Smart grid offers lower costs
The study found that improvements to
efficiency, demand side response, and
cogeneration could be cheaper and less
polluting than building more large,
centralised power plants.
Image: iStockphoto

Building more coal fired power stations is not just bad for the environment it is also bad for NSW consumers’ hip pockets according to a new report published by the University of Technology, Sydney this week.

The study has found that reducing greenhouse gas emissions through energy savings and generating power close to where it is used could cut total power bills in New South Wales by about $600 million per year by 2020 - equivalent to about $60 per household per year.

Details of the study are contained in a report titled Meeting NSW Electricity Needs in a Carbon Constrained World: Lowering Costs and Emissions with Distributed Energy.

Report co-authors and ISF Research Principals Jay Rutovitz (L) and Chris Dunstan
Local energy options could save between $1.4 billion and $3.8 billion between now and 2020 and reduce emissions in 2020 by between 2.2 and 8.4 million tonnes of carbon dioxide per year, according to report co-author and UTS Institute for Sustainable Futures Research Principal Chris Dunstan.

 “Even if we ignore all the economic and environmental costs of greenhouse gas emissions, the more environmental friendly approach is still less costly over the next decade,” Mr Dunstan said.

The report was completed by the Institute for Sustainable Futures (ISF) for the Intelligent Grid (iGrid) Cluster, a three-year national research collaboration between the CSIRO and the university sector funded under the CSIRO Energy Transformed Flagship. The iGrid research program aims to achieve major greenhouse gas emissions reductions by integrating “distributed energy” technologies into a smarter electricity grid.

“This report challenges the common view that  NSW has to choose between cheap but dirty power on the one hand, and costly greenhouse emissions reductions on the other,” Mr Dunstan said.

In 2007, the Owen Inquiry into Electricity Supply in NSW concluded that a new coal or gas-fired baseload power station could be needed by 2013-14 and planning should start immediately. However, since 2007 the forecast growth in electricity demand has fallen, and the Federal Government has adopted a 20 per cent renewable energy generation target. These changes mean that the earliest new baseload power would be needed is 2018, and carrying out cost effective energy efficiency would mean no need for new baseload power before 2020.

The recently announced increase in NSW electricity charges linked to the proposed $17 billion of new network investment means that the potential value of saving energy is now even greater.

The UTS Study looked at five scenarios for meeting NSW electricity needs to the year 2020.   Two involved building more big centralized coal-fired and gas-fired power stations, while three used a range of local distributed energy options such as increased energy efficiency, reducing demand for peak power through “demand side response” and cogeneration (which generates power closer to where it is used and makes use of the waste heat).

“Our study shows that we can reduce emissions from electricity and limit the rise in electricity bills,” Mr Dunstan said.  “However, to do so we need deliberate, coordinated policy from Government to encourage lower cost distributed energy options.”

The report makes a series of recommendations including:

  • The NSW Government should adopt a target of meeting all growth in energy consumption  to 2020 from “green” energy sources: renewable energy, energy efficiency, demand side response, and cogeneration; and
  • The NSW Government should publish a comprehensive annual assessment of distributed energy potential in NSW and plans to tap this potential.

Editor's Note: Original news release can be found here.