FactCheck: Have eight of Australia's 12 most emission intensive power stations closed in the last five years?

But in Australia we are seeing a very significant change. We’ve seen eight out of our 12 most emission intensive power stations close in the last five years. All of those have been coal.– Environment and energy minister Josh Frydenberg, interview, September 5, 2016.

When discussing Australia’s commitment to reduce greenhouse gas emissions, environment and energy minister Josh Frydenberg said that that eight out of the nation’s 12 most emission intensive power stations have closed in the last five years. All were coal, he said, describing the pace of change as “very significant”.

Is that right?

Checking the source

When asked for data to support the minister’s assertion, a spokesperson referred The Conversation to the following table:

Let’s test his statement against publicly available data.

Power station closures

Emission intensity is a measure of the greenhouse emissions produced per unit of energy. If a power station produces a lot of greenhouse gases per unit of energy generated, then it is a high emission intensity power station.

It’s true that eight emission intensive power stations have closed in recent years. Sticklers may say that change occurred over six years, not five (depending on when the process of closure began), but it’s close enough.

These power stations closed at a time when electricity demand was falling, although it has picked up again recently.

Are those eight among the most emission intensive power stations in Australia?

They’re in the ball park – although it depends a bit on which power stations you include on the list of “most intensive power stations in Australia”.

Frydenberg’s table includes 12, but his list doesn’t mention two Western Australian power stations – Worsley and Muja AB – which are among the most emission intensive power stations in Australia.

There could be good reasons for omitting these two from the top list. Worsley, for example, is a cogeneration plant, meaning that some of the energy it produces is fed into the electricity network and some is diverted for industrial use by a local alumina refinery in the form of steam energy. Or that list may only be considering the averaged combined emission intensity of the three power stations at Western Australia’s Muja facility (not just the Muja AB station), which would bring the emission intensity down.

The list may also have not included any Western Australian power stations because when people talk about Australian power generation, it’s quite common to use data for the National Electricity Market - which covers all states except Western Australia and the Northern Territory.

In summary – the eight listed as having closed in the last five years are definitely among the top 14 most emission intensive power stations in Australia. They may also be among the top 12, depending on which Australian power stations you include in the list of the nation’s most emission intensive.

How do we know they’re among the most emission intensive power stations?

We know that’s true because of data contained in a recent report commissioned by the Australian Energy Market Operator and undertaken by consulting firm ACIL Allen.

The Australian Energy Market Operator is responsible for operating Australia’s largest gas and electricity markets and power systems. It runs the National Electricity Market, the power system that covers the eastern states of Australia and South Australia. It also runs the Wholesale Energy Market.

We can check Frydenberg’s statement against the most up-to-date data from the ACIL Allen report, which details the emission intensity of various power stations in Australia.

This chart, using the ACIL Allen data, shows the capacity and emission intensity of Australian coal generators with high emission intensity.

Has there been ‘very significant change’ in Australia?

That depends on what you understand by the phrase “very significant”. What we do know is that the closure of these eight power stations hasn’t put a significant dent in Australia’s overall greenhouse gas emissions.

Using publicly available data, we can calculate how many million tonnes of emissions these eight power stations produced back when they were all operating – around five or so years ago.

To do that, you multiply the electricity produced by a power station (measured in gigawatt hours and sourced from here) by that station’s emission intensity (sourced from here and here).

The result? The eight powers stations that closed down produced about 12.7 million tonnes of emissions in 2010-11, and about 10.06 million tonnes of emissions in 2011-12 (after some had either closed or reduced their output).

Australia’s total emissions for 2011 were 544.9 million tonnes. So the eight power stations contributed roughly about 2% to Australia’s 2011 emissions, back when they were all still in operation.

For 2011, the emissions produced by Australia’s electricity sector was 200.5 million tonnes. So as a proportion of emissions caused by electricity generation, the eight power stations were responsible for about 5-6% of Australian electricity emissions in 2011.

The eight plants that closed were all quite small, and consequently made a smaller contribution to the electricity sector’s total greenhouse gas emissions.

The aggregate capacity of the eight closed power stations totalled about 2550 megawatts, and produced 9670 gigawatt hours of energy in 2010-11. In contrast, one of the plants still operating, Loy Yang A, has a capacity of 2210 megawatts and produced 16,880 gigawatt hours in 2010-11.

Verdict

Josh Frydenberg got his figures right on power station closures – but it’s a matter of interpretation whether that represents “a very significant change”.

The minister got it right that eight emission intensive power stations have closed over the last five or six years.

Frydenberg also got it right that these eight were among the top 12 (or top 14, depending on how you measure it) most emission intensive power stations in Australia.

But to put that in perspective, the eight powers stations that closed down produced about 12.7 million tonnes of greenhouse emissions in 2010-11 – or roughly about 2% of Australia’s overall emissions in that year. – Dylan McConnell

Review

This is a thorough and well-explained analysis, using impeccable sources to reach a very fair conclusion. – Hugh Saddler.

Review

This is a comprehensive FactCheck. There are a couple of additional points worth noting here.

The eight closed coal plants were certainly amongst the most emissions intensive in our electricity industry. However, beyond the question of the two West Australian coal plants raised in the FactCheck, the ACIL Allen report highlights the actual uncertainties in calculating plant emission intensities. It also flags the very high emissions intensity of several small distillate (liquid fuel) generators. However, these are used for only peaking duties so make a very minor contribution to overall electricity sector emissions.

Why did they close? A range of reasons, no doubt. Beyond the falling demand for generation over this period and small size of the plants noted in the FactCheck, all but two of the stations were over 40 years old. Their closure might also well be linked to the introduction of a carbon price on the electricity sector in mid-2012 (its removal only two years later was rather unexpected by industry participants).

Finally, there is the question of what replaced the output of these eight emissions intensive generators. Renewable generation has certainly increased over this time under the Renewable Energy Target. Unfortunately for emissions, the last two years have also seen falling gas-fired generation including the temporary closure (cold storage) of one of the National Electricity Market’s most modern and lowest emission fossil fuel plants, Swanbank E. The key reason is much higher gas prices driven by the start of liquid natural gas (LNG) exports from Queensland.

Finally, it is interesting to see that the owners of one of the remaining high emissions coal plants in operation, Loy Yang B, have just applied to upgrade the plant and hence extend its life and generation output. – Iain MacGill

UPDATE: Engie, the firm that owns the Hazelwood power station, announced in November 2016 that it would close the Hazelwood plant in March 2017. Engie also said it has decided to appoint a financial adviser for the possible sale of Loy Yang B coal power station in the Latrobe Valley.

Dylan McConnell has received funding from the AEMC's Consumer Advocacy Panel and Energy Consumers Australia.

Hugh Saddler is a member of the Board of the Climate Institute

Iain MacGill is a Joint Director of UNSW Australia's Centre for Energy and Environmental Markets. The Centre has received funding from a range of government sources including the Australian Research Council, Energy Consumers Australia and ARENA. Iain is a member of the ARENA Advisory Panel which provides advice to support the development and selection of projects and initiatives for funding by ARENA. He also contributes unpaid expert advice to a number of government organisations, industry associations and not-for-profit groups in the clean energy area within Australia and internationally. Iain's share portfolio includes AGL which owns a range of coal, gas and renewable generation in Australia.