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COMPARISON OF THE IMPACT OF CARBON PRICING ON THE USE OF DIESEL EMBEDDED STANDBY GENERATORS AND GRID SUPPLIED ELECTRICITY

on Monday, 12 September 2011. Posted in news

A recent RPS report, commissioned by Velocity Energy, shows that Australia’s proposed carbon tax will not have a material effect on the net price of electricity production from diesel embedded standby generators.

The comparison was based on the emissions of a 1MW generator for run times of between 25 – 150 hours per year (reflecting production of 25 – 150MWh per year) and the energy from the grid required to produce the equivalent energy output. Key findings include:

1 - Diesel embedded standby generators will be exempt from the carbon pricing regime as they produce less than the 25kt CO2-e threshold.

Liquid fuel produced electricity is covered by the Government’s proposed carbon pricing; however, the pricing only applies to facilities producing more than 25kt CO2-e of greenhouse gas emissions. Even at the highest operational usage time modeled in the study (150 hours / year), and using any type of fuel combination, diesel embedded standby generators did not produce more than 109 tonnes CO2-e.

2 - Diesel embedded standby generator produced energy emits less GHGs than coal generated grid energy.

Using any type of fuel, and with the exception of Tasmania, South Australia and the Northern Territory, diesel embedded standby generators produce less GHGs than the grid, specifically:

with diesel:

  • 40% lower in Victoria
  • 18% lower in NSW and ACT
  • 17% lower in Qld

with natural gas:

  • 56% lower in Victoria
  • 40% lower in NSW and ACT
  • 39% lower in Qld

with 100% biodiesel:

  • 99.8% lower in Victoria
  • 99.7% lower in NSW and ACT
  • 99.7% lower in Qld

The differences in GHG reductions across the states reflect the different mix of fuel types and power generation methods to produce grid electricity. For example, low emission hydroelectric power is prevalent in Tasmania, while Victoria uses mostly high emission brown coal.

3 - Grid generated electricity will be impacted by the carbon pricing scheme.

In the first year of operation (2012 – 2013) carbon pricing will add additional costs – over and above normal supply costs –ranging from $6.90MWh in Tasmania to $27.83 in Victoria, $20.24 in Qld, $20.47 in NSW and ACT.  These additional costs will continue to rise each year.

Download the full RPS report here.