of ceiling insulation and solar and heat pump hot water systems to replace electric storage systems (Endnote 7).

The proportion of homes with solar hot water heating rose from 5% in 1994 to 7% in 2008, with nearly all this growth occurring between 2005 and 2008. Commonwealth and state government rebates on solar hot water systems may have helped contribute to their increased use.

While solar hot water systems usually require some boosting (electric or gas), they produce significantly less greenhouse gas emissions than electric systems, which depend largely on coal-fired electricity.



The proportion of households using electric hot water systems fell from 51% in 2005 to 46% in 2008. Mains and bottled gas’ share of hot water heating peaked in 2005 (39%) and declined slightly by 2008, to 37%. In 2008, the proportion of households using gas hot water was greater in capital cities (47%) than in other areas (20%), reflecting greater access to reticulated (mains) gas in capital cities. Victoria had the highest proportion of households using gas hot water (two-thirds).


ENDNOTES

1. ABARE, 2009, Energy statistics – historical, Table B, <http://www.abare.gov.au/publications_html/data/data/data.html>, last viewed November 2009.
2. ABARE, 2009, Energy Update 2009.
3. Department of Climate Change, 2009, National Greenhouse Gas Inventory May 2009.
4. ABARE, 2009, Energy Update 2009.
5. ABARE, 2009, Electricity Generation – major development projects – April 2009 listing.
6. NSW Department of Water and Energy, 2009, National GreenPower Accreditation Program Status Report, Quarter 1 2009.
7. Department of the Environment, Water, Heritage and the Arts, Energy Efficient Homes Package, <http://www.environment.gov.au/energyefficiency/index.html >, last viewed October 2009.

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