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South West Tasmania - Senate Select Committee - Report on Demand and Supply of Electricity for Tasmania and other Matters, dated November 1982, together with Transcript of Evidence (18 vols) [Report only printed]


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The Parliament of the Commonwealth of Australia

SENATE SELECT COMMITTEE ON SOUTH WEST TASMANIA

Report on Demand and Supply of Electricity for Tasmania and Other Matters

November 1982

Presented and ordered to be printed 23 No vember 1982

Parliamentary Paper No. 314/1982

SENATE SELECT COMMITTEE ON SOUTH WEST TASMANIA

REPORT ON DEMAND AND SUPPLY OF ELECTRICITY FOR TASMANIA AND OTHER MATTERS

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE SELECT COMMITTEE ON SOUTH WEST TASMANIA

FUTURE DEMAND AND SUPPL Y OF ELECTRICITY FOR TASMANIA AND OTHER MATTERS

NOVEMBER 1982

Aus t rali an Gove rnmen t Publishing Service , Canberra 1 982

c Commonwealth of Australia 1982 ISBN 0 644 01869 0

Printed by C.J. Thompson, Commonwealth Gov ernment Printer, Canberra

TERMS OF REFERENCE

(a) the natural values of South West Tasmania to Australia and the world; and

(b) Federal responsibility in assisting Tasmania to preserve its wilderness areas of national and international importance, including appropriate financial assistance consistent with the State's development needs and options for the State's

energy requirements.

MEMBERS OF THE COMMITTEE

Senator B.R. Archer, Chairman (Tasmania) Senator the Hon. D.L. Chipp (Victoria) Senator J. Coates (Tasmania) Senator R. Hill (South Australia)

Senator A.J. Missen (Victoria) Senator C.G. Primmer (Victoria)

Former Member of the Committee

Senator J.R. Siddons ceased to b e a member of the Committee on

27 october 1981 and wa s replaced by Se nator the Hon. D.L. Chipp

on the same day.

Secretary

P. Barsdell The Senate Parliament House Canberra

iii

CONTENTS

PART I - THE DEMAND FOR POWER

CHAPTER l - INTRODUCTION Brief History of the Issue Terms of Reference Committee's Approach to the Inquiry Acknowledgements

CHAPTER 2 - THE TASMANIAN ECONOMY AND POPULATION Introduction Problems of an Island State Hydro-industrialisation Future Industrial Development

Population Projections Age Structure of the Population Decentralisation of the Population

CHAPTER 3 - THE EXISTING POWER SUPPLY SYSTEM History and Function of the HEC The Existing System Sanctioned Developments

Projection of total system capacity Energy Use in Tasmania Breakdown of energy use Per capita consumption of energy

Electricity Consumption in Tasmania

CHAPTER 4 - FUTURE DEMAND FOR POWER IN TASMANIA Introduction Major Industrial Load Composition of the major industrial load

Contract system Pricing policy Historical growth of major industrial load Future demand for the MIL General Load

Definition Components of the general load Factors influencing electricity consumption Demand forecasting methodology

HEC forecasts of demand Recent growth in the general load Other forecasts of demand

v

page

l

l

4

7

9

ll ll ll 12 14 15 18 18 21 21 22 30 31 32 32 35 37 41 41 41 41 42 44 45 48 54 54 54 55 58 59 66 68

South West Tasmania Committee (NSW) Tasmanian Wilderness Society (Canberra Branch) Saddler and Donnelly Directorate of Energy Harwood and Hartley Summary of demand forecasts McLachlan Group forecast Factors which may modify demand

Co-generation Energy conservation Forecast of Demand

PART II - SUPPLY OPTIONS

CHAPTER 5 - INTRODUCTION Sources of Electrical Energy Feasibility Technological feasibility

Financial feasibility Economic, social and environmental factors Options Available to Tasmania

CHAPTER 6 - OPTIONS Hydro-Electric Schemes Introduction Gordon-below-Franklin scheme

Gordon-above-Olga scheme Other hydro-electric schemes Pumped storage Thermal power

Introduction A 2 x 200 MW thermal power station

Coal supply and cost Other fuels Magneto hydro dynamics (MHD) Interconnection with Victoria

Introduction HEC proposal Zeidler Committee proposal McLachlan Group proposal Victorian power supply Nuclear Power Solar Power Wind Power

CHAPTER 7 - OPTION COMPARISONS Introduction Cost Comparisons

vi

69 69

71 73 74 75 76 77 77 83 88

97 97 99 99 102 103

104

109 109 109 lll 113 115 117 123 123 123 126 128

131 132 132 134 137 139 140

142 143 146

151 151 152

Cost comparison methodology Discount and interest rates Cost escalator, capacity factor and conversion efficiency HEC cost comparisons Cameron, Preece International review Other cost comparisons

McLachlan Group cost comparisons Other Economic Considerations Flexibility and risk Effects of HEC funding

Flow-on effects of intra-state spending Employment Conclusions

CHAPTER 8 - SUPPLY STRATEGY

PART III - OTHER MATTERS

CHAPTER 9 - ARCHAEOLOGICAL SIGNIFICANCE OF THE GORDON/FRANKLIN AREA

CHAPTER 10 - FEDERAL GOVERNMENT CONSTITUTIONAL AND LEGAL INVOLVEMENT

The Commonwealth's Obligation to Intervene Commonwealth Constitutional Powers Commonwealth power to legislate Powers under existing legislation

Fiscal powers Conclusions

PART IV - CONCLUSIONS

CHAPTER 11 - CONCLUSIONS

DISSENTING REPORT BY SENATOR B.R. ARCHER

REFERENCES

APPENDIX I RESOLUTIONS OF THE SENATE RELATING TO THE COMMITTEE

vii

152 152 155

157 162 163 167

172 172 174 17 8 179 186

189

199

205

206 210 210

214 215 216

219

225

229

237

APPENDIX II LIST OF WITNESSES WHO APPEARED BEFORE 241 THE COMMITTEE

APPENDIX III LIST OF PEOPLE AND ORGANISATIONS WHO 245 PROVIDED THE COMMITTEE WITH SUBMISSIONS OR OTHER WRITTEN MATERIAL

APPENDIX IV ABBREVIATIONS 261

APPENDIX v GLOSSARY OF TERMS 263

viii

PART I

THE DEMAND FOR POWER

1.3 In 1979 the Hy dro-Electric Commissi o n (HEC) publishe d

the Gordon River Power Development Stage Two' in this Report as the 'HEC 1979 Report'). In the

its 'Report (referred to on report, the HEC recommended, among other things:

' ( i) that the future increase in demand for

electricity at least up to the year

2000 be met by the continuing

development of the State's water power resources in the form o f the Integrated

Development of the Lower Gordon,

Franklin and King Rivers.

(ii) the approval by Parliament of the

construction of the first stage of the

Integrated Development the Gordon

River Power De v elopment Stage Two; •l

1.4 After receipt of the HEC's report the Tasmanian

Government established the Co-ordination Committee on Future Power Deve lopment to examine the report and to make

recommendations to the Government o n future power d e velopment. Th e Co-ordination Committee receive d submissions from v arious

Tasmanian Government departments and authorities and from the general public. A majority of the Committee, in its report of

Ma y 1980 to the Premier, recommended the con s truction of a

200 f1W coal-fired thermal station to be completed by 1985 as

well as, in a second stage, a hydro-electric sche me to become

operational in the mid 1990s. It deferred to the Gov e rnment the

choice of a hydro-electric scheme.

1.5 The Government considered the reports of the HEC and

the Co-ordination Committe e in July 1980 and finally decided t o reject the HEC's recommendation for the Gordon-below-Franklin scheme and to opt instead, as a compromise, for the Gordon­

abov e-Olga scheme. The HEC had included th e Gor d on-abov e -Olga sch e me in its 1979 Report but had stated its preference f o r th e

Go rdon- bel ow-Franklin scheme. The Go ve rnment al so rej e ct e d th e

Co-ordination Committee's recommendation for a coal-fired

th e rmal station and announce d the establishme nt of th e Wil d

Ri v ers National Park which included the Franklin River.

2

1.6 A Bill was introduced and passed in the House of

Assembly to give effect to the Government's decision. However, the Legislative Council, having had a report from its Select

Committee on Future Power Development recommending support for the Gordon-below-Franklin scheme, refused to pass the Bill.

1. 7 In the ensuing period both Houses of Parliament

remained deadlocked. Eventually the Government decided to hold a referendum on 12 December 1982 to seek the views of the public

on the issue. In spite of considerable public opposition to any

dam on the Gordon River, the Government restricted the options

on the ballot paper to a choice between the

Gordon-below-Franklin scheme and the Gordon-above-Olga scheme. Voters were not given the choice to vote against both dams. In

the campaign leading up to the referendum, opponents of both

dams encouraged people to write 'no dams' on their ballot

papers. The official results of the referendum were:

Total Gordon-above-Olga vote

Total Gordon-below-Franklin vote

Total Informal

9.78 per cent

54.72 per cent

35.50 per cent

A total of 84 514 (33.25 per cent) ballot papers were endorsed

with 'no dams' including 2648 for which a valid preference had

also been given for one of the options.

1.8 On 15 December 1981 the Tasmanian Parliament was

prorogued until 26 March 1982. At the end of a long debate on 26

March 1982 the Government lost a motion of no confidence and

elections were subsequently announced. The elections held on 15 May 1982 resulted in a change of government. Another Bill, this

time approv ing the Gordon-below-Franklin scheme, was passed by the Parliament on 1 June 1982.

3

Terms of Reference

1. 9 On 23 September

Committee on South West upon:

1981 the Senate appointed the Select

Tasmania to inquire into and report

1.10

'(a) the natural

Tasmania to

world; and

values of

Australia South and West

the

(b) Federal responsibility in assisting

Tasmania to preserve its wilderness areas of national and international importance, including appropriate financial assistance consistent

with the State's development needs and options for the State's energy

requirements.'

There are several words and phrases within the above

terms of reference which require definition by the Committee.

1.11 In part

'natural values' things which are

(a) of the terms of reference, the phrase

is regarded by the Committee as meaning all

of worth, desirability or utility which e xist

naturally in South West Tasmania. This can be taken to include

the fauna and flora, the beauty of the landforms, as well as

things which have a commercial value such as minerals and

timber.

1.12 The Committee found that there was not unanimity of

opinion as to what constitutes the area known as South W e st

Tasmania. This problem was faced by the South W e st Advi s ory

Committee, under the chairmanship of Sir George Cartland, which recomme nded the area shown in Figure 1.1. In its Preliminary

Re port dated 28 May 1976, the Ad v isory Committee stated:

'In choosing this areas (sic) the Committee

is conscious that it embraces an area much

larger than that which is dealt with in the

Draft Management Plan and an area north of

4

the Lyell Highway which is not generally

regarded as part of the South West. However,

the Committee believes that its approach to

this matter is such that the entire area can

be properly and responsible (sic) considered for integrated planning from the point of

view of both development and the Tasmanian

National Park System. •2

1.13 In its final report dated 29 August 1978, the Advisory

Committee confirmed its earlier choice of the area to be

regarded as South West Tasmania. It stated:

1.14

'In our Preliminary Report, we indicated that we believed that the area referred to in

paragraph 26(11) of that Report was the

appropriate area to be considered for zoning in accordance with the proposals in it.

Having exposed that proposal to public

examination and comment, we are confirmed in our opinion that this area together with part of Macquar ie Harbour is the appropriate area for the proposals contained in this Report.

This area is referred to, in this Report as

South West Tasmania and is shown on the

attached map (Appendix D). The area generally is of high aesthetic value and extends from

the Cradle Mountain Lake St Clair National

Park in the north to the South west National

Park in the south. The appropriateness of

considering this area as a unit from the

point of view of natural values and

conservation was endorsed by many witnesses. There was no serious challenge to this point

of view although, of course, many other

witnesses argued that for other reasons the

area should not be subject to any further

controls than currently existed. •3

This definition of South West Tasmania received further recognition on 16 July 1980 when the South west Conservation

Area was proclaimed. The Commonwealth and Tasmanian Governmen ts also used this definition for the South West Tasmania Resources Survey which they jointly funded.

5

1.15 In view of the recognition given to the South West

Advisory Committee's definition of South west Tasmania, the

Select Committee decided to adopt it for the purposes of the

inquiry.

1.16 Notwithstanding the Committee's definition of south west Tasmania, reference refers to 'wilderness

part adoption (b) of

of

the the above

terms of

international importance'. In Government proposed the Western

areas

November Tasmanian

of

1981

national and

the Tasmanian Wilderness Na tional

Parks to the Commonwealth Government for nomination to the world Heritage List. This area consisted of the South West National

Park, the Franklin-Lowe r Gordon Wild Rivers National Park in South West Tasmania) and the Cradle Mountain-Lake St National Park. As the Commonwealth Government accepted

(both Clair the

nomination and forwarded it to UNESCO Headquarters in Paris, the Cradle Mountain-Lake St Clair National Park may be regarded as a wilderness area of national and international importance , and hence comes within the scope of the inquiry under part (b) of

the t e rms of refer ence.

1.17 Under part (b) of the terms of reference, the Committee

is required to inquire into 'Federal responsibility in assisting Tasmania to preserve its wilderness areas of national and

international importance'. Any land use within these wilderne ss areas which might in any way threaten their preservation com es within the scope of the inquiry. Therefore such activities as

mining, logging, recreation and tourism as well as pow er

developments in those areas are subject to the scrutiny of the

Committee.

1.18 The second half of part (b) of the terms of ref e rence

requires the

'development Committee needs' and

to take

'options into for account Tasma ni a ' s

th e State 's energy

requirements'. Because the Hyd r o-Electric Commission in it s 'Report on the Gordon Ri ver Power De velopment Stage Two' deals

6

with power demand and supply until the year 2000, the Committee decided to confine its investigations generally to the same

period.

Committee's Approach to the Inquiry

1.19 Although the debate on future power development is

taken by many witnesses to be an environmental issue, many of

the critics of further hydro-electric development questioned the need for more power and the alleged economic and financial

advantages of hydro-electricity over other forms of power

generation. They argued that, environmental issues aside, there were good reasons for either postponing a decision on future

power development or opting for an alternative means of

generation.

1.20 The Committee decided that it should first establish

whether further increments of power would be needed up to the

year 2000 and then it should do a comparative technical,

financial and economic study of the feasible options. If this

study confirmed that the HEC' s analyses had been of the right

order, the Committee would then consider whether the expected economic benefits attributed to the scheme would outweigh the environmental damage it would cause and the steps that the

Commonwealth Government should take in this matter.

l. 21 Advertisements were placed in the Tasmanian and

mainland press in November 1981 calling for written submissions. The Committee also solicited written submissions from a wide

range of government, business, environmental and other community organisations which the Committee thought might make some

contribution to the inquiry.

l. 22 The Committee's call for written submissions was met

with a good response from around Australia. A total of 746

submissions was received, of which 606 came from the mainland

7

States and Territories and 140 from Tasmania. Victoria provided 278 submissions, South Australia 156, New South Wales 79 and the

other States and Territories 93 among them.

1.23 J.I'Iost of the submissions wer e received from individuals

(562) while 143 submissions came from the community groups and trade unions category, 20 from Commonwealth, State and local

governments and their instrumentalities and 21 from industry.

1.24 Canberra, Emphasis Committee

The Committee conducted public hearings in Hobart,

Sydney and Nelbourne beginning on 4 February 19 82.

was placed on calling witnesses who could help the

examine demand and the supply options, in line with

the Committee's earlier decision to concentrate on these areas first. In all, public hearings were held on 17 days.

1.25 In Decembe r 1981 the Committee visited Lake Gordon and

Lake Pedder and associated darns and power stations. It also

inspected part of the new Piernan hydro-electric scheme on the

west coast of Tasmania.

1.26 On 3 March 1982 the Committe e made an aerial inspection

of South West Tasmania by helicopter, with particular emphasis on the Franklin and Gordon Rivers. The helicopters landed twice on the banks of the Franklin, once at the foot of the Newlands

Cascades and once near Fraser Cave . The latter stop was made to

allow the Committee to inspect the cav e and receive explanations on the archaeological finds and the work being done there from

the archaeological team on site.

1. 27 The Co mm ittee also engaged a firm of consultants,

f1cLachlan Group Pty Ltd, to assist it in some of the technical

and economic aspects of the inquiry.

8

Acknowledgements

1.28 The Committee wishes to thank all the people and

organisations who have contributed so far to the inquiry by

making written submissions or appearing as witnesses in public hearings. The Committee also expresses its gratitude for the

work done by its secretariat, Paul Barsdell (Secretary), Pippa Carron and David Nimmo (Research Officers) and Annette Fischer (Steno-secretary), in this complex and lengthy inquiry. The

Committee also thanks its consultants, McLachlan Group Pty Ltd, for their reports and other information prepared for the

Committee.

9

CHAPTER TWO

THE TASMANIAN ECONOMY AND POPULATION

Introduction

2.1 The Tasmanian economy is inextricably linked with the

State's electricity generating system through the presence of a number of energy intensive industries. These industries use

about two-thirds of the State's electricity, and they also make a significant contribution to the Tasmanian economy. Any

consideration of Tasmania's future power needs cannot therefore be divorced from industrial and commercial development in the State. This chapter therefore discusses briefly aspects of the Tasmanian economy which impinge on future power needs, to

provide a context in which to consider the future d ema nd for and

supply of electricity. It also examines population projections for Tasmania and the changing age structure of that population. Population is an important factor in electricity demand

forecasts and is discussed in Chapter Four.

Problems of an Island State

2.2 The phrase 'the barrier of Bass Strait' encapsulates

the feeling many Tasmanians have about the Sta te's separation from the mainland. The separation has cause d numer o u s social and economic problems for Tasmania, especially in relation to the

cost and reliability of the interstate fr e ight and passenger

transport system.

2.3 In the last ten years there have been many inquiries

into the problems of freight and passenger transport across the Bass Strait. One of these inquiries , the Comrr.ission of Inquiry

11

into Transport to and from Tasmania under the chairmanship of Mr J.F. Nimmo (1976), found that there were a number of

disadvantages in locating a business in Tasmania. These included the costs and delays of having to use sea transport to import

raw materials and to send goods and produce interstate, higher inventory costs, the emigration of skilled labour and the small local market existing in Tasmania.l

2.4 As

Commonwealth a result of the Commission's findings, the

Government introduced the Tasmanian Freight

Equalisation Scheme to alleviate some of the disadvantages faced by businesses in Tasmania.

2.5 In 1977 the Commonwealth Government commissioned Sir

Bede Callaghan to inquire into the structure of industry and the employment situation in Tasmania. He reiterated the Nimmo

Commission's findings on transport disadvantages and drew

attention to other economic problems facing Ta smania, including the small size of the economy, the local market and the revenue

base. These problems, together with the transport difficulties, have discouraged the establishment of large-scale manufacturing industries in the State and have, therefore, restricted the

avenues available for industrial development.

2.6 Although some of the Callaghan recommendations for

assisting the Tasmanian economy have been adopted, the same

fundamental problems which hav e confronted Tasmania in the past are still relevant today.

Hydro-industrialisation

2. 7 Tasmanian governments have, for a long time, sought to

exploit the available natural resources to form an industrial base for the State's economy. Encouragement was given to the

development of the abundant forest resources and of mineral

deposits found in the State. It was, however, the harnessing of

12

the State's water resources to provide cheap hydro-el ectric

power that gave real impetus to industrial development .

Tasmanian governments sought on the one hand to combine the

exploitation of mineral and forest resources with that of its

water-based power resource and, on the other hand, to use the

offer of cheap power to encourage energy intensive industries to establish plants in Tasmania to process mainland ore. This

resulted in Comalco, Temco and EZ Industries (70 per cent of its

ore is imported) establishing processing plants in the State.

2.8 The policy of using cheap hydro-electric power to

attract industry to the State became known as hydr o-

industrialisation. The extent to which this policy has been

developed is evident in the fact that, in 1982, two-thirds of

the State's electricity is c o nsumed by the 16 major industrial

load users.

2.9 Both Sir Bede Callaghan in his report and th e

Department of Industrial Development in i ts submission t o th e

Committee commented on Tasmania's narrow industrial struc tur e based on exploitation and first stage processing of natural

resources. The narrowness and nature of that stru cture and its

dependence on export markets has made it more susceptible to the vicissitudes of national and ov erseas economie s. The closures, curtailment of production and retrenchments within those

industries in the 1982 economic reces s ion are ev ide nce of this.

2.10 The Department of Industrial Development emphasised,

however, the importance of the contribution of the major

industrial load companies to the Tasmanian economy. It estimate d that approximately 30 000 people were dependent o n that sector for either direct or indirect employment in 1977-78.2 For towns like Queenstown and George Town, their well-be ing depe nd ed

largely on the fortunes of one or two lar ge compa n i e s.

13

2.11 In recent years the policy of hydro-industrialisation

has come under increasing criticism because it has not attracted new industries to the State and expansion of existing industries

has done little to ameliorate Tasmania's serious unemployment situation. Opponents have also pointed to the limited amount of potential hydro-electric development left in the State. With much of that power de signa t e d by the HEC for th e general load,

relatively little hydro-electric power could be spared for new energy intensive industries.

2.12 The former Tasmanian Government supported hydro-

industrialisation, but it told the Committee that it was opposed to the establishment of any more energy intensive companies

which were not based on Tasmanian resources.3 The current

Government's view on this point is not known.

Future Industrial Development

2.13 The Department of Industrial De velopment estimated that to achieve full employment by 1991, an additional 40 000 to

45 000 jobs would have to be created. This estimate included the

19 000 people unemployed in January 1982 and 23 600 people who,

on the basis of the number of children already at school, are

expected to join the workforce by that time.4

2.14 The Departme nt advocated the broadening of the

industrial base to increase the opportunities for employment and to lessen the impact of fluctuations in export markets on the

economy. It emphasised the need for an expansion of the base

productive sector (mining, agriculture, manufacturing, forestry and fishing) including down- s tream o r value-added processing and the establishment of high technology industries whose products could be easily transported from 'l'asmania.S It also supported

the creati on of new labour inte nsive industr ies6 and further

growth in the tertiary sector, especially in touri sm . 7

14

2.15 Both Sir Be de Callaghan and the Departmen t of

Industrial Development believed that the State should encourage efficient industries and businesses which could take advantage of available resources and exploit new technologies.8

2.16 The research and initiatives being undertaken by th e

Department in furthering these goals were documented in its

submission to the Committee.9

Population Projections

2.17 The National Population Inquiry (1975), chaired by

Professor W.D. Barrie, made projection s f or Tasmania's

population to the year 2000 based on 1971 population data. These are reproduced in Table 2.1

2.18 In its 1979 Report, th e 1:-iEC pointed out that actu a l

population between 1971 a nd 1978 had incr ea sed at a faster rate

th an forecast by Professor Borrie. It went en to s tate:

'The r e cent population increase appear s to

provide evidence that Barrie's projection may be exceeded. Whether thi s will be so in the

long term will depend on many factors. For

the purpose of the (demand) foreca s t it has

been assumed that the present rate of growth

will taper off so as to reach th e Barrie

Figure by the year 2000. •10

No reasons were given by the HEC in its Report why it expected

the growth rate to taper off. The HEC' s population projections

for Tasmania ar e contained in column 4 of Tabl e 2.1.

2.19 Th e HEC also drew attention to the projecti on s of the

Australian Bureau of Statistics in 'Pr o jections of the

Population of the States and Territories of Australia 1978-2021' (May 1981). Th e four projections ranged f rorr, just above t hose of Professo r Barrie to 7.7 per cent higher at the yea r 2001.11

15

Table 2.1: Tasmanian Population 1971 to 2001

Tasmanian Population

Year at 30 June

Borrie Projection (

1

000)

Col. 1

1971 390.4

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 417.9

19 82 1983 1984 1985 1986 1987 1988 1989 1990 1991 445.4

1992 1993 1994 1995 1996 1997 1998 1999 2000

2001 462.4

Tasmanian "Mainland" Inferred Borrie Projection

(I 000)

Col. 2

386.46 (389 .24) 392.01 (394. 79) (397.56) (400.34) (403.12) (405.89) (408.67) ( 411. 44)

414.22

441.82

458.72

Tasmanian "Mainland" Actual Population 30 June

(

1

000)

Col. 3

386.46 388.49 391.94 395.55

400.94 403.63 407.05 410.12

Source: HEC 1979 Report, Appendix II, p.l8.

Tasmanian "Mainland" Population Used for Forecast

(I 000)

Col. 4

413.1 415.9 418.7 421.4 424.0 426.6 429.1 431.6 434.0 436.4 438.7 441.0 443.2 445.3 447.3 449.2 451.0 452.7

454.2 455.6 456.8 457.8 458.7

2.20 Recent figures from the 1981 Census of Population and

Housing confirmed that the growth of the Tasmanian population is exceeding that of the Borrie projections. According to the

Census, Tasmania (including the Bass Strait Islands) had a

population of 418 957 compared with the Borrie projection of

417 900 for that year.

16

2.21 Other organisations have also regarded the Borrie

projections as being too low. The Department of Industrial

Development stated in its submission to the Committee that part of its responsibility was to prepare and publish population

projections for Tasmania. It forecast that the population would rise from a level of 423 400 in 1981 to 477 500 in 2001, which

is higher than the Borrie projections.l2

2. 22 The Directorate of Energy in a report to the

Co-ordination Committee on Future Power Development in May 19 80 based its population projections on a report of the former

Commonwealth Department of Environment, Housing Development (DEHCD), 1977, which predicted that and the

Community Tasmanian

population would grow at an average annual rate of 1.1 per ce nt

f rom 1977 to the year 2000 (compar ed to Barrie's rate of 0.5 per

cent) at which time Tasmania would have a population of

527 835.13 The Directorate stated in its report that it assumed

that the Borrie projections represented the lowest limit and the DEHCD projection the highest population.l4

2.23 At the present time all the indications point to the

continuation of actual population exceeding the Borrie

projections in Tasmania. There is no evidence to support the

HEC's assumption that the population growth rate will taper off so that Barrie's projection for the year 2000 will be realised.

Howe ve r, circumstances may change in the future to either

accelerate or slow down the population growth rate. If, for

example, the Tasmanian economy does not recover from its prese nt recession within the next one o r tw o years and unemployment

increases, emigration may increase thereby reducing the

population growth rate. Because of the imp ortance of the

population growth rate in forecasting demand for the general

load, this element of unpredictability has to be taken into

account in making demand projections.

17

Age Structure of the Population

2.24 The Department of Industrial Development drew the

Committee's attention to the changing age structure in Tasmania. Between 1979 and 2000, there will be a noticeable ageing of the

population. This is shown in Table 2.2

Table 2.2: Changing Age structure of the Tasmanian population

Age Grou,p

0-14 15-44 45-64 65 +

All groups

% Change in Size of Age Group

1979 - 2001

8.1

+ 11.4 + 35.8

+ 49.6

+ 14.3

source: Evidence, p,2525

The Department went on to say:

'To summarise, the numbers of consumers is

(sic) growing and these consumers are likely

to consume more electricity per capita

because this growth is reflected most in the

older age groups. This change in age

structure will contribute to lower occupancy levels, tl::us increase the stock of dwellings

and alter the discretionary purchasing power of the community•.lS

Decentralisation of the Population

2.25 In th e mainland State s of Australia, the majority o f

p eople live in the capital cities. The Tasmanian population is

more decentralised, spread among the three main regions. In 1980 the estimated population was 199 880 in the Southern Region,

18

including Hobart; 114 490 in the Northern Region (including

Launceston); and 104 260 in the Mersey-Lyell Region (including the North West and West Coasts). There were also 3700 people

living on the Bass Strait Islands. Only 75 per cent of

Tasmania's population live in urban areas (defined as having a population of a minimum of 1000 persons) compared with between 80 and 90 per cent in other States. This dispersed population

reflects the patterns of historical growth as well as industrial and rural development.

2.26 Sir Bede Callaghan mentioned some disadvantages flowing from the decentralised nature of the population. In particular, specialist skills and equipment are thinly spread around the

State, some areas are poorly served with intra-state and

interstate transport services and the frequency of shipping

services has suffered from the multirlicity of ports.

19

CHAPTER THREE

THE EXISTING POWER SUPPLY SYSTEM

History and Functions of the HEC

3.1 In 1895 the fir st public hydro-electric power sc heme

became opera tional in Tasmania when the La uncest on Ci t y Council

opened the Duck Reach Power Station on the South Esk River. In

1911 the Hydro-Electric Power and Metall u rgical Company planned the first s i gnifica nt h ydro- e l ectri c scheme t o e xploit the

waters of t he Gr eat Lak e fo r the purposes of hydro-electric

power generation. However , before c onstructi on began the State

Government purchased the Company a nd for med the Hydro-Electric Department. The t wo generators at 'tladdamana on the Great Lake

were opened in 1916 and provided e l ectr icity for Hobart.

3.2 Fr om the opening of th e vJa ddamana p ower stat i o n until

the present, the Hydro-Electric Department and its successor , the Hydro- El ectri c Commissi on , have deve l oped an e l ectric power generating system base d mainly on the Sta t e 's water r esour ces.

3 .3 In i ts 192 8 Annua l Report , the Departmen t recommended

that the Government form the Hydro-Electric Commission with

specific powers to ma intain and develop t he State's e l ectric

power needs. The necessary le g islation was passed in 1929 and

the HEC wa s fo rmed in early 1930.

3 . 4 The Hydro-Electric Co mm i ss ion Ac t 1929 ga ve the 1-i EC

wide p owers over the developmen t of the Sta te's electri c ity

gene rating sys t em a n d , because of t he predom i nance of

hydro-electric development in tha t system, over the wa t e r

res ou rces of Tasmania . Th e Act also made the HEC an autonomous

s t atutory au th ority ab l e t o f u nct i on as a ope r at i on .

2 1

3.5 The Minister responsible for the HEC was able to call

for information on the running of the Commission but could not

direct the activities of it. In 1979 the Act was amended to

bring the Commission under general ministerial control by

requiring it to respond to ministerial directives and government policy decisions with certain qualifications. Provision was also made for appeal by the HEC to the Governor against ministerial

directives.

3. 6 The Commission consists of one full-time Commissioner

and three part-time Associate Commissioners. Under their

direction the Commission operates five branches dealing with all aspects of the Commission's operations.

3. 7 Before any new power development is undertaken by the

Commission, it is required to present a report to the Parliament outlining its cost, financial implications and technical

details. Construction of the power development may commence only after parliamentary approval has been obtained. However,

preliminary surveys, designs and planning are carried out prior to parliamentary approval to enable a detailed report to be

presented to the Parliament.

The Existing System

3. 8 The system, before the commissioning of the Mackintosh

power station in the Pieman scheme, consisted of 23 hydro­

electric power stations supplemented by two oil-fired thermal generators situated at Bell Bay. The hydro-electric system uses water from five catchment areas: the Great Lake, the Derwent,

the south Esk, the Mersey-Forth and the Gordon (see Figure 3.1).

22

"' 0 c.

\

source:

Figure 3.1: The Tasmanian

. Year Book, Ta sman l an 19 81 ,

23

p.

t . g S;t:stem Genera 1D

252 .

3.9 There are two basic types of hydro-electric stations:

run-of-river and major storage.

3.10 Run-of-river stations use the flow of the river to

drive the generators. Some river storage helps to maintain a

regular flow but, overall, Tasmanian rivers have relatively

steady discharge characteristics. Most Tasmanian hydro-electric stations are of this type.

3.11 Tasmania 1 s two major storage stations are Poatina and

Gordon Stage One.

1

These stations are based on hydro-electric schemes with large water storage back-up and either have additional machine capacity well in excess of that required for average

catchment yield, as in the case of Poatina,

or have provision for further capacity such

as Gordon Stage One. In times of low seasonal

flows or drought, additional water can be

released from storage to make up deficiencies in the energy output from run-of-river

stations. In times of excess rainfall, water

can be retained in these storages while the

system load is largely met by the above

average output from the run-of-river

stations. A third function of storage power stations is to supply peak capacity for the system, a

role which has not been of great concern in

the past, but will become increasingly

critical if the system expansion is

predominantly by increasing generation from thermal power stations. ll

3.12 Power station energy production for each station and

the total system in 1981-82 is shown in Table 3.2.

3.13 Predominantly hydro-electric power systems different characteristics from systems dependent power.

24

have very

on thermal

'In a mainly thermal generating system the

ability to supply energy (measured in

kilowatt-hours) is directly related to the

installed capacity of the generating plant

(measured in kilowatts). Provided that

sufficient fuel is available, the only

limitation on the production of energy is the size of the plant and its losses. Similarly,

expansion of the system is limited only by

the generating plant which has to be

installed to match the increasing demand.

However, in a predominantly hydro-electric system the installed capacity of the

generating plant in the power stations is

less important. The dominant factor

controlling the ability of the system to

satisfy requirements is the energy output

from the water available to the power

stations. •2 'The nominal peak capacity of the station

takes account of the conditions under which

the machines may operate and is a measure of

the reliability to be expected from the

station, when all the machines are on maximum output. It can be more or less than the

installed capacity depending on whether the machines can be run on over load, and whether

the operating head on the station is reduced

by the lower level in the head pond and the

higher level in the tailrace when all the

machines are running together. •3

3.14 The HEC went on to say that the nominal peak capacity

of the system is less than the sum of the nominal peak

capacities of the stations. This is due to the need to have

reserve plant to allow for normal maintenance or for unexpected outages. Table 3 .l shows the installed c apacity and the nominal peak capacity of each existing station in the system and Table

3.2 shows power station production of energy. The system peak

capacities are shown in Table 3.3.

25

Tal;!J, e 3.1 - De t a i l §

Capacity (Megawa tts )

Powe r Station Yea r of Numb e r

Commi ssi oni ng of I nstalled Normi nal Peak

M achine s

Ea ch Ea ch

M a chine Stati on Mach i ne Sta t i on

Tarraleah 193 8 6 15.0 90 .0 13 80

Waddamana ' B' 1944 4 12 . 0 48.0 10 40

Butlers Gorge 19 51 1 12. 2 12 .2 7 7

Tungatina h 19 53 5 25. 0 125. 0 26 132

Trevall yn 1955 4 20 . 0 80. 0 19 75

La ke Echo 1956 1 32. 4 32. 4 32 32

Wayati nah 195 7 3 12 .7 5 38 . 25 14 41

Liapoo tah 1960 3 27. 9 83 .7 28 83

Ca t agunya 1962 2 24 . 0 48 . 0 23 46

Poatina 1964 6 50. 0 30 0 .0 57 342

Tods Co r ner 1966 1 1. 6 1. 6 0 0

Me ad ow bank 1967 1 40. 0 40 .0 41 41

Repulse 1968 1 28 . 0 28 .0 32 32

Cl uny 1968 1 17. 0 17 . o 18 18

Row allan 1968 1 10 .45 10 . 45 5 5

Lemon thyme 1969 1 51. 0 51. 0 57 57

Devils Gate 1969 1 60 . 0 60 . 0 63 63

Wilmot 197 1 1 30 .6 30.6 30 30

Ce thana 197 1 85 . 0 85 . 0 93 93 Pa l oona 1972 28.0 28 . 0 32 32 Fi sher 1973 43 . 2 43 . 2 45 45 Co r don Stage I 1978 2 144. 0 288 . 0 115 230 Comm i s sioned Hyd r o Syst em 48 1540 .4 1524

Bell Bay The r mal Pow e r Station 197 1 2 120 . 0 240 . 0 11 3 226

Total Commiss i oned System as at June, 1979 50 1780 . 4 17 50

Sou rce : HEC 1979 Report Appe ndix I , p. 9.

2 6

3.2;

frQQUQt 1

on

King

ang

Elinders

l§langs}

ENER

GY

AVERAG

E L

OAD

PEAK

LO AD

LOAD

F AC

TOR

(MW.

h)

( HW)

(H W)

(p.c.)

S TATION

1 980

- 8 1

1 98

1-82

1 98 0-

8 1

1 98

1-82

1 98 0-

8 1

1 98

1-82

1980 - 8 1 1

98 1-82

Waddam

a n a

6 798 5 247

0.8

0.6

40.0

2 0.0

2 3

B utler

s Gorge

55

8 60

73

377

6.4

8.4

15.2

1 2 .6

42

67

Ta rr

aleah

606

86 5 589 8

62

6 9.3

6 7.3

9 1.0

9 1.

0

76 7 4

Lake Ec h o

84

2 7 2

82

010

9.6

9 .4

33 . 0 3

4. 0

29

28

Tu ngat

i nah

623 2 7 9 588 7 2 4

71.

2 6

7. 2 1 32

.5

1 32

.5

54

5 1

Liapootah

481

073

47 1

37 5 5

4.9

53 . 8

86 . 0

86 . 0

6 4 6 3

W a yati

nah

2 4

92 9

2 7 0

511

2 6.8

3 0.9

4 3 .5

4 3 .0

6 2 7 2

Catagun

ya

260

401

252 894

29.7

2 8.9

49.0

48.0

61

60

Re pul

se

1 77

30 6

1 6 4

931

2 0.2

18 .8

32 .5

32 . 0

62

5 9

Cluny

103

690

9 5

60 5

11.8

1 0.9

1 9.

0 1

9.0

6 2 5 7

rv

Meado w ba n k

2 11

779 1

96

22 4 2

4. 2 22

.4

4 2.

0 4

3. 0 5 8 5 2

--.)

Poat

i na

940 9 1 0

1

026

737 107.4 117. 2

3 40.

0 3

44.

0

32 3 4

T re v a l l y n

442 9

47

416

3 59

5 0.6

4 7.5

8 4.5

8 5.

0

6 0

5 6

Tods

Co r n

er

7 2

79

4 942

0.8

0.6

1.4 1.4

57

43

F isher

2 44

9 31

2 41

7

46

28.0

27 .6

47.0

4 6 .0

6 0 6 0

Ro w

allan

44

863

48

142

5.1

5.5

11.

2

11. 0

4 6

5 0

Lemon t h y m e

326 5 4 8 3 1 9

439

37 .3

36 . 5

59 .0

59 .0

63

62

Wil m o t

1 49

835

136

305

17.1 1 5

.6

33 .0

33 .0

52

47

Cethana

457

927

4 43

4 00

52 . 3

50 . 6

98 . 0

96 . 0

53

5 3

Dev

il &

G a te

291

76 4 3

17

3 97

33 .3

3 6.2

6 6.0

66 .0

50

5 5

P a loona

1 40

8 90

14 2 325 16.1

16.2

3 3.0

3 4.0

49

48

Go rdon

1 892

66 7 1

631

3 87

2 16.1 1

86 .2

309

.0

3 01.0

70

6 2

Be l l

Bay(Thermal)

159

950

426

8 76

18 . 3

48 .7

120 . 0

1 21

. o

1 5

40

Mt

L ye

ll (lmpo

r t)

4 3 4 5 4 393

0.5

0. 5 6

.0

7 .0

8 7

Mack

in tos

h

-

85

7 4 8

-

2 7.5

-

8 8 .0

-

3 1

SYSTEH

7

951

108

8

035

956

907.7 917.3

1225.4

1241.1 74 74

So ur

ce ; H E C

Ann

u a l R

eview

198

1-82

,

p.

2 .

Table 3.3: System Peak Capacities

Contribution

Nominal Peak Capacity of hydro-electric plant

Nominal Peak Capacity of Bell Bay thermal plant

Total System Nominal Peak Capacity

Allowance for necessary routine maintenance

Allowance for spare plant

Total deduction for system requirements

Effective Peak Capacity of System

Source: HEC 1979 Report, Appendix I, p, 10,

3.15 The average energy output over

hydro-electric generating system, which kilowatt-hours (kWh), is termed the assessed

Peak Capacity (Megawatts)

1524

226

115

228

the life of the

is measured in

long term average

hydro energy output (ALTAEO). This energy output is assessed

under average conditions and may not be reached during a drought or when river flows are below average. To ensure a reliable

supply of electricity under all conditions, the energy output

needs to be 'firmed up' by major storages or thermal generation. The reliable or firm energy output is termed the assessed

average capacity of the system. Table 3. 4 shows the ALTAEO and

firm energy capacities of the system in 1979.

28

Table 3.4: System Average Energy Capacities

Energy Output

System Configuration

Million (kW. h) per annum

Megawatt s Average

System Average Capacity with no thermal generation (firm energy)

Assessed Long Term Average Hydro Energy Output (firm plus non-firm energy)

System Av erage Capacity with maximum thermal generation (firm energy)

7 481 854

7866 898

9049 1033

Source: HEC 1979 Report, Appendix I, p. 12.

3.16 The Great Lake and Lake Gordon are the two major

storage lakes in the system. As at 30 June 1979, the stored

energy in these two lakes amounted to 8687.4 gigawatt-hours

(GWh) out of a system total of 11850.1 GWh.4

3.17 Since 1964 the HEC has

experiments with positive results. venture with CSIRO between 1964

undertaken cloud seeding For example, in a joint

and 1970, 'increases in

precipitation of up to 37 per cent were measurable during the

autumn and up to l4 per cent in the winter months. ,5 The HEC

also stated:

'Analysis of the experimental data sh owed

that cloud seeding could become a feasible

and economic propositi o n for the Co mmission under defined circumstances. No credit is

assumed to system capacity at this sta g e

because of the natural variability of c l o ud

seeding yield increments and the need t o

29

acquire much more experience on which to base storage operation rules and system

management.

Nevertheless with the present system it

should be possible to achieve significant

savings in fuel for the Bell Bay Power

Station by the use of cloud seeding. Just as

the thermal station can be used to allow

natural recovery of major storages, cloud

seeding can increase the output of

run-of-river stations so that they can assume more of the system load, while the major

storages are replenishing from normal yield and cloud seeding increments.

The present cloud seeding programme being

carried out by the Commission is designed to

confirm this commercial feasibility. The need for cloud seeding will be reviewed annually

under provisional management rules, which

specify that when the storages are below a

predetermined level at the end of a calendar

year, cloud seeding should be carried out in

the following autumn and winter. •6

3.18 After

restrictions, the 1967 drought,

the HEC obtained the

which resulted in power

approval of Parliament to

construct an oil-fired thermal generating station at Bell Bay. This station consists of two generating units each with an

installed capacity of 120 MW. The station was originally

intended to be used for the provision of base load power to the

system. However, after commissioning, high rainfall in the

catchment areas combined with a downturn in the economy made it unnecessary for the station to be used in this way. The

subsequent escalation of oil prices made the station uneconomic for a base load role while there was sufficient hydro-electric base load capacity. It has therefore been little used although

in 1981-82 use was increased to 48.7 MW av.7

Sanctioned Developments

3 .19 Since

construction: Lake.

1979 the

the Pieman HEC scheme

30

has and had the

two projects

raising of the

under Great

3.20 The Piernan scheme is the development of the sixth

catchment area and is located on the west coast of Tasmania (see Figure 3.1). The scheme will consist of four darns and three

power generating stations and will increase the installed

capacity of the Tasmanian system by 385 MH.

3.21 Parliamentary approval for the scheme was obtained in

1971 and construction commenced in 1973. The first power

station, the Mackintosh, was commissioned in February 1982 but was not due to be fully operational until later in the year. The

rest of the scheme is expected to be completed in 1986.8

3.22 In 1980-81 the HEC received approval to raise the Miena

Dam on the Great Lake by approximately six metres. This work was

completed by June 1982 except for clean-up and revegetation

work9 and it will increase the effective energy storage capacity

of the Great Lake by 2055 GwhlO and the system energy storage by about 19 per cent,ll

3.23 The HEC foreshadowed another two modifications to the

system in its 1979 Report. They were the conversion of the

existing Bell Bay thermal station from oil to coal and the

installation of a third generator at the Gordon Stage One power station. Neither proposal has been approved by the Government.

Projection of Total System Capacity

3.24 At present the total installed capacity, including

thermal generation, of the Tasmanian grid is 1780.4 MW and the

nominal peak capacity, including thermal generation, is 1750 t1W. Without thermal generation the installed capacity is 1540.4 and the nominal peak capacity is 1524 (see Table 3.1). The

completion of the Pieman scheme will increase the installed

capacity of the system by 385 MW and the nominal peak capacity

by 366 MW. The scheme will increase the long-term average energy

31

output by 185 MW,

generation by 152

the system average capacity with no thermal MW and the system average capacity with

maximum thermal generation by 135 MW. The average energy

capacities of the system after the completion of the Pieman

scheme are shown in Table 3.5.

3. 25 The raising of the Miena Dam will increase the system

average capacity by between 24 and 29 Mw.l2

Table 3.5; System Average Energy after Pieman

System Configuration

System Average Capacity with no thermal generation (firm energy)

Assessed Long Term Average Hydro Energy Output (firm plus non-firm energy)

System Average Capacity with maximum thermal generation (firm energy)

Energy Output

Million (kW.h) per annum

8813

9522

10232

Megawatts Average

1006

1087

1168

Source; HEC 1979 Report, Appendix I, p. 15.

Energy Use in Tasmania

Breakdown of energy use

3.26 Consideration of the use of one form of energy, such as

electricity, should be within the framework of total energy use. Particular forms of energy assume greater or lesser importance

32

from State to State depending on the availability of energy

resources. Changes in the availability or the economics of one

form of energy may change its proportion of total energy use.

The rapid escalation in the price of petroleum products in the

mid 1970s caused considerable substitution of other forms of

energy for petroleum.

3.27 The first pie

the 1979 Report of the

use of energy in

hydro-electricity. The

diagram in HEC, shows Tasmania, second pie

Figure that in

oil

diagram

3.2, reproduced from terms of the primary

exceeded that of

breaks down oil use

into components and also differentiates between components for which substitution by other forms of energy is possible and

those for which it is not.

3.28 The extent

among other things,

and rate of substitution will de pend on,

the availability and the price of oil and

its substitutes. Electricity is one substitute for oil in

various applications, but it is not known to what extent

electricity will be favoured a s the substitute over other forms of energy.

33

Figure 3.2:Energy Use in Tasmania

Hydro Electricity

(a)

Oil

PRIMARY ENERGY USE IN TASMANIA

Source: HEC 1979 Report, p, 6.

34

(b)

COMPONENTS OF OIL USE IN TASMANIA

Per capita consumption of energy

3.21 The HEC included in Appendix II of its 1979 Report a

table taken from Department of National Development and Energy sources which showed that in 1975-76 Tasmania had the lowest per capita primary energy consumption of all the Australian States. The HEC commented on the table:

3.29 figures capita energy

'Table 1 also shows that the average per

capita consumption of primary energy in

Tasmania is among the lowest of the States.

This is partly accounted for by the fact that

a significant proportion of that energy is

utilized at very high efficiencies. A

relatively lower standard of living in

Tasmania may also account in part for the

lower consumption of primary energy.

Both of these aspects indicate that the scope for energy savings in Tasmania may well be

less than in other States. •13

The Committee does not contest the accuracy of

provided by the HEC but it does contend that a

comparison of primary energy use rather than end

figures is misleading, especially in relation to

the per use the

conclusion drawn.

3.30 Primary energy is the energy obtained direct from

primary fuels such as coal, oil, gas or water. In the process of

the refining of oil or the thermal generation of

from fossil fuels, much of the energy is lost.

electricity Only about

one-third of the energy of primary fossil fuels is retained in

the form of electricity after generation. However, energy loss is comparatively low in hydro-electric generation as it has a

conversion efficiency of between 80 and 90 per cent.

3.31 The energy derived from secondary fuels such as

electricity and refined petroleum is known as end use energy.

For a comparison of actual per capita energy consumption among

35

the States, end use energy statistics, which make allowance for the difference in conversion efficiency, provide a more valid measurement than primary energy statistics.

3.32 The HEC was therefore correct when it commented that

Tasmania's low average per capita consumption of primary energy is due in part to the high conversion efficiency of

hydro-electric power. The Committee doubts the validity,

however, of suggesting the possibility for energy savings in

Tasmania being less than in other States on the basis of primary energy per capita consumption.

3.33 Saddler and Donnelly, in their submission to the

Committee, calculated end use per capita energy· consumption in Tasmania from 197 8-79 data compiled by the Electricity Supply Association of Australia. These calculations gave Tasmania the second highest per capita consumption of end use energy in

Australia and supported in general terms the results of a study done by the Australian Atomic Energy Commission in 1974-75. That study showed that per capita end use energy consumption in

Tasmania was 134 gigajoules in that year compared with the

Australian average of 119 gigajoules.l4

3.34 These statistics should be treated as indicative rather

than definitive. They indicate that Tasmania is a high per

capita energy user compared with the Australian average.

However, the per capita energy consumption figures include

industrial as well as domestic and commercial consumption and as a much higher proportion of its energy is consumed by industry

than in other States, Tasmania is likely to have a higher per

capita consumption rate. Per capita consumption figures should therefore be treated with caution when drawing conclusions from them.

36

Electricity consumption in Tasmania

3.35 Table 3.6 shows the amount of electricity sold annually

between 1970 and 1982 to bulk and retail users with the annual

percentage variation. The fluctuations in the rate of growth in demand of the major industrial load can be attributed, at least

partially, to prevailing economic conditions.

37

Table 3.6: Electricity Sales in Tasmania 1970 to 1982

(in thousands of kWh)

1..eM Qse.r;s % Sgles % IQtgJ. Sales* %

chgnge change chi::lnge

1970 3 236 659 1 331 264 4 571 379

6.5 4.2 5.8

1971 3 445 784 1 386 902 4 837 239

6.2 7.9 6.7

1972 3 658 127 1 496 076 5 159 497

1.8 3.4 2.3

1973 3 725 776 l 546 267 5 277 100

0.7 5.4 2.1

1974 3 752 872 1 629 507 5 387 414

-3.2 9.0 0.5

1975 3 634 252 1 776 103 5 415 848

-3.9 5. 8 -0.8

1976 3 491 378 1 879 686 5 371 064

16.7 6.7 13.6

1977 4 07 3 868 2 005 954 6 099 822

5.4 7.5 5.8

1978 4 293 730 2 157 237 6 450 969

9.7 6.3 8.6

1979 4 708 510 2 294 190 7 002 700

l.l 5.5 2.5

1980 4 759 773 2 419 960 7 179 733

-0.9 2.3 0.2

1981 4 715 669 2 4 7 5 600 7 191 269

0.6 7.2 2.9

1982 4 741 917 2 654 572 7 396 489

* The HEC also sells power to its own villages, works, etc. so

some discrepancy in figures will occur.

source: Committee Secretariat, compiled from information

contained in HEC Annual Reviews.

38

3.36 Several witnesses drew the Committee's attention to the

high per capita consumption of electricity in Tasmania compared with other Australian States and overseas. The Committee

believes that isolating the consumption of one form of energy

and comparing it with similar consumption elsewhere is

misleading because it does not take into account the fact that

the form of energy used in a particular area will depend on its

availability and the economics of its use compared with

potential substitute forms of energy. For example, Tasmania is heavily reliant on electricity because of the abundance of

sui table water resources for generating hydro-electricity, but there is no natural gas consumption in the State. It is valid to

compare only per capita total energy consumption, but even then, as mentioned earlier, cognisance should be given to local

factors affecting consumption in drawing conclusions from such data.

39

CHAPTER FOUR

FUTURE DEMAND FOR POWER IN TASMANIA

Introduction

4.1 In its 1979 Report, the HEC published its forecast of

demand for electricity for each year up to the year 2000.

4.2 The Committee decided to examine demand for electricity

over the same period and to make projections to the year 2000.

The consulting firm, McLachlan Group Pty Ltd, was commissioned

to assist the Committee in examining demand.

4.3 The Committee followed the HEC practice of dividing the

total electricity load into two components: the general load and the major industrial load. The operation and methods of

forecasting future demand are quite different for each

component. The growth in demand of each was therefore examined separately. The sum of the forecast loads of the two components

formed the total load forecast for the system.

Major Industrial Load

Composition of the major industrial load

4.4 The HEC defined 'major industrial loads' as loads

'which because of the nature of the supply, voltage, high load

factors and size (generally 5 MW and above) are covered by

individually negotiated agreements•!.

41

4.5 (J.'IIIL)

The 17 companies which formed the major industrial load

at the time the HEC prepared its 1979 Report are listed

with their contract loads in Table 4.1. Although some minor

increments of power have been added to the HIL since then, the

general downturn in the Australian and overseas economies has resulted in reductions in the production of many MIL companies. For example Temco' s No.1 furnace and sinter plant was closed

from 1 July 1982. BHP indicated in a letter to the Committee

that the resumption of operations of the furnace and sinter

plant of its subsidiary Temco would depend on the return of more favourable conditions for the Australian steel industry. The Electrona Carbide plant also closed in 19 80 but this was due

partly to other factors.

Contract system

4. 6 Among Australian State electricity systems, Tasmania

has an unusually high major industrial load with about

two-thirds of its power output contracted in 1979 to 17

companies. The high load factor, 74 per cent in the year ended

30 June 1982, was achieved through the continuous use of

electricity by the large industrial consumers. However, heavy dependence on a few companies attaches a greater risk to the

continuity of demand in the long term because the closure of a

large energy intensive plant might leave significant generating facility unused. This is particularly important in a

predominantly hydro-electric system which is capital intensive with low operating costs.

42

Table 4.1; Companies with Major Industrial Load Contracts. 1979

Company Contract Load

MW av.

Comalco Aluminium (Bell Bay) Ltd Electrolytic Zinc Company of Australasia Ltd, Risdon Tasmanian Electro Metallurgical Company Pty Ltd Australian Newsprint Mills Ltd

Savage River Mines Associated Pulp and Paper Mills Ltd, Burnie Electrona Carbide Industries Pty Ltd Associated Pulp and Paper Mills Ltd, Wesley Vale Goliath Portland Cement Company Ltd

Electrolytic Zinc Company of Australasia Ltd, Ro s ebery Renison Ltd Mt Lyell Mining & Railway Company Ltd Tasmanian Pulp and Forest Holdings Pty Ltd Tioxide Australia Pty Ltd

Associated Pulp and Paper Mills Ltd, Tamar Northern Woodchips Australian Paper Manufacturers Ltd TOTAL

237 98.2 72.5 58

34.6 32.45 l3 .5

13.125 10 10 8

7

5.3 4.5 4.5 3.6 .3._.__2_

616.275

Source; Committee Secretariat (information compiled from HEC 1979 Report, Appendix 2)

4.7 To some extent the system is protected from the

vagaries of the market place by the contract arrangements which require quarterly payment in advance for about 80 per cent of

each company's contracted power requirements, irrespective of the actual use of power in that quarter. Additional electricity used is paid for on a pro-rata basis. This system provides some

incentive for conserva tion but at the same ti me guarantees a

fixed return to the HEC.

4. 8 The term of each contract varies greatly depending on

the negotiated agreement between the company and the HEC. All

contracts are confidential. Lon g contracts are gener ally

negotiated with companies with substantial investments in plant and which need large blocks of power. Although a company which

closes its operations, either temporarily or permanently, is

s till contractually required to pay for the bu lk of its

43

electricity for the remaining part of the term of that contract, an accommodation is likely to be reached between the HEC and the compa ny on that point.

Pricing policy

4.9 Under the system of marginal pricing, whereby bulk

electricity is priced on the cost of the scheme from which it is

notionally drawn, companies with long-standing contracts for electricity are charged relatively low rates for it. According to the HEC, the average price paid by the bulk users is about

one cent a unit.2 The HEC has estimated that the price of power

from the Pieman scheme will be 2.1 cents a uni t3 and from the

Gordon-below-Franklin schem e will be 1.8 cents a unit (with

transmission)4, which is about double the current average price. Recently, with the first stage of the Pieman scheme not yet in

full operation, power has been available only from the Bell Bay oil-fired thermal station at 4.5 cents a unit or a combination

of Pieman and Bell Bay electricity has been offered at a price

between the two.S

4.10 If a company were to give up its block of power, it

would have to negotiate a new block at the prevailing price if

it were to start another operation in Tasmania. Special

arrangements have been made between the HEC and Elect rona

Carbide and Temco to reserve their blocks of power during their temporary closures.

4.11 The marginal pricing policy for the MIL is currently

under review by consultants to the Tasmanian Government. The

policy has attracted considerable criticism for its

disadvantages to new industries contemplating investing in

Tasmania because of their need to negotiate a block of power

available at current prices, which would be considerably more expensive than those paid by existing bulk users. bulk user seeking a contract at the present

44

For example, a

time would be

offered electricity at either Bell Bay or Bell Bay/Pieman rates, both of which would be several times more expensive than

existing bulk user contracts. Most of the other State

electricity authorities in Australia average the costs of the system so that new companies are not put at such a disadvantage. The pricing policy is of particular importance to Tasmania

because of perceived need by both major political parties to

attract new industrial growth to alleviate the burgeoning

unemployment and other social development problems in the State.

4.12 Any change of pricing policy will need to be introduced

over a period of time because of the long-term contractual

arrangements which tie up the bulk of the power generated in the

State. At present, the bulk prices are increased quarterly in

accordance with an escalation formula which takes account of

such things as movements in salaries and wages, general system costs and variations in interest arrangements. Prices may also be increased when a contract is being renegotiated, but it seems that in most cases prices vary little between contracts for the

same company.

Historical growth of the major industrial load

4.13 In Appendix II of its 1979 Report, the HEC included a

graph of the major industrial load for the period 1968 to 1979.

This graph is reproduced in Figure 4.1.

45

Figure 4.1: Major Industrial Average Load

MW AVE RAGE

6 0 0 -······-----·-·-- ----------------------------- ----

550

500 ----------- - -

./ ·

- - ----·----·- --- -----/-,/ '-------- - --------{

-·- --·-·-.-·"· ; · /. ""--· 4 00 ---·--·--- . ............ -· 350 . ---···-- --/--- .- - -------------------- ----------- - --·-·-----

"'l ----- - - -·------------ - ---·---·--------·. ·---·-·--.-

25 0 - -- ------·-- - ---- --------- -- - -- - -------------- -- -- - . -- - -· -· -----···--·- - . - ·· ·---

1968 19 69 1970 1971 19 72 19 73 1974 1975 1976 1977 19 78 1979

Source: HEC 1979 Report, Appe ndix II, page 32.

46

5000

'JOOO

?000

1000

0

1350

Figure 4.2: Major Industrial Load Annual Energy Consumption. 1950-1981

ANNUAL t:Nt:RGY CONSUUPTION GWh (UILUON kWh)

UAJOR INDUSTRIAL LOAD

1360 1370 1380

FINANCIAL Yt:AR eNDING 30 JUNe

Source: Evidence, p.2982

47

4.14 Although growth has been fairly steady over the period,

no new industries have contracted for electricity for about 20 years. The increments added to the MIL in this period have been

for existing bulk users.

Future demand for the MIL

4.15 In formulating a forecast of demand for the MIL to the

year 2000, the HEC approached existing bulk users 'to ascertain the possible extent of future increases in their electrical

requirements'. Table 4.2, reproduced from the HEC's 1979 Report, shows the results of those approaches.

48

Tab l e

4.2:

Establi

s hed

maior

industries

foreshadowed

progressive

additional

loads

PR OGRESS

I V E

A D D I

TIO

NAL

CO N T

RAC

T D E

MANDS

PR OGR

E SS

IVE

A D DI

TIONA

L T O

TAL

S

YEA

R

-------

C om

alco

EZ

Co .

Tern

co

ANM

A PPM

APPM

GPC

EZ

Co.

Renison

TP F H

Contract

Aver

age

Bell

Bay

Ri sdo n

Bell

Bay

B o y

er

B ur

ni e Wesley

Rail

ton

Ros

eb e

ry

Hension

Tri ab

u nna D emand

Inc.

Lo sses

Vale

Bell

1979 2 1 3 3 1 980

1 3 1 2 1 6 2 2

27

13

1 98 1 1 3 1 2 1 6 2 6 3 1 1 6

1 982

1 0

22

26

2 2 1 6 2 6

11

60

1 983

1 0

22

26

2 2 4 6 6 2 8 1 2 4

1 0 4

1984

1 0

22

5 2 3 2 4 6 6 2 8 1 5 1

131

1985

1 0

22

5 2 3 2 4 6 6 2

10

5 158 1

36

19 86

1 0

32

78

4 2

46

6 2

10

5 1

95

17 2

1987

1 0

32

78 4 2

46

6 2

10

5 1 9 5

17 2

1988

60

3 2 78 5 2

46

6 2

10

5 246 22 3

1989

60

32

78 5 2

46

6 2

10

5 2

46

2 2 3

1990

50

32

102

5 2

46

6 2

10

5

2 70

24 8

1991

60

4 2

102

5 2

46

6 2

1 0

5

280

258

1992

60

4 2 128 5 2

46

6 2

1 0

5

306

283

1 993

60

4 2 1

28

5 2 4 6 6 2

10

5

3 0 6

283

1994

60

52

1 52

5 2 4 6 6 2

1 0

5

3 40

3 1 8

1 995

60

5 2 1 52 65 2 4 6

16

2

10

5

410

382

1996

60

52

17 8 65 2 4 6

16

2

10

5 4

36

4 0 7

1 997

60

6 2 1 78 65 2 4 6 1 6 2

1 0

5 446 417

1 998

60

62

202

65

2 4 6 1 6 2

1 0

5

4 70

44 2

1 9

99

60

62

202

65 2

46

1 6 2

1 0

5

4 70

44 2

2000 60

72 228

65

2

46

1 6 2

10

5

5 06

477

Sourc

e :

HEC

1 9 7 9

Report

, p. 12.

4.16 From this information, the HEC derived a forecast of

demand for the MIL. It stated:

'It can be seen that if energy is available

at a competitive price, ten of the eighteen

established major industries expect to

require additional increments of energy in

the period under consideration. The aggregate of the expectation is 477 MW av. and this

figure makes no allowance for any new major

industry which may wish to become established in the future.

Clearly the aggregate of the envisaged

increments is much larger than can be

supplied from hydro sources and this factor

in itself will result in some moderation of

future demand.

After consideration of the probability of

each particular foreshadowed increment

becoming a contract commitment it is

considered reasonable at this stage to adopt a linear increase of 10 MW av. per annum in

the forecast in order to cover Major

Industrial Load. •6

4.17 In the first paragraph of the above quotation, the HEC

qualified the possible requirement for additional power by

making demand for power subject to a 'competitive' price. A

'competitive' price was not explained, but the inference can be drawn from the second paragraph that it was the price of

hydro-electricity. Again, in the second paragraph, the HEC was vague about the extent that the moderating influence of the

price of non-hydro-electricity would have on demand. As

explained later, the price of power is only one factor in the

industrial investment decision-making process.

4.18 In its submission to th e Committee, the HEC provided

its probability table for

requirements as an example Temco' s possible future electricity of the probability tables compiled

for each of the major electricity users.

May 1982 and afterwards in writing,

probability tables prepared for the

so

the other

At the hearing on 21

Committee sought the companies.? Although

the HEC undertook at the hearing on 21 May 1982 to provide them

to the Committee, the Committee had not received them at the

time of reporting.

4.19 A representative of the HEC told the Committee that the

probability tables were compiled on the basis of the HEC's

subjective judgement on the likelihood of each company

proceeding with its foreshadowed possible expansion.8

4.20 The HEC emphasised that although the increase could

vary significantly from year to year, the MIL is expected to

increase at an average of 10 MW av. a year over the period.

4.21 In a report dated May 1980, the Directorate of Energy

criticised the HEC for restricting the major industrial load to a linear increase of only 10 MW av. a year. In the opinion of

the Directorate, demand from existing users would be greater

than that allowed by the HEC, and that made no allowance for the

possible entry of new industries. This prompted the Directorate to state:

'The Commission's forecast has been strongly influenced by the available supply of

hydro-electricity, if not governed by this

factor. Indeed, one is left with the

impression that the arbitrary allocation to major industry serves only the tactical

objective of allowing the total load

projection to dovetail neatly with the

developmental lead time for the Integrated

Development'. 9

4.22 The Directorate forecast demand for

in 1990

the

industrial load to be a total of 755 MW av. and

major 785 MW

av. in 1995. It did not make a projection fo r the year 2000.

4.23 The Tasmanian Chamber of Industries also disagreed with

the HEC in its forecast on the size of the major industrial

load. A survey conducted in 1980 by the Chamber resulted in the

51

possible use of 236 MW av. in 1990 and 761 MW av. in 2000 in

addition to the current load. These figures are 136 MW av. and

561 MW av. higher than the HEC's projections for 1990 and 2000

respectively. There does not appear, however, to have been any critical assessment done of the figures by the Chamber and,

therefore, little weight can be attached to them.

4.24 The Committee obtained information from the main

companies listed in the HEC's table, not only on the ir

investment plans but also on the factors used in making

investment decisions. Although the price of electricity was

generally acknowledged to be an important factor

it represented a

in the

sizeable decision-making process component of operating overriding factor. Other

because costs, factors it

may

importance or the total

was not necessarily the

assume equal or greater

package may be less investment

attractive than an alternative package elsewhere in Australia or overseas.

4.25 All of the companies from which information was sought

had no firm plans beyond five years and even their plans within

that period were tentative. For example, Mr L.B. Allsopp,

General Nanager (Smelting Operations), Comalco (Bell Bay) Ltd told the Committee:

4.26

'Our planning at this stage does not have an

expansion of the Bell Bay smelter on the

books. Any expansion of the Bell Bay smelter

would depend upon power being available and then an assessment of the price of that

power, the cost of the expansion and an

analysis of the economics of that. •10

The current rece ssion has been a c centuating th e

difficulties for companies in formulating investment plans

through their need to reduce production and r e trench staff at

least until economic conditions improve.

52

4.27 The present state of the economy, the closures of

plants and reductions in production have prompted some people to regard these problems as likely to retard long-term growth in

electricity demand. Without understating the seriousness of the present economic problems, it may be more prudent to treat them as transient. However, in saying that, the Committee does not

wish to imply that the current recession will be followed by a

period of stability. The Committee regards the economic outlook as very uncertain and this highlights the difficulties facing forecasters of future demand for power and underlines the need

for flexibility in both demand forecasts and supply options.

4.28 The McLachlan Group was asked to examine the

information available on the possibility of the current major industrial users requiring additional increments of power up to the year 2000. In its report to the Committee, it dealt with

each of the companies in turn and made initia l projections, with possible variations, for the years 1990, 1995 and 2000. The

McLachlan Group then went on to say:

4.29

'How should the possible variations be

handled? We believe that the 1990 variation

is reasonably possible say 70% of it. The

1995 and 2000 variations need severe

discounting. Note that the 1995 and 2000

variations are almost totally limited to

Comalco, Temco, ANM and APPM Wesley Vale (EZ might also make an impact). Howe ver, the 1995 and 2000 figures ar e outside the planning

horizon for firm decisions on construction of power schemes. •ll

The McLachlan Group major industrial load forecast, as derived above, is set out in Table 4.3.

53

Table 4.3: McLachlan Group Major Industrial Load Forecast Compared With HEC Projection

Actual in 1981 - 538 MW (ay.l

MgL.agblan

.GL.QlW

11..W gV, Limit

MW av,

MQI,Q,cblil.!l iirmW

MW av,

McLachlan LQwer. Limit MW ay,

1990 701 6 80 648 616

1995 751 737 670 603

2000 801 888 740 592

Source: Committee Secretariat (information McLachlan Group Report dated 9 June 1982). obtained from

General Load

Definition

4.30 For the purposes of this inquiry

accepted the HEC definition of the general load: the

'The Residential, Commercial and Industrial categories are described as the Retail

Consumers and except for a few special cases

are supplied at published tariff rates. Their combined energy consumption, together with system losses and HEC usage is known as the

General Load. •12

Components of the general load

Committee

4.31 The retail consumers can be divided into a number of

categorie s on the basis of the tariff rate at which they are

char ge d. These categories are: residential, industrial, hot

water, off-peak, lighting, commercial, bulk commercial, unread meters , etcetera and HEC villages.

54

4.32 The various components of the general load have grown

at different rates during the last decade, as shown by Table

4. 4.

Factors influencing electricity consumption

4.33 A number of factors i n fluence the rate at which

electricity is consumed in the general load. Evidence to the

Committee suggested that the most important of th ese are the

real price of electricity, the price and availability of

substitute energy s ources, the price and availability of

electrical goods, income levels and the length and sever ity of

the winter,l3

4.34 The way in which the rate of electricity consumption

changes for a given change in each of these f actors can be

measured and is termed an elasticity.

4.35 The price elasticity of demand is usually negative,

that is, as the price of electricity increases demand decreases and vice versa. Between 1963-64 and 1977-78 the price of

electricity in Tasmania decrease d by about 30 per cent in real

terms.l4 During the same period the per capita consumption of

electricity increased from 2648.7 to 5343.4 kWh,lS

4.36 The HEC stated in the 1979 Report: 1 In the short term

the Elasticity of Demand f o r electricity with respect to price

i s very small and it is possible th a t the decreas i ng r eal price

since 1972 has had only a very minor impact on th e l evels of

demand. 1 16 However, short-term price elasticities for

electricity consumption are generally small (about -0.1 ) because of a lag effect, partially caus ed by a number of factors.

Long-ter m elasticities are generally l a rger ( -0.5 to -1.5) and

are probably more realistic as they tak e into account time lags

between cause and effect.l7

55

4.37 For the period 1960-61 to 1979-80 Drs

Donnelly calculated a price elasticity This value was statistically significant than the figure of -0.86 for the whole of

of demand

Saddler and of -0.56.18

but is somewhat less

Australia provided by

the Commonwealth Department of National Development and

Energy.l9 Saddler and Donnelly's price elasticity indicated that the decreasing real price of electricity over the last two

decades has influenced the consumption in much more than a ' ve r y minor' way.

4.38 The most common substitute energy source in the general

load is heating oil. In accordance with demand theory, Saddler and Donnelly found a positive elasticity for the effect of

heating oil price on consumption of electricity. Although

smaller than the price elasticity, the substitute energy

elasticity (0.31) was also statistically significant.20

4.39 Rapid increases in oil prices in the 1970s l ed t o a

move away from the use of oil for heating in most Western

countries. In Tasmania, where supplies of coal and natural gas

were limited, this led to an increase in electricity

consumption. More recently, the stabilisation of oil prices and the fashion for wood-burning slow combustion space heaters has led to a slowing of this trend.

4.40 Higher standards of living, stemming from increased

real income levels, generally result in higher levels of

electricity consumption. In Tasmania, during the period 1960-61 to 1979-80 the income/demand elasticity was 1.13, showing that there was a strong propensity to consume greater amounts of

electricity as real income leve l s increased.21

4.41 The price and availability

in

of e lectrical

complex wa ys appliances as new and influence electricity consumption more efficient consumer goods are continually introduced into

the market. This makes appliance saturation levels diffic ult to

56

determine. Changes in house occupancy levels also influence

electricity consumption. The current trend of decreasing

occupancy will probably level out, but exactly when thi s will

happen is impossible to determine.

4.42 The 1979 HEC Report made no mention of the relationship

between temperature and electricity consumption. However, in its submission to the Committee the HEC claimed that, when a few

individual years are considered, temperature makes a significant difference to electricity consumption.22 In Saddler and

Do nnelly's econometric analysi s of electricity consumption

between 1960-61 and 1979-80 it was found that temperature was

not a statistically significant variable in explaining changes in demand for electricity.23 Thi s difference of opinion is

probably explained by differences in methodology as well as by the fact that, in the long term, small deviations in the use of

electricity caused by temperature variations are ma s ked b y more significant factors such as income levels, the price of

substitute energy forms , population changes and house occupancy rates.

4.43 In conclusion, it is clear that there are numerous

relationships between social factors and the rate of electricity use. Howe ver, it i s also clear that to separate and test the

relative impact that these variables have had, and possibly will hav e, on demand is a complex and time con s umi ng ta s k.

57

Table 4.4: Components of the General Load. and Their Growth Rates Since 1973.

Component* ADD!Hl.l r9te P,t:QpQrtiQD Qf

1n3-12za 1279 geoez:al lQgQ

19:Z9

Public lighting** 15.7% -14.0% 5.3%

Commercial 5.4 5.1 4.8

Bulk commercial 15.4 2.7 3.0

Industrial 6.8 3.9 22.1

Off-peak 13.5 15.2 9.2

Hot water 3.6 2.7 21.5

Residential 7.8 5.9 32.5

Unread meters, etc. erratic 1.6

Overall growth in sales 7.4% 5.0% 100.0%

in

* System losses and HEC use account for an

approximately equal to 12% of general load sales. Not metered - unreliable estimate.

amount

**

Souz:ce: Harwood and Hartley, p.9a. HEC Annual Review 1978-79.

Demand forecasting methodology

4.44 One of the most frequently used methods of estimating

the future demand for any commodity is to begin with the premise that long-term trends in growth rates can be projected into the

future. However, the way in which growth rates are det e rmined

and projected into the future, and thus the final estimates o f

demand, can vary considerably according to the statistical

method chosen.

4.45 The simplest method is to calculate a growth rate fr om

aggregate electricity consumption data and to project this rate into the future. A refinement of this method, and that advocated by the HEC, is to calculate per capita electricity consumption and to project this rate into the future taking into account the

estimated size of the future population.

58

4.46 However, in some circumstances, such as periods of

economic instability or when there is uncertainty about the

availability of particular energy resources, the premise that past trends can be used to predict future consumption may be

invalid. The alternative, therefore, is to make subjective

assumptions about the way in which trends will change in the

future. As the general load is made up of a number of components

which may be consumed at different rates, each must be assessed independently for likely future demand before reaggregating to form a total projection. An alternative approach is to assess

the way in which various factors have influenced the consumption of electricity in the past to produce an econometric model.

After making assumptions about how these factors will influence consumption in the future, this model can then be used to

project demand. This method allows a range of projections to be made each dependent upon the set of assumptions, or scenarios, used. The scenario which is considered to be most likely is then used for the final projection.

HEC forecasts of demand24

4.47 The methods used by the HEC to forecast demand began

with the premise that the past trends of electricity consumption could be projected into the future. Analyses were performed on basic average load figures, which exclude weekends and holidays. These figures were then corrected, by the addition of about

seven per cent, to arrive at values for the general load.

4.48 To assess the historical growth rate of the general

load the HEC plotted electricity consumption since 1953 on an

arithlog graph (Figure 4.3). From this it was determined that

there was a discontinuity in the growth rate at about 1972-73,

such that from this time onwards there was a much higher rate of

gr owth. Modified exponential growth curves (which describe

growth in which increments decrease by a c onstant proportion) wer e then fitted to the el ectricity consumption data for the

59

years 1953-1972 and 1973-1978 (Figure 2 in Appendix II of the

1979 Report). A per capita analysis of these two periods (Figure 4.4) revealed that the growth rate for the first period was 3.95

per cent and for the second period was 5.85 per cent.

4.49 The HEC put forward three reasons for the 1972-73

change in growth rate, although the HEC conceded that it did not fully understand the reasons for the increased growth:

(i) reduction in the real price of electricity relative

to other commodities;

(ii) an increased purchase of electrical goods; and

(iii) an increased propensity to spend on energy.

4.50 The

consumers, as average shown

real by the

cost HEC,

of electricity to retail

dropped from 4.1 cents in

1963-64 to 2.65 cents in 1976-77 so that a negative price

elasticity may have occurred during this period. However, the

influence of points (ii) and (iii) is debatable.

4.51 With regard to the increased purchase of electrical

goods, the HEC stated: 1 The National Accounts show that the

value of electrical goods purchased over the last decade has

been rising faster than the Final Consumption Expenditure. In

other words, consumers are spending a larger proportion of their money on electrical goods 1 • 25 There are two aspects to this

statement, first, that people may be buying a greater number of

electrical goods and, secondly, that people may be buying more expensive electrical goods. However, the HEC has not established that there is a direct relationship between spending a greater

proportion of money on electrical goods and an increase in the

growth of electricity consumption. For example, the introduction of colour television in 1975 led to a greater expenditure on

60

electrical goods but, as most

black-and-white television sets, colour televisions replaced this would have led to only a

slight increase in power consumption.

4.52 In its discussion of the 'propensity to spend on

energy' the HEC stated:

'It is perhaps in the area of propensity to

spend on energy that the main underlying

reason for the increase in growth in demand

in recent years is to be found' .26

Yet the HEC provided no data to support this theory. The

National Accounts, used by the HEC, in fact show that between

the years 1969-70 and 1980-81 the proportion of private final

spent on gas, electricity

per cent in 1969-70 to 3.0

this period expenditure on

consumption expenditure in Tasmania and fuel actually dropped from 3. 3

per cent in 1980-81. Throughout

energy fluctuated slightly but, if anything, decreased from

1973-74 onwards (Table 4.5).

61

T a b

le

4.5:

Private

C o n s

umption

E xpenditure:

TA S MANIA

Year

1 969170

1970/7 1 1

97 1 /72

1 972173

1 973/74

1 974/75

1975176

1 976/77

1 97

7 /78

1978179

1979/80

198 0

/8 1

Item

-per

cen

t

Food

19 . 9

19.3

1 8 . 9

18.6

18 . 5

17 . 3 16. 5

16 . 4

16 .7

17 . 4

18.

3 1 8 . 3

C i g a

ret tes

and

Tobacco 3 .1

3.0

2 . 9 2 . 8

2. 7 2 . 6

2.7

2.6

2 .4

2 . 3 2 . 4

2.3

A l c o

hol

i c

dr in

k s 6 . 6

7.0

6 . 8 6

.5

6 .1 6 . 2

6. 0

5 .8

6 .1

5. 9

5.8

5. 6

Clothing

etc

.

1 0 . 5 1 0 . 3

9.9

9. 7

1 0.0

10 . 2

9 . 2

9.0

9 .1 8

.7

8 . 2

7. 9

Hea

l th

5 . 3

5.7

5 . 8 6

.2

5 .8

6 .0

5. 9

5.7

5. 5 6 . 1

5.9

6. 0

Dwe

l ling

rent

1 0 . 7 1

0.9

11.1

1 0 . 9

1 1.1

11.

6 1 2 . 3

13.0

1 3 .1

13.1

13.1

13.

2

Gas ,

el e

ct ri

c ity,

fuel

3 . 3 3

.4

3 . 4 3 . 4

3 . 0

2 . 9 3 . 1

3 . 0

3 .1 3 . 3 3 .1

3 . 0

Househo l d d

ura

b les

7 . 6

7. 3 7 . 8

7. 3 8 . 2 9 . 2

1 0 .1

9. 8 9 . 1

8. 2

7. 3

7.1

m

Books,

papers

,

etc

.

1. 0

2. 1

1. 9 2 . 1

2 . 0

1.7

1. 9

1.9

2.1 2.1

2 . 2

2. 2

"'

All

oth

e r goods 4 . 1

4.3

4 . 2 4 .1 4 .6 4 . 6 4 . 4

4. 4

4. 3

4. 5

4.6 4.7

Trave l a

nd

communication

1 5 . 0

15 . 3 1 5 . 6

15 . 8 1 5 . 4

15.

6

16. 0

1 6 . 2 1

5.5

1 5 .4

1 6 .4

1 6 . 6

A l l

oth

er

serv

i ces

1 1.

5

11.

2 1

1. 5

12.

4 1 2 . 8 1 2

.5

1 2 . 6 1

2.8

1 2 . 9

12.

8

13.0

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9

Figure 4.3: Arithlog Plot of the Basic Average Load 11953-19771

The curved line is the modified exponential growth curve for the period 1953-1972

L ' l ' ' I . ___ .,.. _ _ ___;,_ __ _

'

Source: Figure 4. 3 is taken from page 11, Appendix

1979 HE C Report on the Gordon River Power Development,

63

II to th e

Stage 2.

kWPER CAPI TA

Figure 4.4 Per Capita Consumption - General Load

:: I - ·-·-- - + --- - ---+--------t-- - -----+- --------j

0 · 35 - -- - ----- - -- -·f--·---·- - --- -+---- --- ·---

,.,_i __ _

0 · 30 - \ -- -·-- ·- ·- - --- - ·------. - -

0

0 ·· 2205 - " __ J ____ -- --------' - f\ROWTH -AATE

i- - - ---+=--== '.':: c : __ -------- - ----+-----t----··--·-----J · 125 ! 1953 1955 195T 1959 19 6 1 1963 1965 1967 1969 1971 1973 1975 1977 1979 Source: Figure 4. 4 is taken fr om page 12, Appendix II to the

1979 HEC Report on the Gordon River Power De v elopment, Stage 2.

6 4

4.53 The HEC stated: 'the early pattern of growth by itself

can no longer be considered a reliable guide to future load•.27 However, having set out the historical trends, the HEC obtained its forecast of demand by extrapolating the per capita rate of

consumption of electricity in the following way:

(i) assume that the trend in growth of the basic average

load experienced in the period 1973-1978 would

continue until 1984;

( ii) assume that, over a transition period of three

from 1984, the per capita consumption growth

would return to the previous historical rate per cent per annum and continue at that figure.

'The projected Basic Average Load of (i)

above was adjusted for losses, Commission

loads and weekends/holidays to give the

Projected General Load until 1984. Beyond

that date the growth in per capita

consumption from ( ii) above was combined with the forecast population figures to give

the remainder of the General Load Projection I 28

of

years rate 3.95

4.54 The Commission, when questioned on using 1984 as the

year in which the trend would revert to the normal, replied:

4.55

'It is quite an arbitrary selection of time

We also were not prepared to put a sharp

discontinuity in our growth curve. That could not be explained so we chose a period which

we thought was reasonable to blend the growth back to the long term trend. •29

The final HEC forecast of demand given was as follows:

1990 - 515 MW av., 1995 - 637 MVl av. and 2000 - 781 MW av. To

these figures a three per

subtracted to give a band of:

cent variation was added and

65

1990 - 499.5 to 530.5

1995 - 618.0 to 656.0

2000- 757.5 to 804.5.30

4.56 To these figures the HEC added a list of

possible modifications which demand. The modifications

could either increase or decrease included the real price o f

electricity, thermal insulation, dom e stic solar space heating, solar water heating, industrial solar energy, appliance

efficiency, heat pumps and oil prices. When the estimated values for these modifications were taken into account the HEC demand band became: 1990 - 463.5 to 595.5

1995 - 553.0 to 735.0

2000 - 648.5 to 898.5.31

Recent growth in the general load

4.57 Three years has now elapsed since the HEC's 1979

f or ecast of demand was made. Therefore, the predicted general

load can be compared with the actual load to assess the accuracy of the original predictions.

4.58 For the years 1979, 1980 and 1981 the HEC predicted

that the general load would be 305 MW, 322 MW and 339 MW

respectively.32 In its submission to the Committee the HEC

provided a review of its 1979 forecast. In doing this, the HEC

introduced two new concepts: (i) that the general load

calculated at the generator terminals is best considered without Arthurs Lake Pump (7.5 MW av.) as it is not a customer load but

a station auxiliary which is constant in the long term; and (ii)

that 'when a few indi v idual years are considered it i s neces s ar y

t o correct for temperature variations because temperature makes

a significant difference to electricity consumption' ,33 The

method used by the HEC to correct for temperatur e variations,

described in Appe ndix I of the HEC submission is complex and, as

no figures are given , cannot be verified .

66

4.59 In its submission the HEC stated that the actual

general load was 293 MW av. for 1979, 307 MW av. for 1980 and

324 MW av. for 1981 (excluding the 7.5 MW av. for Arthurs Lake).

This represents a growth rate of 4.8 per cent between 1979 and

1980 and 5.5 per cent between 1980 and 1981. However, after

correcting for temperature variations, the demand figures given by the HEC were 297 MW av., 318 MW av. and 332 MW av.,

respectively. The corresponding growth rates are 7.1 per cent (1979-80) and 4.4 per cent (1980-81). The deviations of

temperature-corrected load from forecast load were therefore zero, four and zero MW, respectively.34

4.60 The HEC concluded that:

'it can be seen that had average temperatures prevailed during this period the General Load would have been either in excess of

or equal to the forecast load'. 5

4.61 The statistical summary of the 1980-81 HEC Annual

Review actually shows that sales in the general load rose from

2419.960 million kWh units in 1980 to 2475.6 million kWh units in 1981, an increase of 2.3 per cent.36 The corresponding

increase between 1979 and 1980 was 5.5 per cent. Temperature

correction factors were not employed in the calculation of

figures presented in any of the recent Annual Reviews. Sales in

the major industrial load dropped between 1980 and 1981 by 0. 9

per cent and, as the MIL accounted for 65.6 per cent of the

total load, the ov e rall increase was only 0.16 per cent. The

total amount of electricity unaccounted for by sales increased from 7.73 per cent in 1980 to 9.56 per cent in 1981.

4.62 The South West Tasmania Committee (NSW) pointed out,

with respect to the total load:

67

4.63

'In its most recent Annual Review (HEC l98la) the HEC has said that the annual growth of

electricity use is 2%. This statement must be treated with considerable skepticism. The

figures cited show that the system average

load rose from 888 to 980 MW which is a rise

of about 2%. However, the electricity sold

rose from 820 MW to 821 MW - a rise of only

0.16%'.37

The South West Tasmania Committee (NSW) concluded:

'Where the missing 19 MW, worth $6 million,

went to is a bit of a mystery but could be

due to increased system losses and/or some

accounting discrepancies If sales are

only rising at 0.16% per year, the load ought

to be rising at the same rate. Either that or

there is considerable scope for an increase

in technical and fiscal efficiency. •38

4.64 The statistical summary of the 1981-82 HEC Annual

Review39 shows that in 1982 sales in the general load totalled

2654,572 million kWh, an increase of 7,2 per cent, and in the

MIL totalled 4741.917 million kWh, an increase of 0.6 per cent; the total load increase was therefore 2.9 per cent.

Other forecasts of demand

4.65 Although a large number of submissions commented on the

HEC demand forecasts, only three submissions provided

independent forecasts of the general load. These were: the South West Tasmania Committee (NSW), the Tasmanian Wilderness Society (Canberra Branch) and Drs Saddler and Donnelly. In addition, two reports written prior the general load and

to this inquiry included an analysis of

its future growth. These were: the

Tasmanian Directorate of Energy Report to the Co-ordination

Committee on Future Power Development, and the Harwood and

Hartley Report 'An Energy Efficient Future for Tasmania'.

68

South West Tasmania Committee (NSW)

4.66 The South West Tasmania Committee (NSW) 40 repeated the

modified exponential growth curve analysis used by the HEC for the 1953-1978 electricity consumption data.4l It debated,

however, that there had been a departure from the long-term

trends in 1972-73 on the basis that none of the years deviated

by anything more than random fluctuations. The SWTC(NSW) claimed that there has been a constant growth rate of 3.89 per cent

since 1953. It extrapolated from their equation (10910 BAL =

3.293 - l. 525 (0.9787) t, where t is the number of years elapsed

s ince 1953) to the year 2000 to obtain a figure of 54 MW av.

This equation can be used to derive figures for 1990

(403.1 MW av.) and 1995 (473.8 MW av.).

4.67 The SWTC(NSW) also carried out an analysis on a per

capita basis, as recommended by the HEC. The regression equation derived from the 1953 to 1978 data again confirmed that there

was no statistical reason to separate the years 1973-1978 from the pr evious years. This e quation (log10 BAL -0.6227 +

O.Ol736x, where x is the number of years elapsed since 1953) can

also be used to project demand and, in combination with the

population estimates given by the HEC, yields the following:

1990- 461.4 MW av., 1995- 576.2 MW av., 2000- 715.7 MW av.

4.68 It should be noted that the SWTC(NSW) has used basic

average load data, as recommended by the HEC. To make the above

figures comparable with estimates f or the general l oad they must be corrected by the factor of 0.93.

Tasmanian Wilderness Society (Canberra Branch)

4.69 The TWS (Canberra)42 criticised the model used by th e

HEC (their modified exponential growth curve) to forecast

general l oad demand. Th ey stated:

69

4.70

'The report does not provide any

rationale for the choice of such a model.

None of the parameters hav e any economic or

engineering interpretation. Hence the model itself is devoid of any significant insight

as to why people use electricity and whether

these habits can be affected. Specifically, it denies that such matters as population,

income, household purchases of consumer

durables as well as electricity and other

prices affect electricity demand One of

the stated attributes of the model, was that

it "describes a growth in which increments

decrease by a constant proportion when a is

negative and b is less than l •.. "(page 43).

While the model does produce declining growth rates it is not clear how ever why this should

be a desirable attribute or whether the

imposed rate of decline is appropriate. It is

even l e ss clear as to why it s hould be

sui t a ble for f orecasting Further, · other

equations can prov ide equally higher (or

bette r) correlation coefficients, especially when applied to a series with relatively

little variation between s uccessive

observation s and about a stable trend line.

Without such information, and comparisons, it is not possible to show that the demand model

is either plau s ible, or the best

statistically, let alone whether it is

meaningful or useful when projecting future demand.43

It b e liev ed that a mo re reliable model would tak e into

account at least future changes in the population, income levels and price of e lectricity. Such forecasts, it suggested, could be derived from aggregate models (such a s Saddl e r and Donnelly ) or

disaggregate models (such as the Direct orate o f En e r gy or

Harwood and Hartley).

4.71 'l'he TWS reassesse d the Directorate of Energy's

di s aggr e gated projecti o n s by reducing figure s believ ed to have b ee n ov erestimated . It d e riv ed a final fi g ur e of 428 MW av . for

1990 which, wh e n compar e d with the 1979 figure of 305 MW av.,

70

gives a growth rate of 3.1 per cent.44 At this rate of growth,

demand in 1995 would be about 497 MW av. and in the year 2000

would be about 579 MW av.

Saddler and Donnelly

4. 72 Drs Saddler and Donnelly in their submission to the

Committee pointed out the advantages of using an econometric

study to forecast the demand of the general load.45 They

explained that an econometric approach assumes that the overall demand for a commodity (in this case electricity) depends on the

price of that commodity (electricity price), the income of

consumers and the price of other substitute commodities.

4.73 Their analysis of retail electricity sales for the

years 1960-61 to 1979-80 yielded an econometric equation which related per capita retail electricity sales, electricity price, heating oil price and average weekly earnings in Tasmania. To

project this equation into the future the authors assumed that the three variables would grow at constant rates. Combinations of specific growth rates for the three variables formed growth

scenarios (Table 4.5). Each scenario resulted in a different

projected growth rate for the general load. These growth rates

were: 'most likely' 2 per cent; 'cheap electricity' 3.1

per cent; 'high growth'

per cent; 'high oil price'

'average historical' 5.1 per cent. 46

4.2 per cent; 'high income' 3.6

1. 8 per cent;

per cent; and

'HEC' 4.2 per cent;

'extrapolation' 4.7

4.74 Only two scenarios produced higher projections than the

HEC forecast ('average historical' and 'extrapolation') and four

of the remaining five scenarios produced projections that were significantly lower than both the historical growth rates and

the HEC projection.47

71

4. 7 5 The Saddler and Donnelly 'most likely' growth rate of

two per cent resulted in the following demand estimates (when

the 1979-80 figures are taken as 5732.5 kWh per capita,

corrected by 12 per cent for HEC use and losses, and the

population levels are those given by the HEC): 1990-91 - 403 MW

av., 1995-96- 455 MW av. and 2000-01- 620 MW av.

4.76 This method of estimating future electricity

requirements has several advantages over less sophisticated methods. First, the equation used for the projections is derived through an analysis of the most important factors which have

influenced electricity consumption in the past. Secondly, when making assumptions about the way in which these factors will

influence consumption in the future a whole range of values for each assumption can be used. It thus may be argued that Saddler

and Donnelly's 'most likely' scenario is in fact not the most

likely nor the most desirable future for Tasmania. However, the authors stated:

'In selecting possible combinations of growth rates, we have noted the assumptions used by

the Department of National Development and Energy in its recently published forecasting study. It used an oil price growth rate of 2%

p.a. as most likely, with a "severe

disruption" case of 5% p.a. The Department

used income growth rates in the range 2.5 to

4.5% p.a. aggregate (not per capita). Our

choice of 2% p. a. per capita is consistent

with this and with the relatively less

favourable outlook for economic growth in

Tasmania compared with Australia as a whole. With regard to electricity prices, our use of 0 and 2% p.a. increase covers the range

between the probably optimistic assessment of electricity supply authorities, that real

electricity prices will be held constant over the longer term, to the view that recent

price increase s presage a continuing

trend.•48

72

Table 4.6: Growth Rates Used for Projections (per cent per annum)

Most likely Cheap electricity High growth High income

High oil price HEC Average historical Extrapolation

2.0% 3.1% 4.2% 3.6% 1. 8%

4.2% 5.1% 5.9%

Source: Ev idence p.l64.

Directorate of Energy

4.77 In May 1980 the Tasmanian Directorate of Energy

commented at length on the HEC' s 1979 Report and the following

criticisms were made:

'It is not readily appa rent that separation

of demand data for the pe riod 1953-1978 into

two distinc t trend lines, 1953-1972 and

1973-1978, forms a statistically more

reliable basis for demand projection than

does the complete data set. Analysis carried out by the Directorate of Energy indicate

that a projection based on the complete data

set would be as statistically valid as one

based on the two sets. •49

'An appar ent inconsistency exists in the

methodology employed by the Commi ssion in its derivation of its projection. Whereas the

Commission has analysed historical demand in terms of growth per capita consumption, it

has projected growth in aggregate demand to

1984 in term s of an annual rate of incr ease

of 5.85 per cent, irrespective of population

growth over that period. •50

4.78 The Directorate produced its own estimates of demand by

disaggregating the general load into its various components and assessing each for its likely future r ate of growth . Included in

the ana l ysis of each component was a discussion of its potential for mod ification through conservation measures .

73

4.79 The Directorate concluded that 'the Commission's

projections in respect of the general load are reasonable'lS but produced estimates that were considerably lower than those of the HEC (Table 4.7).

Table 4.7: General Load- Projected Demand (MW av.l

Hou§.iog Estimate u..B2

High 436

* 427

Medium 425

* 416

Low 414

* 405

* Projected demand a ssuming con s ervation (Adjusted for distribution losses)

553 522

533 503

512 483

2000

772 625

679 589

637 552

Source: Directorate of Energy Report to the Co-ordination

Committee on Future Power Development, May 1980, p.219.

Harwood and Hartley

4.80 In 1980 the Tasmanian Conservation Trust published the

work of two authors, Chris Harwood and Michael Hartley, entitled 'An Energy Efficient Future for Tasmania•.52

4.81 In this work the authors studi e d the components of the

general load in great detail and e v aluated, using a number o f

methods, the effects that a conservati on programme would hav e on them.

74

4.82 On the basis of

conservation programme, 1995 the general load

the full implementation of their energy Harwood and Hartley predicted that in

would be only 289 MW av.53 This is

16 MW av. less than the average number of megawatts consumed for

1979.

Summary of demand forecasts

4. 83 A summary of all demand projections presented (Table

4. 8) reveals a wide range in estimates. In 1990 the discrepancy

between the lowest estimate (Harwood and Hartley) and the

highest estimate (HEC upper band projection) was 306.5 MW av.

The discrepancies for 1995 and the year 2000 are 316.3 MW av.

and 436.2 MW av., respectively. At each of the three time

periods the HEC forecast is greatest.

Table 4.8 - Summary of Demand Forecasts

u..w 1995 2000

HEC projection 515 637 781

band (463.5-595.5) (553.0-735.0) (648.5-898.5)

SWTC (NSW) 374.9 440.6 509.6

aggregate* 429.1 535.9 665.6

per capita* 429.1 53 5. 9 665.6

TWS (Canberra) 428 497 57 9

Saddler & Donnelly# 403 455 620

Directorate of Energy 425 533 679

with conse rvation 416 503 589

band 405-436 483-553 552-722

Harwood & Hartley 289

* Corrected for conversion from BAL to GL.

# Calculated from 1979-80 figure of 5732.4 kWh per ca pita and a

2% growth rate ('most likely') plus 12% for HEC use and losses.

HEC population figures used for conversion from per capita to

population projection.

75

McLachlan Group forecast54

4.84 that:

McLachlan Group in its report to the Committee stated

'It is our view that the forecast band of HEC

and many of the submissions is far too

narrow.'

NcLachlan Group adopted a forecast band width, similar to that used by the New Zealand Government, of five per cent in 1990,

ten per cent in 1995 and 20 per cent in the year 2000. McLachlan

Group also stated that there was a probability of one in four

that the actual demand would be outside this band.

4. 85 McLachlan Group reviewed the demand projections of the

HEC, the Directorate of Energy and the South West Tasmania

Committee (NSW). It did not include the projections of Saddler and Donnelly, Harwood and Hartley nor the Directorate of Energy projection with conservation and band widths.

4.86 McLachlan Group's forecast of demand was made

subjectively by considering the projections made by the HEC, the Directorate of Energy and the SWTC(NSW). McLachlan Group stated: 'we believe that HEC figures would be towards the higher side of a wider band and thus our projection is:

505 MW for 1990, 590 MW for 1995 and 742 MW

for the year 2000'.

The McLachlan Group band, based on the percentage variations

given above, are:

1990- 480 to 530 MW av.,

1995- 531 to 649 MW av.,

2000 - 594 to 890 MW av.

76

Factors which may Modify Demand

Co-generation

4.87 Co-generation is the simultaneous production of process heat and electricity from a single energy source. The energy

efficiency of co-generation is high, 75-80 per cent, compared to conventional thermal electricity generating systems which have an average efficiency of about 35 per cent. After discounting

for the value of the process steam, the fuel consumed in the

production of co-generated electricity is less than half that needed in conventional thermal power stations.55

4. 88 Co-generation is not a new concept and the technology

is well established. In Australia about eight per cent of the

nation's electrical output is privately generated and most of this is through industrial co-generation.56

4.89

4.90

Two types of co-generation systems are currently used:

'- Topping cycles, in which the electricity

is produced first and the thermal exhaust

from the prime mover is used as industrial

process heat.

Bottoming cycles, in which is produced for process use

heat is then recovered as an

for generating electricity. •57

thermal and the

energy

energy waste source

As outlined by the Tasmanian Department of Industrial

Development:

'The type of system chosen will depend on the

balance of electrical and th e rmal energy

required and the level of waste heat

available. In practice the more usual

arrangement has been the t o pping cycle

employing a back-pressure steam turbine as

the prime mover. This system necessitates the installation of high press ure steam

generators. Therefore, pre-existing low

77

4.91

pressure steam generation equipment reduce co-generation potential e conomic life of the plant. •58

tends to

for the

Co-generation is particularly suitable for industries which produce process heat from boilers primary fuels such as fuel oil, distillate, coal

use in

fired by

and wood

wastes. The pulp and paper industry is well suited to

co-generation.

4.92 Co-generation has been used in Tasmania for over 40

years and at present three companies produce some of their

electricity by the process,59 The Associated Pulp and Paper

Mills (APPM) plants at Burnie and Wesley Vale have co-generation equipment to the in s talled capacities of 12 MW av. (Burnie) and

4 MW av. (Wesley Vale). In 1981 the average outputs of these

plants were 3.2 MW av. and 1.3 MW av. respectively.

4.93 The potential expansion of co-generation in these three

plants was reviewed by the Tasmanian Department of Industrial Development in its submission to the Committee. The Department stated that at APPM, Burnie it appears feasible to increase the amount of co-generated electricity to 5. 7 MW av. without undue difficulty or

re-arrangement; to

at

about Wesley 7.5 MW Vale

av.

'On

with some

the criterion

plant that

co-generation should not cause an

consumption of petroleum products no and at Electrolyti c Zinc Company (EZ

overall increase in the

potential exists Co.), Risdon there is no

potential further co-generation with

installati on . 62 APPH stated in evidence to the respect to their mill at Burnie:

the existing

Committee, with

'If ... capital was available for suff ici e nt

generating capacity to be installed so that

both intermediate pressure and low pressure steam could first pass through back press ure turbines to generate electrical power, the

average generation would be about 9 megawatts ••• r62

78

4.94 The extent to which other industries could adopt

co-generation was the subject of considerable debate in both

submissions to the Committee and external documents. Views range from the belief that co-generation is the panacea for Tasmania's energy problems63 to the belief that there is little potential

for the economic expansion of co-generation in the State's

industry.64

4.95 The Tasmanian Department of Industrial De velopment

(DID) assessed in detail the co-generation potential of existing Tasmanian industries in its submission to the Committee, 65 The Department carried out its analysis on the assumption that

co-generation should not result in a net increase in the

consumption of petrol eum products and th e industries were

grouped with regard to the principal fuel used, steam pr ess ure

and perceived potential, or lack of it, for co-generation.

4.96 A s ummary table was provided by DID of 'The technical

potential for further co-generation over and above the existing actual and existing potential figures. •66

Company

Tioxide EZ Risdon ANM Temco

1'QTAL_ -----------

Source: Evidence, p.2568.

Technical Potential

5 - 7 MW av.

2 - 10 MW av.

8 - 11 MW av .

6 Mvl av.

21- 34 NW av.

4.97 However, in the discussion pr ior t o this summary a

number of groups of industrie s which produce low pressure steam

were dismissed with th e sta tern en t that ' a t p r ese nt

th e refore there generating potential companies

plant installed for co- ge neration were rejected i n

and of electricity•.6 7 this wa y . A less

79

In

there is no

exists no

total, 10

conservative

approach would have included these companies, with the proviso that generating plant would need to be installed. The DID

estimate of 21-34 MW av. is not set within any time frame; thus

it is implied that this amount of co-generated power would be

almost immediately available.

4.98 Although the HEC stated in its submission to the

Committee that 'co-generation was taken into account in

determining the amount to be included in the Major Industrial

provision in our forecast •68, it had not previously provided an estimate of the amount of co-generation it saw as eventuating. These figures were: 1985 - 18.5 MW av., 1990 - 20.5 MW av. and

1995 - 56.2 MW av.69 The HEC also stated 'unofficial advice from the Energy Policy Unit is that the technical potential for new

plant in existing industries over the next decade is 21-34 MW

average' .70

4.99 As pulp and paper mills use large volumes of process

steam and have access to wood wastes it has been frequently

suggested that their potential for co-generation is high.

Comparisons with other countries, such as the United States of America, Canada and Sweden, have been used to illustrate that

co-generation would, in some instances, even produce more

electricity than would be needed by the mill.7l However, the HEC and the Department of Industrial Development pointed out that in Tasmania thermo-mechanical pulping is most frequently used whereas chemical pulping is used in most other countries. 72 In

contrast to chemical pulping, thermo-mechanical pulping results in only limited co-generation potential.

4.100 APPM currently co-generates about ten per cent of the

electricity used at each of its Burnie and Wesley Vale mills. If co-generation were increased to 9 MW av. at the Burnie mill this would r e present about 28 per cent of the mill's requirements.73

80

4.101 Australian Newsprint Mills (ANM) submitted that with a number of technical changes and expansion of plant ' ••• it would be possible to co-generate a total of 21 MW peak (say 19 MW av.)

of the 145 MW av. total electricity requirement for a four

machine mill'.74 Co-generated electricity would therefore be 13 per cent of the total required. The Chief Engineer at ANM, Mr

B.P. McLaughlin, in an address to the Mechanical College

(February 1982) concluded that 'the potential for co-generation of electricity in the pulp and paper industry in Tasmania would cover only QD& of its electricity requireme nts - that i s ,

around 30 MW average'. 75 However, in a letter to the Honourabl e

K.E. Newman, M.P. (2 May 1979) McLaughlin had stated:

' .•• because of the need for process steam at

our Boyer Mill, we could generate two thirds

of our el e ctricity requirements as a

by-product of steam raising. In oth er words, in round figures, we could generate fort y

megawatts and purchase twenty megawatts

rather than the si x t y megawatts we purchase

at present. •76

4.102 If co-generation potential exists in Tasmani a why has

it not already been developed? The HEC submitted that 'there are no technical barriers to co-generation in Tasmania and no

penal ties regarding connection to the pow e r supply system'. 77 The Department of Industrial Development submitted that where

co-generation is technically feasible the con s trai nts to

implementation are principally economi c . 78 That i s , that the

resultant price of co-generated electricity is greate r than the price at which it can be purchased from the supply authority .

This is not surprising as e lectricity in Tasmani a is chea p,

particularly for those compa n ies holdi ng discounted bulk

contracts with the HEC.

81

4.103 However,

submissions and it has been pointed out in a number of

related reports that the barriers to

not economic but co-generation administrative in

and Tasmania are

political.79 The principal objection are to

co-generation by supply authorities appears to be based on the argument that malfunctions in the consumer's generating

equipment may create disturbances in the authority's system but this was refuted by a number of sources.BO

4.104 A further controversy is centred on the amount to be

paid by a supply authority for surplus co-generated electricity. Supply authorities generally believe that this amount should be less than or equal to the cost of normal supply whereas

advocates of co-generation believe that these pay-back tariffs should reflect the cost which co-generation avoids.Bl

4.105 The previous Tasmanian Government, realising that

energy management was required in the industrial sector, carried out a study on the potential for co-generation and intended to

pursue initiatives in an attempt to overcome the barriers to its implementation that the Government had identified.82

4.106 The policy of the present Government has not yet been

made available. However, a recent media release stated:

'On the industrial side the Premier announced that energy management services are being

provided by the Hydro-Electric Commission's Energy Management Centre and furthermore a report addressing the matter of co-generation in industry is expected to be presented to

the Government in the near future. •83

4.107 Clearly disagreement exists in all aspects of

co-generation. However, it has also been made clear to the

Committee that co-generation is a.n important aspect of energy use in Tasmania.

82

Energy conservation

4.108 Until recently the use of electricity in Tasmania was

actively promoted by the HEC. Although the need for a more

conservative approach to its use has now been recognised, there is a wide disparity of opinion as to the potential magnitude,

efficacy and economic feasibility of an electricity conservation programme.

4.109 In Appendix II of the 1979 HEC Report several aspects

of energy conservation in 'Possible Departures from these possible departures

the general Established load were considered Trends•.84 Included

as

in

were thermal insulation, domestic

solar space heating, solar water heating, appliance efficiency and heat pumps. The estimated amounts of electricity saved by

these means were 21 MW av. in 1990 (four per cent of deviation

from the projected demand), 46 MW av. in 1995 (seven per cent

deviation) and 85 MW av. in the year 2000 (11 per cent

dev iation). These estimates were not included in the HEC

projection for the general load but were used to assist in

establishing the lower limit of the demand band. However, in the HEC's submission to the Committee it was pointed out that the

effects of conservation were built into its future

projections. 85 But this assertion implies that the same

proportion of electricity will be conserved in the future as has been conserved in the past. This can be interpreted to mean that

little or no allowance has been made by the HEC for an energy

conservation programme.

4.110 In discussing energy conservation in the industrial

sector, the HEC stated: in this instance conservation, or

more properly the more efficient use of electricity, does not

usually result in any electricity becoming available for other uses. Rather, conservation enables the major industrial customer t o produce more products for the same contract entitlement of

electricity•.86 This argument, however, ignores the

83

possibility that electricity can be 'purchased' through greater efficiencies which leaves available for other purposes the

electricity an industry would have otherwise taken.

4.111 Harwood and Hartley, in their presentation of 'An

Energy Efficient Future for Tasmania' ,87 came to conclusions substantially different from those of the HEC through the

rejection of the premise that past trends could be projected

into the future. They began instead with an examination of the

demand for electricity at its various points of end use. The

general load was considered in terms of space heating, water

heating, residential appliances, commercial-institutional, lighting and unread meters. Industrial electricity use included consideration of both general load industries and the major

industrial load companies. Harwood and Hartley's analysis of future demand considered the likely impact of sociological and technological factors and assessed the potential for increased efficiencies in each of these sectors.

4.112 The level of demand projected by Harwood and Hartley

for the year 1995 was 1105 MW av., which consisted of 816 MW av.

for industrial use and 298 MW for commercial use. This estimate

was 283 MW av. less than that made by the HEC for 1995 and it

was through this difference that Harwood and Hartley argued that there was no need for further generating plant at least to the

year 2000.88

4.113 In its report of May 1980 to the Co-ordination

Committee on Future Power Development, the Directorate of

Energy critically reviewed Harwood and Hartley's proposals and concluded that they did not represent adequate prescriptions for immediate policy action. 89 The Directorate justified this

criticism with the comment that the assumptions, qualifications and judgements made in 'An Energy Efficient Future for Tasmania' were essentially subjective.

84

4.114 The Directorate carried out its own analysis of the

potential savings that could be made in various sect ors of the

general load and provided estimates for the years 1985, 1990 and 2000 of 2.1 per cent, 5.6 per cent and 13.3 per cent savings,

respectively.90 However, in the Directorate's projection of demand for the general load these potential savings were not

taken into account. In its lengthy discussion of the major

industrial load the Directorate did not consider energy

conservation so that the total load proj e ction mad e no allowance for potential electricity savings. The Directorate nevertheless recommended that it be given the task of preparing a detailed

energy conservation programme.

4.115 A number of submissions made to the Committee supported

the approach taken by Harwood and Hartley. The South West

Tasmania Committee (NSW) in fact stated that the Harwood and

Hartley programme was ' ve ry modest' and that, due t o a high

degree of wastage in Ta sm ania, the potential for electricity

savings in s ome areas was very large.91 The Tasmanian Wilderne s s Society (Hobart Branch) in evidence t o t h e Committee stated: 'A

15 per cent energy saving programme for Tasmani a 's grio when the Pi eman scheme is complet e d will provide 150 megawatts' .92

4.116 The Comm o nwealth Department of National Development and Energy (DNDE) in its submission to th e Committee assessed in

some detail the potential for s avings in t he rr:a in electrici t y

consuming sectors of Tasma nia and estirrated that:

in the indust r y/comme rc e s ector sa,;ir.gs of c:;bo ut

10.6 per cen t could be r:·.ade

represents 7. 9 per ce nt of

gen e r a ted in 1980-81; and

85

by

tcta l 1985, wr.icf.

el ectricity

in the residential sector savings of 9. 0 per cent

could be made by 1985 which represents 1.9

per cent of the total electricity generated in

1980-81.93

In summary, the Department stated:

1

The total potential electricity savings for Tasmania in the two sectors is thus

conservatively estimated at 780 GWh by 1990. It is equivalent to one third of the forecast

increase in Tasmanian electricity demand in the period 1979-80 to 1989-90. 1 94

4.117 The Department of Industrial Development, in its

submission to the Committee, repudiated the DNDE analysis and maintained that the lack of detailed local knowledge has

led to errors in conclusions 1 .95 The Department of

detailed analysis and Industrial Development carried out its own concluded 1 that there is a potential for 85 GWh p. a. in the

industrial/ commercial sector and 22 GWh p. a. in the domestic

sector. This total of 107 GWh p.a. is equivalent to about 12 MWa

whereas the DNDE estimate of 780 GWh p. a. amounts to nearly 90

MWa. 1

4.118 Both the Department

Tasmanian of National Development and

Energy97 and the Wilderness Society (Canberra

Branch)98, among a number of others, submitted that the

potential for electricity conservation, whatever magnitude it was determined to be, could not be realised without the removal

of a number of non-technical barriers. DNDE summarised these

barriers as follows:

lack of awareness and information about the benefits and methods of reducing

energy consumption;

the costs of

stock, lack

control of

tenants);

charging existing capital of finance, inadequate

energy expenditure (eg

86

4.119

an apparent preference by management in industry towards increasing output

rather than reducing costs;

social factors, such as habit,

and

fashion, consume r status, aesthetics expectations; and

institutional and such as existing

administrative arrangements, alternatives. •99

structural factors, laws and regulations, and constitutional

and lack of

Further to this, it was generally pointed out in those

submissions advocating a comprehensive energy conservation programme that the implementation of such a programme relied

entirely on a rev ised Gove rnment policy and initiatives. To this end Harwood and Hartley provided a timetable setting out when

major administrative actions were requirea.lDO A numbe r of

submissions also maintained that electricity c ould be provided through energy conservation at much lower cost than if the

electricity was generated through the construction of a new

power scheme.lDl

4.120 In April 1982 the then Labor Government of Tasmania

issued an 'Energy Policy statement' which outlined programmes for domestic energy conservation, commercial a nd public

buildings energy conservation, industryl02, although estimates available through these programmes

and energy conservation in

of t h e potential sav ings

wer e not made. The present

Government has not issued an e nergy policy statement as yet. A

recent media release, however, stated that th e 'Gov e rnment will not be proceeding with the proposal t o introduce building

regulations governing the ins ulation of new buildings (as) these regulations were incon si s tent with the Go vernment's policy of cutting red tape and deregulation. In s tea d, the Government would be seek ing to encourage insulation throu gh o th e r mechanisms such

as med ia campaigns and the production of literature which

87

demonstrated the benefits of insulation in terms of reduced

heating costs and higher comfort levels. •103 The Tasmanian

Government will co-ordinate this promotion through the

Hydro-Electric Commission Energy Management Centre.

4.121 It was pointed out to the Committee in a number of

submissions that a comprehensive energy conservation programme would provide increased employment opportunities in a number of sectors. Harwood and Hartley analysed employment arising from their programme and concluded:

'Assuming that the alternative investment

program that we advocate is adopted, there

would be just as much direct employment

provided over the period 1980-1995 as that

which would have been provided by the entire

integrated development of th e Gordon,

Franklin and King Rivers. •104

Forecast of Demand

4.122 Earlier in this chapter, the Committee exarr,ined future

demand for the major industrial load and for the general l oad

separately. It also examined energy conservation and

co-generation as factors which can moderate growth in demand.

4.123 The difficulties facing forecaster s in making accur at e

pr oject ions of future d ema nd for electricity in Tasmania became ve r y obvious to the Committee and ar e exemplified in the wide

divergence of estimates in

demand studies undertaken

demand

by

organisations and by individuals.

con tained in

both official

the and

var i ou s other

4.124 A major difficulty is the size of the systerr .. In a

small electricity supply system, such as that in Tasmania, not

o nly is demand morE: unpredictable but relc:tively sr:.alJ

unforeseen additions or reduction s in demand can have an i r.1pac t on t he system. Any forecast of demand needs to tak£: account o f

thi s factor.

88

4.125 Growth in demand for the major industrial load i s

sensitive to fluctuations in international economic conditions as well as to the state of international markets for the

individual industries operating in Tasmania. Even disregarding the current economic recession, it is virtually impossible to

make correct predictions about the international economic

climate in 10, 15 or 20 years time. This adds to the dif f iculty

of forecasting demand for power over that period of time.

4.126 Most statistical and econometric studies of the general load depend largely on the assumptions made or the values

assigned to the variables used in them. Those assumptions and

values are

s i gn ificant

conditions,

necessarily changes in

may well turn

subjective and, in the event of

the pr evailing economic or social

out to be wrong. This will in turn

affect the accuracy of the forecast of demand.

4.127 In its 1979 Report the HEC made pr ojecti ons for demand

for each year up to the year 2000 (see Ta b l e 4 ) . Th ese

projections have been reiterated in subsequent documents. In its recently published Annual Review for 1981-82, the HEC drew

attention to the generally depressed economic situation but

added:

'However these short term economic fa ctor s

hav e given no reason for the Commission to

alter its long term load projection. •105

4.128 Recognising that various fa ctor s ll'.ay rr.odify growt h in

demand, the HEC placed its demand projections within a forecast band the upper limit of which was 2 . 06 per cent abov e the

projection and the lower limit 4.80 per c en t belov; the

p r o ject i o n. Provision wa s al so n ade for the forecas t bar.d t o be

ex tended to 2. 96 per ce nt below and 6. 89 per c e nt atJove the

dem and projection if extremes ir. the HEC' s ;r,odifyir.g factors

89

were reached. Even with the extended forecast band, the HEC did not allow itself much margin for error should unexpected

variations in demand occur.

4.129 The HEC' s forecast should be considered in the context

of its forecasting record and the uncertain future of the

Australian and overseas economies. The South West Tasmania

Committee (NSW) drew attention to the past forecasting

performance of the HEC in its submission to the Committee. It

stated:

'On the basis of historical precedent alone, the HEC figures on possible future demand

growth ought to be questioned. In the

accompanying graph (Fig.lO) we have shown the recent growth in the utilization of the

system, compared with the figures predicted by the HEC in 1971 in its report on the

Pieman scheme (HEC, 1971). Figures taken from HEC-supplied data show that growth in the

period 1971-81 was overestimated by 300 MW or 90% (av erage loading) and by 423 MW or 94%

(peak loading). The growth figures (in MW and MW av) predicted and actual are:

MW in MW in Total Annual

1981 1970 Growth Growth

M

(Pred. 1648 779 889 7.27

Peak (

(Act. 1225 779 446 4.21

(Pred. 1208 572 636 7.02

Average (

(Act. 908 572 336 4.28

We would like to note here that such figures, as tak e n

from HEC publications, are not entirely reliable becau s e the quoted figures for a particular year seems to change

from issue to issue in the Annual Review. •106

These figures are also shown clearly in the following graph.

90

Figure 4.5: Comparison of Predicted Tasmanian Electricity Load with Actual Load

,-.

1500

10 00

" of) " 6

500

----- HFC Pre

--- Real i ty

PE AK

PREDICTION vs REALITY

1970 1975

Source: Evidence, page 2167.

91

I

198 ()

4.130 The Committee is of the opinion that the HEC' s record

in forecasting demand combined with the uncertain economic

outlook do not give credence to the HEC's narrow forecast band. The band does not take sufficient account of unforeseen

variations in demand which might arise from situations beyond the control of the HEC or the Tasmanian Government.

4.131 McLachlan Group drew upon the experience of the New

Zealand energy forecasters in formulating its forecast of

demand. Although about three times the size of the Tasmanian

electricity system, the New Zealand system is sufficiently

similar in nature, with its predominance of hydro-electric

capacity, to be used as a comparison. In New Zealand, the

forecast band is extended to five per cent above and below the

projection in a ten year forecast, ten per cent in a 15 year

forecast and 20 per cent in a 20 year forecast. The New Zealand

authorities also incorporate into their forecasts the

probability that there is a one in five chance that demand will

fall outside the forecast band. Although McLachlan Group

accepted the percentage variations used in New Zealand, it

adjusted the probability factor to one in four to compensate for the fact that the Tasmanian system is only about one-third of

the size of its counterpart in New Zealand.

4.132 The McLachlan Group forecast of demand is compared with

the HEC forecast in Table 4.9. It should be remembered that the

McLachlan Group allowed for a one in four probability of demand falling outside that forecast band.

92

Table 4.9: Comparison of the HEC and McLachlan Group's Forecasts of Demand for Electricity

MW AVERAGE

Year HEC McLachlan Group

.Lmitl I&tlll P;rQjec-

.L.imi..t .liQn .L..il!lll .kim.il .tiQn L.im.i,J;

1990 1191 1216 1262 1095 1153 1211

1995 1342 1388 1443 1134 1260 1386

2000 1506 1582 1648 1186 1482 1778

SQu;rce: McLachlan Group Report of 24 August 1982.

4.133 The final forecast is still largely subjective. For the

general load, the projection of historical population and per capita consumption trends and the use of economic studies are

useful tools to give some indication of future demand. However, their accuracy will depend on the assumptions made and the

values ascribed to the variables used in them. The small size of

the population and the electricity generating system tend t o

compound the difficulties. Any projection s of future demand,

whether formulated by McLachlan Group, the HEC or any oth e r

interested party, cannot be certain of being fulfilled. It is

essential, therefor e , that the upper and lower limits o f the

forecast band be sufficiently wide to c o pe with unex pected

variations in demand.

4.134 Ha v ing considered all these fact o r s , the Committee is

of the opinion that the McLachlan Group forecast of demand is

the most realistic of the forecasts presen ted t o the Comm ittee. It is on the basis of the McLachl a n Gr ou p f or eca s t, a n d its

provisions for unpredictability, that th e Committee c o nsiders the supply options in Part II of this report.

93

4.135 Tables 4.10 and 4.11 show the supply shortfall as

forecast by both the HEC and McLachlan Group in the years 1990, 1995 and 2000 after the completion of the Pieman hydro-electric scheme, the installation of the third machine in the Gordon

Stage One power station and the raising of the Great Lake. The

figures in Table 4.10 exclude power from the thermal station at

Bell Bay and Table 4.11 includes that thermal power.

Table 4.10: Total System Average Capacity Supply Shortfall Excluding Thermal Power From Bell Bay

Year

1990

1995

2000

So!Jrce:

SUPPLY SHORTFALL

(only hydro-electric power considered) MW average

DEMAND FORECAST

HEC McLachlan Group

l&.:i:Ltl_ .LQiltl

.L.i.miJ;_ .t.i.Qn .r....iJnil .Limil .ti.Qn

143 168 214 47 105

294 340 395 86 212

458 534 600 138 434

McL achlan Gr o up Report of 24 August 1982.

94

.lJ..IW.tl kiJ:ni__t

163

338

730

Table 4.11: Total system average capacity supply shortfall including thermal power from Bell Bay

FORECAST

Year

1990

1995

2000

NQll_;_ forecast.

SUPPLY SHORTFALL (total system considered) MW sverage

HEC McLachlan Group

l&'tLtl .I&tl.tl

.L.i1!l.i.t tion Limit .L.i.m..il .ti.Qn

(19) 6 52 (115) (57)

132 178 233 (76) 50

296 372 438 ( 24) 272

indicates figure is a surplus of supply

DEMAND

!.llm.tl Limit

1

176

568

against

source: Group Report of 24 August 1982.

4.136 These tables show that if the lower limit of th e

McLachlan Group's forecast band were achieved, little or no

addi tional capacity would be needed this century . On the other

hand, should the uppe r limits be attained, the potential

hydro-electric capacity remaining in Tasmania would be

insufficient to meet that demand. It is likely that demand will

actually be somewhere the two extr emes but if a high grow th in

demand eventuates a major new generating facility wo uld need to becom e operational in the mid 1990s. However, any supply

strategy should therefore take account of the uncertainties

inherent in forecasting demand in Tasmania.

95

PART II

SUPPLY OPTIONS

CHAPTER FIVE

FEASIBILITY OF SUPPLY OPTIONS

Sources of Electrical Energy

5.1 Electricity can be produced in three different ways:

(i) by generators, (ii) by semi-conductors, and (iii) through

electro-chemical reactions (Figure 5.1).

Figure 5.1: Sources of Electrical Energy

Energy Source

WATER

Impoundments

Tidal Dams-----­

--- Wave Motion__-

GAS SOLAR GEOTHERMAL OCEAN/LAKE THERMAL WIND ---------------------------GAS SOLAR PONDS PETROLEUM SOLAR -------------------------HYDROCARBONS ------------------Conyers ion

Machinery

General Process

WATER TURBINES

STEAM

WIND TURBINES

GAS TURBINES

DIESEL GENERATORS

PHOTOVOLTAIC CELLS

FUEL CELLS

-----SEMI­

CONDUCTORS

ELECTRO­ CHEMICAL REACTIONS

Source: taken from information generally a v ailable.

97

5.2 Generators have been used for many decades in a wide

variety of situations. Turbo-generators are more common than diesel generators and are usually driven by water

(hydro-electricity) or steam (thermal electricity). They are less frequently driven by gas, wind or internal combustion

engines.

5.3 A range of primary fuels can be used for the production

of steam in thermal power stations: coal, oil and gas are most

commonly used. To a lesser but increasing extent, uranium, wood and wastes are also used. Recent technological developments have resulted in the use of solar, geothermal, ocean and lake thermal energy sources for the production of steam.

5.4 Although a range of primary fuels can be used to

generate steam, each thermal power station can be operated only on the particular type of fuel for which it has been designed.

5.5 Both semi-conductors and electro-chemical reactions for the generation of electricity are relatively new processes.

Research is continuing for both techniques and so far only

small-scale plants have been built. However, recent developments have indicated that both, and in particular semi-conductors in the form of photovoltaic cells, could be available for

large-scale, economical electricity production within the next 10 to 15 years.l

5. 6 The general process, conversion machinery and primary

energy source chosen for a particular power station will depend on a number of factors, the two most important being (i) the

amount of electricity required, and (ii) the availability and

price of primary energy s ources.

98

5. 7 For large power requirements the conversion

most widely used are coal or oil-fired thermal power

and impoundment or run-of-river hydro-electric power This reflects the relative availability of coal, oil compared with other primary energy sources.

processes stations stations. and water

5.8 Primary energy sources can be divided into two groups

based on whether they are self-renewing. The main non-renewable primary energy sources are petroleum based fuels, coal, gas and uranium whereas the main renewable energy sources are water or solar based.

Feasibility

5.9 For an electricity supply option to be feasible it must

satisfy a number of technological, financial and economic

requirements. When more than one option' is feasible the final

choice may be influenced by the social and environmental factors of each option.

Technological feasibility

5.10 To be technologically feasible a power supply option

must fulfil most, if not all, of the following criteria:

(i) that the time taken to design and construct the supply

option is less than the time interval between the

recognition of the need for more power and the

realisation of that demand;

(ii) that the technology of the conversion process is proven

and reliable;

(iii) that the machinery is commercially available and

logistically possible to install;

99

(iv) that the primary energy source can be stored so that it

is available on demand, or the option can be integrated with other options that can provide power on demand;

and

(v) that the power produced is not greater than the reserve

capacity of the electricity supply system.2

5.11 The importance of these requirements generally

increases as the size of the increment of power required

increases. In other words, as more dependence is placed on one

source of power the reliability of that source needs to be

increased.

5.12 The time taken from the initial planning to the

commissioning of an option, the lead time, may vary considerably both among and within each option. Development schedules can be deliberately slowed down or accelerated and 'off the shelf'

designs may be commissioned in less time than designs which must meet site-specific requirements.

5.13 With the

electrical power is

exception presently of hydro-electricity, most

generated through the use of

non-renewable resources (coal, oil and gas). The energy crisis of the 1970s, precipitated by uncertainties in the availability of petroleum, led to a greater interest in conversion

technologies that use renewable primary energy sources. As a

result of this research the technological status of some options 1s currently changing so that , although not presently 'pr oven

and reliable' and 'commercially available' for large-scale use, they are likely to be feasible within the next 10 to 15 years.

Research has also been directed towards improving th e efficiency of existing conversion processes which use non-renewable fuels. The long-term options available to a supply authority ar e

therefore more diverse than the short-term options.

100

5.14 Some primary energy sources can be easily stored, for

example, water in dams or fuels for thermal power stations.

Others, such as wind and solar energy, cannot be stored. As yet,

no method for storing electricity in large amounts has been

devised. In any electricity supply system a certain amount of

electricity is required at all times (the base load). However,

hourly, daily and seasonal fluctuations in the consumption of electricity produce peaks in demand. This means that at least

part of the supply system must be able to respond quickly to

changes in demand, that is, it must use storable energy.

However, most storable energy sources are non-renewable while most non-storable energy sources are renewable. The two

exceptions to this general rule are water and wood. The ability to store water, a renewable resource, in large impoundments

makes it a particularly valuable source of energy.

5.15 It is preferable to have in an electricity supply

system a mixture of components so that renewable energy sources can be used when available, and storable, non-renewable energy sources can be used when the former are not available.

5.16 Some conversion machinery can be started and stopped

more easily than others. Therefore, those components which can be brought on line quickly are better used for peak requirements while those components which cannot are more efficiently

operated continuously for base load requirements.

5.17 Hydro-electric turbines can be brought on line rapidly

whereas thermal power stations generally take several hours to start up. Therefore, the latter are generally used for base load while the former can be used for either base or peak loads,

although run-of-river power stations do not have large storage capacities and are usually used for base load requirements.

101

5.18 The fifth criterion for technical feasibility, that the

power produced by the new component is not greater than the

reserve capacity of all other components, is important not to

the operation of the system but to system maintenance. When a

component is shut down, or a breakdown occurs, the amount of

electricity normally contributed by that component must be made up by the rest of the system. If this amount is too large it

cannot be accommodated without overloading the system.

Financial feasibility

5.19 To be feasible financially a power supply option must

satisfy two basic criteria:

(i) that the total capital cost is not in excess of the

finance available; and

(ii) that the revenues available from the sale of

5.20

electricity are operating costs capital invested.

sufficient both to cover the direct

and to provide an adequate return on

The capital cost of conversion machinery varies both

among and within options. Economies of scale are often achieved;

the size of the plant is therefore important. The capital costs

of options currently undergoing technological improvements are difficult to estimate, but it is possible that several options

which are uneconomic at present will become economic within the next 10 to 15 years.3

5.21 power

The

supply cost of electricity generated option is a function of the

by any particular

total cost of the

option, calculated over its entire construction and operating life, divided by the revenue received from the output of that

option throughout its operating life.

102

5.22 The price paid by consumers for electricity depends on

whether a marginal pricing system or an average pricing system is used. In marginal pricing systems the cost per unit of

electricity generated from the additional component is charged whereas in average pricing systems the cost is averaged for all

units of electricity generated from the entire system.

5.23 Determining the maximum price consumers are willing to

pay involves value judgements and is complicated by the presence or absence of electrical energy substitutes.

Economic, social and environmental factors

5.24 and

An electrical power supply option

financially feasible, yet may not

may

be

be technically acceptable for

economic, social, environmental or political reasons.

5.25 Although a supply authority ma y be able to finance a

power development project, a number of other economic factors

must be considered, such as the effect that financing one public works project may have on other projects and the flow-on effects of funding particular projects.

5.26 Important social considerations incl ude the employment potential of each option, in terms of both the quality and

quantity of jobs engendered; and the social problems associated with the collection of primary energy s o urce s and the disposal

of waste products.

5. 27 The environmental impact of electricity generation is

not only specific to each type of option, but t o the particular

site chosen for the power station and associated works. The

Committee has received submissions4 which argue that the

environmental implications o f a power supply opt i on should weigh equally with economic implications i n the deci s i o n- making

process . In some cases the 'cost ' of protecting the environment

can be measured in monetary terms but in other cases it cannot.

103

Options available to Tasmania

5.28 In order to determine

potentially sui table for use

the in

electricity Tasmania, supply options the Committee

initially considered the technological feasibility of all

available options (Table 5.1).

Table 5.1: Technological Feasibility of Electricity Supply Options

Source of Electricity

WATER TURBINES

Impoundments(4)1 Run-of-r iverl Pumped storage2

Tidal Dams3

Wave motion3

STEAM TURlllllli.S

Coall

Gasl

Wastes3

Range of Unit Size (1)

(MWl

10-500 p

l-100 p

l-100 p

60-800 p

10 R

200-800 p

200-800 p

200-800 p

10-200 p

50-200 p

104

( 2)

SR

SR

SR

SR

sc

NU

NU

NR

NU

NR

(3) Suitability

R* Suitable

R Suitable

R* Suitable

R Insufficient

tidal range in

Tasmanian waters

R Not commercially

available

N* Suitable

N* Suitable

N* Gas resources

not available

R* Suitable

R* Insufficient

wastes avail-able for large plant

Uranium3 600-1200 p NR N* Plant size

incompatible with present system

Solar3, 8 1-100 R NU R Not commercially

available

Geothermal3,5 5-100 R SR N/R No sites avail-

able in Tasmania

Ocean/Lake 10-1000 R SR R No sites avail-

thermal3,9 able in Tasmania

NU:ID 0 0.1-2 R sc R Probably

suitable in long

term

GAS 'IlJRIUNES

Gasl 200-500 p NR N* Gas resources

unavailable

Solar ponds7 5-50 R SR R* No sites

suitable in Tasmania

DIESE!l l-10 p NU N* High consumption

GENERATQRSl of expensive

non-renewable resources - low efficiency

CELL l-100 R sc R Probably

ARRAYS ,6 suitable in long

term

EUEL CELLS3 50 R NR N* Not commercially

available

INTER- 150-300 p SR Subject to

CQNNEC'nQN3, 11 negotiation with

Victoria

(1) STATUS OF TECHNOLOGY P proven and reliable

R technology proven for small or experimental output,

currently undergoing research

105

(2) SITE AND RESOURCE AVAILABILITY SR site specific, sites or resources restricted in

Tasmania

sc site specific, sites or resources common in

Tasmania

NR - not site specific, resources restricted in Tasmania NU - not site specific, resources unrestricted in Tasmania

(3) PRIMARY ENERGY SOURCE - RENEWABILITY AND STORAGE CAPACITY R renewable

N non-renewable

* energy can be stored

(4) SOURCES OF INFORMATION

5.29

1. Information generally available. 2. Evidence p.822 and pp.23ll-2313.

3. HEC Report 1979, Appendix III.

4. Evidence, pp.2017-2144.

5. Layton, D.W. and Morris, W.F. 1981, Geothermal Power; Chern. Eng. Prog. 77 (4) 62-67.

6. Maycock, P.D. and Stirewait, E.N., 1981, Solar cell

systems that work, IEEE Spectrum, 78(9) 48-53.

7. French, R.L., 1981, Solar ponds: using salt water to

produce power. Ind. Res. and Dev. 23 (12); 100-104.

8. Baum, R.M., 1982, Solar electric power plant due to

start up. Chern. & Eng. News, 60(11) 27-29.

9. Krenz, J.H., 1980, Energy from Opulence to

Sufficiency, Praeger Pub. N.Y.

10. Evidence, pp.l933-1998 and pp.3337-3395.

11. Zeidler Committee Report.

A number of were found

technologically feasible, options with respect to

to

the

be not

criteria

previously discussed, for development at any time in Tasmania:

106

( i) there were no sites suitable for

geothermal, ocean or lake thermal schemes, or solar steam turbines;

tidal dams,

solar ponds

(ii) wave motion schemes and fuel cells were not

commercially available and were not likely to be so for some time; and

(iii) there were

available in insufficient Tasmania for primary energy sources

gas steam turbines, waste

steam turbines and gas turbines.

5.30 A number of options were considered to be not feasible

for development in the next decade but may be sui table for use

after this:

(i) photovoltaic cell arrays and wind turbines were found

not to be in wide commercial use but evidence presented to the Commit tee indica ted that technological advances could make these two options feasible within the next

15 to 20 years; and

(ii) a nuclear power station, having a necessarily large

output level, was concluded to be incompatible with the expected size of the Tasmanian generating grid in the

next decade but may be compatible after this.

5.31 The options considered by the Committee to be

technologically feasible for development in the next decade

were:

(i) impoundment, run-of-river and pumped storage

hydro-electric schemes;

107

(ii) thermal power stations fired by coal, oil or wood; and

(iii) interconnection with Victoria.

5.33 Thus three major options (large hydro-electric schemes, thermal stations and interconnection) and two minor options

(small hydro-electric schemes and small thermal stations) would be available for development in the next decade. Three further options (photov ol taic cells, aerogenerators and nuclear power) are likely to be available for development in the next 10-15

years.

5.34 Descriptions of the options considered to be

technologically feasible for development in Tasmania in the next 20 years are provided in Chapter Six.

108

CHAPTER SIX

OPTIONS

Hydro-Electric Schemes

Introduction

6 .l About one half of the remaining hydro-electric

potential of Tasmania's waterways is located in the region of

the Lower Gordon, King and Franklin Rivers.l In its 1979 Report the HEC argued that the deve lopment of the hydro-electric

potential of these rive rs should be made on a regional basis as

any decision to devel op one rive r would affec t the potential for

the development of the other two. In line with this belief the

HEC presented two al terna ti ve proposals which used the three

river s in differ e nt wa ys . These proposals were termed the

Integrated Development and the Separate Development.2

6.2 The Integrated Development would consist of two

schemes: the Gordon-below-Franklin, which would produce 171.7 MW av., and the Franklin with King diversion, whi c h would produce 167.7 MW av. An additional smaller scheme at the Albert Rapids

would r esult in a total output of 365.3 MW av. from the

Integrated De ve lopment propo sal.

6. 3 The Gordon- be l ow -Fr a nklin scheme wculd hold the

combined flows of the Lower Gordon and Franklin Rivers at a

point just below the junction o f t he two ri vers . This

impoundment would cov e r an area of 133 square kilometres and

would have a capacity of 3100 milli on cubic metres. The Franklin scheme with King River diversion would involve the construction

109

of a dam and power station on the upper reaches of the Franklin

River, two kilometres downstream from its junction with the

Andrew River, and the diversion of the dammed King River to flow into the Franklin catchment. The impoundments created by these two dams would be 110.5 square kilometres and 47 square

kilometres, respectively, and would have capacities of 4139 and 837 million cubic metres. (For comparative purposes, Sydney

Harbour has a volume of about 500 million cubic metres.3) The

Albert Rapids scheme would be a run-of-river power station,

having a storage capacity of only 0.96 million cubic metres.

6.4 In the separate development of the Lower Gordon,

Franklin and King Rivers two impoundments would also be created, but instead of diverting the King into the Franklin River, the

Franklin would be diverted into the King River (the Huxley

Scheme, 128 MW av.) and the Gordon River would be dammed above

its junction with the Olga River (the Gordon-above-Olga scheme, 119 MW av.). A third, smaller scheme (the Sailor Jack scheme, 82 MW av.) would have a dam and power station on the lower reaches

of the King River.

6.5 The first stage of the Separate Development would be

the Gordon-above-Olga scheme. The impoundment would cover an area of 81.9 square kilometres and would have a capacity of 2262 million cubic metres. The Huxley scheme impoundment would

inundate 110.0 square kilometres and would have a capacity of

4165 million cubic metres.

6.6 The HEC has consistently regarded the Integrated

Development to be superior to the Separate Development as it

would produce cheaper electricity and as the Separate

Development would not meet the full range of the forecast load.

Recently the HEC changed its position slightly, with respect to the Integrated Development, to state: 'It is stressed that none of the schemes subsequent to Gordon-below-Franklin have yet been shown to be technically feasible they are not options

110

available for consideration at this time. •4 However, if the

Gordon-below-Franklin scheme were to be constructed, approval of the second phase of the Integrated Scheme would be greatly

facilitated by the facts that access roads to the new dam sites

would then already exist and that the wilderness value of the

area would have been reduced.

The Gordon-below-Franklin scheme

6.7 The Gordon-below-Franklin scheme (Figure 6.1} would

consist of one dam situated on the Gordon River one kilometre

downstream from its junction with the Franklin River. Inundation would occur for 37 kilometres along the Gordon River, almost to the Gordon-Serpentine River junction, a.nd 33 kilometres along the Franklin River Valley, to Mt Propsting. All associated

tributaries, including the Olga, Smith, Orange, Maxwell, Albert, Denison and Jane Rivers, would be flooded for some portion of

their length.

6.8 The Franklin power station, one kilometre downstream

from the dam, would have an installed generating capacity of 296 MW, divided equally among four turbo-alternator sets, and an

average energy output of 172 MW. A 220 kV transmission line of

about 104 kilometres in length would be required for connection to the Farrel Control Centre, north of Rosebery.

6.9 To gain access to the construction sites the HEC

proposed, in 1979, to construct a single road south from

the Lyell Highway for about 70 kilometres, 33 kilometres of

which would be new road. Fourteen kilometres of site access

roads, including a road to the proposed quarry site and a bridge

over the Gordon River at the power station, and temporary and

permanent construction camp facilities would have t o be built.

111

6.10 However, the HEC recently presented an alternative

proposal which would allow access to the darn site from both

northern and western parts of the State (Figure 6.2). Northern access would be from the Lyell Highway via the presently

abandoned Kelly Basin tramway to Eagle Creek and western access would be via barge transport up the Gordon River from Macquarie Ha r bour to a landing jetty at Eagle Creek. From this point of

convergence a road would be built alongside the Gordon River for about 12 kilometres to the darn and power station sites.

Considerable debate has arisen from this proposal as it would

require the revocation of a large section of the Gordon River

Sce nic Re serve.S

6.11 The HEC in its 1979 Report estimated that for the

Gordon-below-Franklin scheme the time required from

authorisation to commissioning would be ten years. At this time, it was stated by the HEC that the construction programme had

been scheduled to a minimum period in order to minimise

capitalised interest charges. In the 'Financial Analysis' made by the HEC in March 1982, and in the Cameron, Preece

International Report this period was given as nine and a half

years. No explanation of the reduction in construction time was provided. It has been suggested that the HEC's recent proposal

for an alternative access route would reduce the scheme's lead

time by about two years.6 As minimising construction time was an important factor in 1979 it is difficult to understand why the

access route was not considered more thoroughly by the HEC at

that time.

6.12 In 1979 the HEC estimated that the Gordon-below-

Franklin scheme would cost $237 million, excluding interest

during construction. The cost per kilowatt of Long Term Average Output (LTAO) was calculated to be $1,381, the cost per kilowatt hour 1.09 cents, and the annual revenue required $16.4 million, each including five per cent inter est on capital durin g

construction and zero inflation for operating charges.

112

6.13 1982

The 'Financial Analysis' provided by the HEC in March

updated the 1979

Gordon-below-Franklin scheme. construction and plant costs,

cost Owing

the

estimates for

to increases in

revised estimates

the

civil were:

capital cost $372.27 million excluding interest and $453 million including interest; cost per kilowatt of LTAEO $2068 excluding interest and $2516 including interest; cost per kilowatt hour

1. 64 cents; and the annual revenue requirement $25.8 million

(including interest). The inclusion of transmission line costs increased these values to : capital cost $387.065 million

($469.852 million with interest); cost per LTAEO $2264 ($2748 with interest); annual revenue requirement $26.885 million; and cost per kilowatt hour l. 79 cents (although on page 8 of the

'Financial Analysis' this figure is given as 1.81 cents).

6.14 The HEC currently employs about 700 people on the

Pieman project. According to the 1979 HEC Report, if no further hydro-electric schemes commenced, these jobs plus about 500

administrative positions would be lost by 1987. If the

Gordon-below-Franklin scheme continued as scheduled, but no other scheme commenced, the construction workforce would

increase to a peak of about 1200 people in 1985, and decline

from then onwards to about 30 in 1991.

Gordon-above-Olga scheme

6.15 In 1979 the HEC presented the Gordon-above-Olga scheme, the first part of the Separate De v elopment, as an alternative to the Gordon-below-Franklin scheme. In this propo sal (Figure 6.3) the dam and power station would be situated on the Gordon River

about two kilometres above its junction with the Olga River.

Inundation would occur along the Gordon River for about 25

kilometres, extending into the Denison, Maxwell and Orange River valleys. The Franklin River would remain untouched.

113

6.16 installed The Gordon-above-Olga power generating capacity of 212

station would have an

MW, divided among three

energy output of 119 MW.

envisaged by the HEC,

turbo-alternator sets, and an average Access although terrain.

from the the Serpentine Darn was

route would have been

Two alternative routes for

through extremely rugged the transmission line were

proposed, one along the road and the other by way of the

impoundment.

6.17 The HEC, in its 1979 Report, gave the cost of the

Gordon-above-Olga scheme as $183 million capital cost (excluding interest), $1542 per kilowatt of LTAEO and 1.22 cents per

kilowatt hour (including interest).

6.18 The 1979 Report concluded that, although the Gordon-

above-Olga scheme was environmentally less damaging, it was more expensive and produced less power than the Gordon-below-Franklin scheme. The HEC therefore recommended the Gordon-below-Franklin scheme.

6.19 In its submission to the Committee the HEC stated:

'The energy output of

Franklin scheme would

average.

the Gordon below

be about 180 MW

This is almost exactly the same as the

combined output of the alternative Gordon

above Olga scheme, together with the notional King (Newall) scheme. However, this latter

combination would cost 40%, or $180 million

more (at January 1982 prices) for the same

energy output.

The Gordon below Franklin scheme also holds significant advantages as far as tourism and recreation are concerned.

Thus it is clear that

between construction Franklin scheme and

power station. •7

the proper choice lies

of the Gordon below

a coal fired thermal

114

6. 20 After the completion of the Gordon-below-Franklin

scheme only one large hydro-electric scheme would remain to be developed in Tasmania the second part of the Integrated

Development.

6.21 In 1979 the HEC estimated that the second stage of the

Integrated Development, the Franklin scheme with King diversion, would have a capital cost of $221 million (excluding interest), which is equivalent to $1320 per kilowatt of LTAEO and which

would result in a cost per kilowatt hour of l. 00 cents and an

annual revenue requirement of $15 million (including interest). The HEC has not revised these costs publicly, but if the

increases calculated for the Gordon-below-Franklin scheme were applicable to the Franklin/King diversion scheme then the

capital cost in January 1982 dollars would be about $347 million (excluding interest and transmission costs).

6.22 The lead time for the Franklin/King diversion scheme

would be eleven and a half years. In the Integrated Scheme

development programme envisaged by the HEC, construction of the second phase was to commence at a time such that the

Gordon-below-Franklin work force would be transferred gradually to the Franklin and King diversion schemes, thus maintaining

high levels of HEC employment for a further six to eight years.

Other hydro-electric schemes

6.23 Forty-three per cent of the State's undeveloped

hydro-electric resources are in areas outside the Gordon,

Franklin and King River valleys. To develop this potential ten schemes were described by the HEC in 1979 (Figure 6.4). Seven of these schemes were in areas outside the South West Conservation Area. The average output of these schemes ranged from 55 MW to

10 MW and totalled 284.9 MW av., which .cepresents about 480 MW

of installed capacity. The indicative gross capital cost of the schemes varied from $1190 to $3390 per kilowatt average.

115

6.24 After describing each of these schemes the HEC

concluded:

6.25

6.26

'The Commission expects that the increasing value of renewable hydro-electric energy will ultimately lead to the progressive

development of these medium and small

incremental resources in the next century.

Whilst some are relatively small

individually, in aggregate they amount to a

substantial increase in energy resource to

the State of about 285 MW average output.

There is little doubt that future generations will realize the benefits to be gained from

their development in preference to fossil and other fuels.' 8

In the 1980-81 Annnual Review of the HEC it was stated:

'A decision

development on important and future planning

by Parliament on

the Gordon River is

pressing matter as

is concerned.

future a most

far as

In the absence of that decision, field

investigations continued on the Huon, King

and Anthony-Henty river catchments to further evaluate the feasibility of these schemes.

Preliminary reconnaissance Arthur River area to

schemes. •9

was done

identify in the

possible

More recent information confirms that the HEC ha s

carried out feasibility studies, at a cost of nearly $750 000,

for a possible scheme on the Henty and Anthony Rivers.lO

6.27 The time required to construct any of these small

hydro-electric schemes would vary depending on the size of th e scheme, its location and its accessibility. In general, the lead time for a small scheme would be substantially less than a large

scheme.

116

6.28 The number of

could be expected to be

people employed would also v ary, but

proportionally less than with a large

scheme. However, most of the HEC administrative positions would be retained.

Pumped storage

6.29 Excess electricity may be available in a generating

system in either of two ways. First, as some components of a

supply system are not easily turned on and off, such as

coal-fired thermal stations, it may be more economic to produce an excess of electric ity for short periods than to consume fuel

inefficiently in shutting down and restarting a power station. Secondly, generating systems which are unpredictable in their short-term output such as solar or wind powered systems, may

produce electricity at periods when it is not required. Pumped storage plant enables the use of excess electricity to return

water to an impoundme nt after its flow through hydro-electric

turbines. In thi s way electricity can be 'stored' for future

use. About 80 per cent of the electricity used to pump the water

can be retrievea.ll

6.30 Pumped storage is currently used in the Snowy Mountains

scheme and the Shoalhaven scheme in New South At th e

Wivenhoe hydro-electric station on the Brisbane River pumped s torage will be used to provide peak electricity for Queensland.

During an average 24 hour day the units will operate for five

hours as generators and for seven hours as pumps to r etu rn the

water from the lower t o the upper re servoir. Fo r the rerr.aininc;

time the units will be on standby for emergency use . The output

i s expect e d t o be 2,500 MW hours per day .l 3

6.31 The South West Tasmania Comrr,ittee (NSI'J) save ev icen c e

to the Committee that the Ta smanian grid was ideally suited t o

pumped storage as several of th e hy dr o- electric s ch eme s, th e

117

Derwent, the Mersey-Forth and the Pieman, operate through a

series of staircase lakes and as wind conditions had been shown to be highly suitable for the use of aerogenerators.l4

6.32 The HEC has not commented on the suitability of the

Tasmanian grid to the application of pumped storage.

118

Figure 6.1: Integrated Development of Lower Gordon Franklin and King Rivers

; ,,

Source: HEC 1979 Report, p.l2.

119

Cradle Mt. Lake St. Clair

National Park

""'"'---.__

Figure 6.2: HEC's Latest Proposals For a Single Access Road to the Site of the Gordon-below-Franklin Power Scheme

N

(

The map shows the HEC ' s latest proposals for a single access road to the site of t he Go rdon-below-Franklin p ower scheme . The old Crotty Road begi ns f rom the North Owen Peak near Linda on the Lyell Highway and goes to Mount Propsting . The proposed access road could be built south from the abandoned Kelly Basin t r amway at the Crotty Road

junc tion nea r Mt . Propsting , t o Eagle Creek where a l anding sta ge

is proposed , and extend south along t he west e r n side of the Elli ot

Range in the State Reserve to t he dam site near Butler Island .

Source: Th e Examiner, Thursday, 12 Au g ust 1982 .

120

Figure 6.3 : Separate Development of Lower Gordon.

I

Franklin and King Rivers

\.

; :!)

FRANKLIN DIVERSION)

D D EX ISTING

STORAGES

PROPOSED ST OR AGE S

GORDON OLGA SCHEME _

SEPARATE DEVELOPMENT OF

lOWER GORDON FRANKliN & KING RIVERS

So urce: HEC 1979, Re port, p. 2 8 .

121

--.....

'i \...,

')""? '-_,

' \

- ;,._ ....... 'fuiW Ptr. ,_ _ _s.}

' .J'

Figure 6.4: Undeveloped Hydro-Electric Resources excluding Gordon. Franklin and King Rivers

LAUNCESTON

HOBART

SCHEMES:

1. Huon River at Blackfish Creek. 6. Arthur River below Frankland River. 2. Jane River at Punt Hill. 7. Que River incl. Hatfield and Leven Diversions.

3. Davey River Diversion. 8. Wilson-Huskisson Rivers.

4. Upper Gordon River. 9. Anthony River incl. Henty Diversion.

5. Arthur River below Rapid River. 10. Upper Meander River.

Source: HEC 1979 Report, Appendix IV, p. 5.

122

Thermal Power

Introduction

6.33 Thermal power stations provide the major portion of

Australia's electricity requirements. On the mainland thermal stations range in capacity from 200 MW to 4000 MW and are

usually fuelled by coal, oil or gas. There are considerable

economies of scale associated with large thermal power stations and conversion efficiencies increase with increasing turbine size of up to 500 or 600 MW installed capacity. However, the

maximum unit size acceptable to the Tasmanian generating system is 200 MW av. so that advantage cannot be taken of these

benefits.l5

6.34 The HEC currently operates a 2 x 200 MW oil-fired

thermal station at Bell Bay. As fuel oil is now comparatively

expensive this power station has not been used to a large

extent, although its use has increased over the last few years.

In 1979 the HEC proposed that the Bell Bay Power Station be

converted from oil to coal-fired and, although a decision

against this conversion has recently been made for economic

reasons,l6 detailed preliminary studies were carried out by the HEC.

A 2 x 200 MW thermal power station

6.35 One of the options for supplying electricity to

Tasmania considered by the HEC in 1979 was a 2 x 200 MW

coal-fired thermal power station.

6.36 The HEC maintained that a thermal development programme could meet the forecast load to the year 2000, as the two units

could be installed at times to suit the load growth, although

towards the end of the century fourth and fifth machine s at the

Gordon station would need to be installe d t o provide power for

peak periods.

123

6.37 The lead time required for a thermal power station was

not explicitly stated by the HEC in its 1979 Report but some

idea of the time needed for construction can be gained from the

statements:

and

'The commissioning dates required to meet the load forecast are: No.1 200 MW coal-fired

unit - 1990, No.2 200 coal-fired unit -

1994 •17

'construction of the first 200 MW unit is not

required to start before 1985. •18

6.38 In evidence to the Committee, Professor J. Burton

stated that he believed a 200 MW thermal station could be built

in three years.l9 However, Mr A. Burdon of

National Development and Energy in evidence disagreed with this estimate and stated:

the Department of to the Committee

'From the time of go-ahead I would estimate

the construction time for a coal-fired

station on a greenfield site, which is a new

site, to be in the region of eight years. •20

6. 39 To this a further two years was added for planning,

design, calling of tenders and awarding of contracts, although it was pointed out that the total time could be reduced by up to

two years by streamlining tender procedures and by the purchase of a 'package unit•.2l

6.40 The location of the power station was considered by the

HEC to be primarily dependent on the source of coal if

mainland coal were to be used the most economical site would be

in the region of the Tamar estuary, but if Tasmanian coal were

used the power station would most economically be sited close to

124

the mine. Secondary considerations included wind patterns,

inversion effects, the disposal of ash and the dissipation of

waste heat.

6.41 For the purposes of cost evaluation and the assessment

of environmental impact, the HEC discussed a thermal station

fired by New South Wales coal and hypothetically sited at Bell

Bay, adjacent to the existing power station. The total capital

cost for a 2 x 200 MW station was estimated to be $289.92

million; of this total the No.1 unit cost $183.99 million and

the No.2 unit cost $98.93 million. The fixed annual charges,

including interest, depreciation and operation and maintenance costs, totalled $21.902 million, made up of $14.071 million for the No.1 unit and $7.831 million for the No.2 unit. This

estimate was equivalent to 1.04 cent s per kilowatt hour. Fuel

costs were based on a coal price of $33 per tonne for imported

New South Wales coal having a heat value of 27.91 l'i!J / kg. At an

overall power station efficiency of 31.5 per cent, and an

average output of 60 per cent this equivalent to 1.35 cents

per kilowatt hour, which gave a total energy cost of 2.39 cents

per kilowatt hour.22

6.42 In the March 1982 'Financial Analysis' the HEC revised

these figures to give the followin g : capital cost of No.1 unit

$245.4 million ($261.52 million with interest ) ; capital cost of No.2 unit $134.9 million ($142.78 millionwith interest); cost per kilowatt of LTAEO for No.1 unit $2045 ($2 179 with interest) ; cost per kilowatt of LTAEO for No.2 unit $1124 ($1190 with

interest); cost per unit of energy f o r No.1 unit 4.49 cents;

cost p er unit of energy for No.2 unit 3.65 cents; and combined 2

x 200 MW station cost per unit of energy 4.07 cents.23

6.43 The 'Financial Analysis' also discussed tbe employment

generated by a th ermal development programme:

125

'A change to a coal-fired thermal

construction programme would result in the field construction workforce dropping to

about 100 in about 10 years time with a fall

of about 600 within the next two years ••.

Additional loss of employment in Head Office, base workshops and testing centres etc. would amount to 290 in the next two years and 500

overall. •24

Coal supply and cost

6.44 When the thermal option was assessed by the HEC in 1979

it was generally believed that the proven reserves of Tasmanian coal were insufficient to fire a 2 x 200 MW station for the 30

years of its operating life. At this time the HEC calculated

that if Tasmanian coal were used a 2 x 200 MW power station

would consume about 1.1 million tonnes per annum .. Due to the

higher quality of New South Wales coal, it was estimated that

only 860,000 tonnes per annum would be required for the same

output.25

6.45 Since this time, three major mineral exploration

companies operating in Tasmania, Shell Australia Limited, Victor Petroleum and Resources Limited and Goliath Cement Holding

Limited, have indicated coal reserves of sufficient size to fuel a 200 MW power station.26 In fact, both Shell and Victor

Petroleum stated in evidence that the economic development of their coal deposits would actually require a substantial local consumer, such as a power station.27

6.46 The quality of Tasmanian coal, however, is not high.

Shell Australia Limited, in its submission to the Committee,

stated:

'All of the coal is low rank, high volatile

bituminous material suitable for use as a

fuel coal. Raw ash levels range from

approximately 20% upwards and corresponding indicated washed coal yields range from very high to sub-economic for a product of

marketable ash specification. •28

126

A number of estimates of the price of Tasmanian coal have been

made:

6.47

in 1979 the HEC estimated that Tasmanian coal would

cost $27.60 per tonne delivered to Bell Bay, excluding mine development costs which were estimated to be $65.1 million; 29

in the 1982 'Financial Analysis', it was stated that

'the Commission still has no information that would

lead it to conclude that an adequate supply of

Tasmanian coal is assured' but that 'cost movements

since June 1978 indicate that the cost of Tasmanian

coal will have increased by 51% in the period to

January 1982' (which was therefore $41.68 per tonne); mainland coal was estimated to be $59.00 per tonne

delivered to Bell Bay;30

Mr Lohrey, in evidence to the Committee, stated that in

1978 the Cornwall Coal Company was selling washed coal at about $15 per tonne and in 1981 it was about $35 per

tonne;31 and

Cameron, Preece International estimated in March 1982 that coal from the Mt Nicholas mine would be $42 per

tonne delivered.32

It is generally accepted that mainland coal exists in

more than sufficient quantities for export to Tasmania and that it is of a much higher grade than Tasmanian coal. However,

transport costs increase the price of mainland coal and this may outweigh the benefits gained by its higher calorific value. Cost estimates for mainland coal have also varied considerably:

127

in the 1979 Report the HEC used $33 per tonne for New

South Wales coal landed at Bell Bay33 and updated this

to $59 per tonne in the March 1982 'Financial

Analysis';34

Shell Australia Limited stated in evidence that New

South Wales coal varied considerably in price as some mines produce coking coal and some produce steaming

coal, the latter being within the range of $47 per

tonne and coking coals being about 20 per cent higher

than this;35 and

Cameron, Preece International in their review of the

1982 HEC 'Financial Analysis' stated that the price per tonne FOB for mainland coal varied between $68 and

$4s.36

Other fuels

6.48 In 1979 the HEC considered a number of other fuels for

use in a thermal power station: oil, gas, wood and wood wastes.

On the basis of the high cost and the fact that Tasmania has no

indigenous reserves of crude oil or gas, these two fuels were

rejected. However, the HEC stated:

6.49

'wood, wood chips

possible fuels

station. •37

and for wood a

waste thermal are all

power

The HEC estimated that a million tonnes of green waste

or chip would be required annually to produce an average

electrical output of 80 MW. It also estimated that about 2.2

million tonnes of eucalypt forest waste were available per year so that a total annual average output of 180 MW could be

generated.38

128

6.50 As forest waste resources are dispersed throughout the

State, the HEC proposed that six small wood-fired thermal

stations ranging from 30 to 120 MW would be required. It

estimated that the unit cost of electricity from these stations would range from 4.2 to 5.4 cents per kilowatt hour depending on the type of wood waste used. These figures were based on

estimates of $15 per tonne for bush wastes, $24 per tonne for

wood chips and $9 per tonne for process wastes. Transport for

bush wastes was estimated to be an additional $8 per tonne,

based on an average transport distance of 100 kilometres.39

6.51 The total capital cost for four power stations, having

a combined installed capacity of 270 MW (162 MW av.) was

estimated to be $307 million and the total annual charges was

estimated to be $70.78 million.40 No estimates of flow-on

benefits from intra-state spending were made by the HEC for this option.

6.52 The South West Tasmania Committee (NSW), in

submission to the Committee, agreed with the HEC estimates the amount of wood wastes potentially available but did

agree with the HEC cost estimates for a number of reasons:

'For instance, the estimate of $9 per tonne

of wood waste is suspect, as many companies

currently pay to have such waste removed. If

only more easily obtained wastes were

collected, costs would be reduced

significantly and if the collection of wastes were carried out on a large scale, some extra

economies might be possible. It would be

desirable to investigate the Mt Gambier

wood-powered electricity station for a more reliable assessment of costs associated with this scheme. There is no reason (and certainly no reason

has been put forward) for using separate

forest and process waste electricity stations although it might be more economical to have

separate stations in the north and south of

the state. Instead of the four stations

129

its

of

not

proposed by the HEC, there would then only be two, with resultant economies of construction and operation.

Other objections raised by the HEC are

irrelevant. There is no need, for instance,

to use salt water for the debarking of wood

and hence there is no need to construct

treatment plants to remove the salt.

We believe that the possibilities of using

timber crops specifically designed for input to a thermal station ought to be considered.

There is no reason why the type of timber

currently most suited for chipping would also be the most suitable for generation purposes. It is quite possible that faster growing and

poorer "quality" timber crops could be grown for this purpose. 1 41

6.53 Mr Robert Graham, former Minister for. the Environment

and for Local Government, in evidence to the Committee, pointed out that there were about 3.2 million tonnes of wood waste

available in Tasmania that were usually burnt in the bush.

Graham stated:

6.54

1

I am not sure that wood-fired thermal power

stations are an economical option in terms of a large single station, but it is possible to

build wood-fired thermal power stations that would be cost competitive. They would not be

as cheap as hydro-electricity but they would certainly be competitive with coal. You could have, say, 40 megawatt to 50 megawatt power

stations. That would give an enormous boost

to the forest industries ••. 1 42

There are a number of benefits associated with several small wood-fired thermal power stations: first, the location of power stations in appropriate regional centres would provide direct and flow-on benefits to those regions through both the

construction and operation phases of the development; secondly, the ash content of wood is about one-fourtieth of the ash

content of coal so that only minor disposal facilities are

required;43 and thirdly, the forest industry in Tasmania would benefit directly from the increased use of its resources.

130

Magneto hydro dynamics (MHO)

6.55 At present thermal power stations fired by coal, oil or

gas are restricted to an upper limit for fuel conversion

efficiency of about 35 per cent. Magneto hydro dynamics (MHO) 44 is a relatively new technology which is capable of increasing

this limit to 45 per cent initially and, with second generation

plant, to 55 per cent. This means that considerable savings can

be made in fuel consumption or, conversely, that much more

electricity can be produced from the same amount of fuel.

6.56 In his submission to the Committee, Professor H.K.

Messerle, Head of the School of Electrical Engineering,

University of Sydney, explained:

'Electrical energy can be extracted from a

hot gas blast by applying a magnetic field.

One simply forces a jet stream through a pipe

or channel and applies a magnetic field

across it. Then one fits electrodes at right

angles to the field into the pipe walls. If

the gas jet is hot enough it becomes an

electrical conductor and the magnetic field causes a current to flow into the electrodes.

The method thus converts the gas flow energy

in the pipe directly into electricity not

requiring any moving machinery. The method is therefore simple and offers a highly

efficient conversion of the original energy r45

6.57 MHO is not currently commercially

experimental stations are operating in Russia

However, Messerle predicted that by the end

available but

and America. of the 1990s

probably every coal-fired power station will have an MHO

component in it.

131

6.58 Messerle pointed out that improved conversion

efficiencies through the use of MHO would result in a number of

benefits other than savings of fuel: less cooling water would be required, atmospheric pollution would be less, and the resultant high temperature heat could be used in other processes.

6.59 The development of MHO power generation would, in

Messerle's opinion, confer a number of important benefits on the Australian economy and, in view of these benefits, Messerle

requested 'that the Committee recommend to the Government that new initiatives be taken towards the immediate full scale

development of MHO power stations in Australia•.46

Interconnection with Victoria

Introduction

6.60 Interconnection with Victoria is the connection of the

Tasmanian and Victorian electricity systems by a cable to enable electricity to be transferred from either system to the other on a dedicated or opportunity basis.

6.61 The New South Wales and Victorian electricity systems

are already connected through their joint use of the Snowy

Mountains hydro-electric scheme. Apart from sharing the

electricity generated by enabled both New South

that scheme, Wales and

this interconnection has Victoria to transfer

electricity to the other State in recent years.

6.62 There are also many examples of interconnection

overseas, sometimes transcending national boundaries. Some of these interconnections use submarine cables, such as the cable under the Skagerrak, the one across the English Channel and the

one between the North and South Islands of New Zealand.

132

6.63 The main reasons for interconnecting systems have been

to make use of seasonal or daily load diversity, a central

generating facility or the surplus capacity in another s ystem.

6.64 In its 1979 Report, the HEC mentioned that it had

examined interconnection with Victoria a number of times during the preceding 15 years as part of its continuing review of

potential electricity supply options.47 In each case, the HEC had rejected the use of interconnection in favour of another

hydro-electric scheme on economic grounds.

6.65 The Committee of Inquiry into Electricity Generation

and the Sharing of Power Resources in South-East Australia was appointed on 7

interconnection April of the

1980 New

to inquire into the possible

South Wales, Victor ian, South

Australian and Tasmanian electricity systems. The Committee consisted of the Ch a irman, Sir David Zeidler, and

representatives of the Commonwealth and the four States invol ved in the inquiry. These representatives were senior officers of

the respective electricity authorities of those States and of the Snowy Mountains Hydro-Electric Authority (representing the Commonwealth).

6.66 The Zeidler Committee, as that Committee has become

known, submitted its report to the Government in October 1981.

It recommended, among other things, that :

no action be taken at present to

establish a limited interconnection with

Tasmania from the mainland but it recommends that Tasmania be invited to participate in

the review of transmission devel opm ents

contemplated in Recommendation 2 ab ove with the object of keeping under consideration

those developments which may l ead to

ext e nsion of the interconnecti on to Tasmania at some future time. •48

133

6.67 The evaluation of interconnection made by the HEC and

the Zeidler Committee will be discussed in this chapter and in

Chapter Seven.

HEC proposal

6.68 The HEC assumed a route from Apollo Bay in Victoria to

Stanley in North West Tasmania via King Island, a distance of

258 kilometres. It also assumed the use of a fully insulated 300

MW two-cable connection at a plus or minus voltage of 300 kV.

The second cable would be necessary because a breakdown could

make the cable inoperable for several months while repairs wer e

being mad e unless a special cable barge were available. The

transfer of electricity would be by direct current with

transformers at each end for conversion from or to alternating

current for overhead transmission.

6.69 The HEC put forward two modes of operation for

interconnection with Victoria. These were:

6.70

I ( i) Supply of 300 MW of energy from

Victoria at a 95 % capacity factor.

After allowing for losse s this is

equivalent to an increment of 268 MW to

the system energy ,

( ii) Supply of 300 MW of energy from

Victoria at off peak time at a capacity

factor of 50 %. This provides an

increment of 141 MW to the system

energy. •49

Both of these modes of operation appear to be notional

and not related to the projections of demand made by the HEC.

6.71 In case (i), the HE C assumed a dedicated base load

transfer of power to Tasmania of 268 MW av. after allowing for

losses . It then added an extra increment for peak load

provision. If interconnection were to be an alternative t o the

134

Gordon-below-Franklin Scheme in 1990, then only 168 MW av.,

would be required according to the HEC' s own demand projection. If, however, it were to be a successor to the Gordon-below­

Franklin scheme designed to come into operation in 1995, only

172 MW av., plus an incremat for peak power, would be required

at that time, again based on HEC demand figures.

6.72 Similarly, in case (ii), the HEC does not equate supply

with its own demand projections. If the increment of power

provided by the cable were only 141 MW av., it would not only

fall below the HEC's own demand forecast requirement, but

additional peak capacity might have to be installed.

6. 73 The HEC stated that with increases in average demand

there is a corresponding increase in peak demand which, in the

case of a new hydro-electric scheme, '.i.s usually about 1. 7 times the annual average output of the scheme' .so The operational

characteristics of a hydro-electric scheme, with the ability to respond immediately to fluctuations in demand, are ideal for

meeting peak loads. Thermal power, which would be the source of electricity transferred from Victoria by cable, is suited to

base load supply and it is not equipped to handle sudden changes in peak load. The factor of 1.7 times therefore seems high for a

non-hydro-electric station. It should be noted that the HEC

referred specifically to a hydro-electric scheme and not to all forms of power generation. In addition, of the 22 hydro-electric stations in operation in 1980-81, six had peak loads exceeding 1.5 times average loads and only two reached 1.7 times the

average load, neither of which was a new station.

6.74 The HEC went on to say:

'For case (i), provided that the

interruptions to the supply, which cause the capacity factor to reduce to 95%, are

randomly distributed and do not coincide with the time of peak demand, a contribution of

300 MW at the time of peak demand on the

135

system can be assumed. Even with this

assumption a further 304 HW of peak capacity

is required. •51

6.75 Similarly, for case (ii), the HEC allowed an extra 264

MW for peak capacity.

6.76 Irrespective of the applicability of the factor of 1.7

times to thermal power, there is no obvious relationship between the two additional requirements for peak power stated by the HEC with the respective base loads. For example, it is not explained how the peak load of 304 MW is related to either 300 MW

installed capacity or 268 MW firm capacity in case (i).

6.77 The provision of peak capacity is an important element

in considering modes of operation. The HEC stated that it had

'negligible surplus peak capacity'. It also reported that the

total system nominal peak capacity was 1750 MW, but after

allowance of 343 MW for necessary routine maintenance and spare plant, it had an effective peak capacity of 1407 MW. Actual peak loads for the system in 1979-80 and 1980-81 were 1151 MW and

1225.4 MW respectively. This left 256 MW and 181.6 MW

respectively surplus capacity.

6. 78 The nominal peak load of a station is generally less

than what can be generated at peak capacity. Allowance is made

in calculating the nominal peak load for varying conditions

including the effects of prolonged drought. In 1980-81 the

aggregate of individual hydro-electric station peak loads was 145 MW more than their aggregated nominal peak loads. Gordon

Stage One generated a peak load of 69 MW in 1980-81 and 72 MW in

1979-80 above its nominal peak capacity of 230 MW. Although the norminal peak capacity of the system is less than the sum of th e

peak capacities of the stations, there is probably extra peak

capacity in the system above the nominal peak capacity. In

addition, the greater the proportion of thermal power in the

system, the better the total system can withstand a prolonge d

drought.

136

6.79 The HEC estimated the capital cost of a 300 link

consisting of two fully insulated 1000 ampere cables, converter stations and appropriate system connections at $150 million in 1979. It also stated that:

'For the purpose of comparing the cost of

power from Victoria with the cost of the

alternative sources of energy, an approximate value of 2.7 cents/kW.h can be used' .52

This energy cost included provision for the installa tion of

additional peak generation plants in Ta sma nia of 304 MW for its

case (i) a nd 268 MW for its case (ii).

Zeidler Committee proposal

6.80 The Zeidler Committee was primarily concerned with

examining the possibility of establishing an integrated

electricity grid among the four States of South East Australia. Its perspective was therefore different from that of the HEC in

its 1979 Report and of this Committee, both of which have been

concerned difference only must

with Tasmania' s be kept in mind

Zeidler Committee's Report.

futur e power system. This

during an examination of the

6.81 It was within this integrated system framework that the

Zeidler Committee considered tbe establishment of a high

capacity 600 MW interconnecti on between Victoria and Tasmania. To assess its economic viability , the Zeidler Committee compared

this interconnecti on with a similar capacity Tasmanian

hydro-electric dev elopment and thermal gene ration u sing black coal imported from New South Wales.

137

6.82 The cable route chosen by the Zeidler Committee would

cover a distance of 220 kilometres with probable jointing on

King Island. The interconnection would consist of a 600 MW plus or minus 300 kV direct current bi-polar cable with one spare

cable.

6.83 The

consequential South Wales, rate or $510

capital cost transmission of this interconnection, reinforcement in Victoria

including and New

would be $550 million at a ten per cent discount

capitalised million at a five per cent discount rate. The net

cost of energy delivered over the life of the

scheme, which was assumed to be 25 years, would be $930 million

at a ten per cent discount rate or $960 million at a five per

cent discount rate.

6.84 The Zeidler Committee indicated that there could be

benefits to the integrated network of systems if the Tasmanian system could operate Mountains scheme; that in a

is,

s imilar

to act

way

as a

to that of

substantial that the

the snowy peak load

Tasmanian supplier. It system, with was its

acknowledged, however, high load factor, would be unsuited to that

type of operation without substantial peak load capacity being added to the system. It concluded that:

6.85

modification of existing or proposed

developments to provide a similar role to

that of the Snowy Scheme would be neither

simple or inexpensive. This cost would be

additional to the costs of interconnection

and reinforcement of internal transmission systems. '53

A lower capacity interconnection for exchange of energy

on an opportunity basis was also examined in a preliminary way

by the Zeidler Committee. This invol v ed interconnection by a

single 300 MW plus or minus 300 kV direct current bi-polar cable routed via King Island. The basis of this mode of

interconnection was the transfer of off-peak electricity to

138

Tasmania for 'storage' and return to Victoria at peak times.

This would not obviate the need to install further generating

plant in Tasmania and these arrangements, which underwent

preliminary economic analysis based on data supplied by the

relevant State electricity authorities, were unlikely to be

economically viable. The Zeidler Committee assumed, however, that the oil-fired Bell Bay thermal station would be converted to coal. With the Bell Bay station now likely to remain

oil-fired, the capital investment saved in not proceeding with the conversion might, if invested in interconnection, assist the comparative economic position of a lower capacity link.

Intensive studies would, however, need to be done to verify that proposition.

6.86 As the

interconnection, preliminary economic analyses more detailed examination of

operational arrangements were not pursued Committee.

McLachlan Group proposal

did not favour

other potential by the Zeidler

6.87 McLachlan Group assumed a base load transfer of 300 MW

to Tasmania in its report to the Committee. As demand, at least

initially, would not reach that level of additional supply,

there would be capacity to transfer peak power to Victoria on an opportunity basis.

6. 88 With exponential increases in demand eventually taking

up the 'surplus' imported base load pow e r, additional peak load capacity would need to be installed in Tasmania. McLachlan Group suggested that this could be met from the in s tallation of fourth and fifth generators in the Gordon Stage One scheme. The HEC

stated in its 1979 Report that it had made provision for these

generators to be installed by the year 2000 if thermal stations

were built in Tasmania.

139

6.89 The HEC made no mention of the effects on the Gordon

River of the surge likely to be produced by the five generators

at the Gordon Stage One scheme operating at peak capacity. The

Zeidler Committee suggested that a holding dam might have to be built downstream to regulate the flow of water to prevent sudden surges adversely affecting the river downstream.

Victorian power supply

6.90 Unlike

interconnection other electricity supply options for Ta smania, with Victoria would be depe ndent on a

satisfactory agreement being reached between the Tasmanian and Victorian Governments on the transfer of power between the two States. There would also be the possi bilily of e ither New Sou th

Wales or South Australia, or both of them, participating in the

use of Bass Strait interconnection at some stage, depending on the capacity of the interconnection and its mode of operation.

6.91 Each State electricity authority has, in the pa s t,

operated its systems independently of the r est, with the

exception of the sharing arrangements among the Commonwealth, Victorian and New South Wales Governments for power from the

Snowy Mountains hydro-electric scheme and the agreement reached between the Commonwealth and New South Wa l es Go ve rnments for power from New South Wales stations for the Austral ian Capital Territory. Howev er , the interconnection establi shed between Victoria and New South Wal e s to share the Snowy Mountains powe r

has made possible general transfers of power between the tw o

States . Operational experience has been ga ined gradually in t he transfer of electricity to meet shortfalls in supply in one

State or the other or to achieve econ om i es in the generation of

power through l oad diversity . This experience has demonstrated the be nefits of inte rconnecti on and has given th e respecti ve

electricity authorities greater confidence in its operation .

140

6. 92 Further interconnection, with either Tasmania or South

Australia, would still be made b y Victoria on economic grounds provided that sufficient power were available for transfer to

another State. In both the 1979 HEC Report and in the Report of

the ZeicUer Committee, it was stated that the State Electricity Commission of Victoria would not have enough generating capacity in the early 1990s for surplus electricity to be transferred to

Tasmania on a dedicated basis. The HEC indicated, however, that by 1995, the Victor ian system might have installed sufficient

capacity to export power.

6.93 Since both reports have been published, Alcoa has

announced the deferral of its new aluminium s me lter at Portland and the State Electricity Commission of Victoria has deferred the commencement of construction of the Driffield coal-fired thermal station in the Latrobe Valley.

6.94 The current economic r ecession has caused the defe rr a l

or abandonment of many resource-based projects. As mentioned earlier in the report, Australia's economic future is uncertain, and this will affect industrial use of electricity throughout

Australia, Th e outlook for Victoria's electricity supply in t he 1990s may therefore have changed.

6.95 The installed capacity of the Victorian system in June

1981 was 5860 MW with an additional e ntitl em ent of 1085 MW from

the Snowy Mountains Scheme. Each of th e eight units under

construction at Loy Yang A and B and the planned Driffi e ld power

station will be 500 MW.

6.96 with

It is envisaged, th er e fo r e , that

Victoria were to proceed instead of

if interconnection the Gordon-below-

Franklin scheme, e ither existing surplus electricity in t he

Victorian system or a relatively small part of a new generating

station would be used to supply electricity to Tasmania on a

dedicated basis. Th e agreement wo uld have to include a

141

satisfactory price for the block of electricity. Although

McLachlan Group used 3.5 cents a unit at present day values in

its economic appraisal of the

indicated that 2.5 cents a unit,

between the Victorian Government

interconnection option, it similar to that agreed to

and Alcoa for the Portland

aluminium smelter, might be achieved.

6.97 Interconnection with Victoria would enable electricity to be transferred to either State. Although Tasmania would not be in a position to supply base load electricity for Victoria,

it might be able to supply peak load power. The HEC indicated in

its 1979 Report that Victoria might not need additional peak

load capacity until after 1995, and that additional generating capacity would need to be installed

supply it. There would be, however,

in Tasmania in

some potential order for to

the

transfer of peak load power to

This would help to offset

Victoria on an opportunity basis. the costs of installing the

interconnection and dedicated base load transfer from Victoria.

Nuclear Power

6.98 Only one submission to the Committee considered in

detail the possibility of a nuclear power station for Tasmania's short term needs. Senator Peter Rae, in his submission and in

evidence to the Committee, advocated a nuclear power station and proposed that the most suitable location for it would be on

Clarke Island in Bass Strait, as the island is remote, but not

inaccessible, appropropriate geologically stable for the discharge of

and

cooling environmentally water.54 At this

location power could be transferred to both Victoria and

Tasmania by way of an undersea cable. Senator Rae qualified this recommendation with the statement:

'I wish to emphasise that I am not suggesting

nuclear energy as a conclusion but it is one

answer, safe and far more environmentally

preferable to either thermal power, or to the

142

despoilation of the South West wilderness and it is a matter in which there could be argued

to be a legitimate Commonwealth interest in

participation.•55

6.99 However, a number of factors prevent the consideration

of a nuclear power station as a viable option to fulfil demand

in the early 1990s: first, the optimal unit size for the

Tasmanian generating system is 200 MW but economies of scale

prevent nuclear power stations from being economic at outputs less than 600 M'l-7 (although the sharing of a power station with

Victoria may overcome this problem); secondly, the lead time for a nuclear reactor would be about 14 years; and thirdly, despite

having vast reserves of uranium, Australia does not have a

commercial fuel enrichment plant so that the supply of fuel

would be dependent on overseas markets. 56 In addition to this

there is substantial public opposition to the adoption of

nuclear power in Australia.

6.100 However, as stated by the HEC:

'In the longer term, if Australia does

develop a significant nuclear. energy

industry, some of these difficulties will be overcome; and if the Tasmanian generating

system continues to expand as projected, it

will reach a size sui table for inclusion of

nuclear plants. •57

Solar Powei

6.101 Solar energy can be used in two ways to produce

electricity: indirectly, through the heating of water for use in a thermal power station and, directly, through photo-electric materials. The former method has limited application, as it is

restricted to areas of high insolation and often the water

temperature must reach boiling

be boosted by a supplementary heat

point. The latter method has

source to

widespread

application and is particularly useful in remote areas where a high degree of reliability is required.

143

6.102 In 1979 the HEC rejected photo-electric systems solely on the basis of cost.58 However, technological developments

since this time have reduced costs to the extent that it is

likely that within the next 15 years this type of electrical

generation process will be economic.59

6. 1 03 The s ubmission to the Committee by Mr A. Blakers, a

doctoral student in the Solar Photovoltaic Laboratory at the

Sc hool of Electrical Engineering, University of New South Wales,

discussed solar photovoltaic electricity generation in detail. As described by Blakers:

6.104

' when a certain class of materials, called

semiconductors, is exposed to light a voltage may, under certain conditions, be generated within. A semiconducting material can be

processed to allow extraction of electricity when illuminated. the most common

semiconductor used in the solar voltaic

industry is crystalline silicon. Reasons for this include its good photo voltaic

properties, its abundance and the fact that

the semiconductor industry is based on

silicon. •60

Photovol taic cells are typically thin discs or

rectangles of crystalline silicon, about 10 centimetres across. They are connected in series and sealed in a module to minimise

corrosion of metallic contacts. A number of modules are mounted together to form a panel and a number of panels are grouped to

form an array if the installation is large. 61 The array field

required to generate the equivalent of the Gordon-below-Franklin would be a maximum area of about 20 square kilometres, although in practice a number of smaller areas would be used and groups

of arrays installed as dictated by demand.62

6.105 number

Electricity generation by photovoltaic cells has a

of advantages over other electricity generation

processes:

144

6.106

'energy from the sun is available on a

massive scale, is inexhaustible, is free of

artificial interruption of supply, is highly predictable in the long term, and its

collection entails virtually no environmental impact. Photovoltaic (P. V.) solar energy has all of these attractions and is possibly the

most reliable of all energy generation

systems in use today by virtue of the fact

that it has no moving parts. Solar

voltaic electricity is perhaps the simplest and most aesthetic of all renewable energy

sources. •63

A number of important features of photovol taic

electricity generation stem from the modular form of the system. As described by Blakers, these advantages include:

'(1) Energy demand has to be forecast only a

year or so in advance of each modular

installation, in contrast to non-modular systems, where the demand has to be

forecast up to 15 or more years in

advance. The penal ties involved with

incorrect demand forecasting are

removed.

(2) Because modular systems may be installed to exactly match demand, there is no

idle capacity in contrast to non-modular systems, which typically take 5 years

from first energy production to full

capacity. They are ideal to cover low

demand growth rates.

(3) Requirements for capital are very steady for modular systems, unlike non-modular systems, which may have large

fluctuations in requirements for

capital.

(4) Long term construction of modular energy systems leads to very stable manpower

requirements, both for total numbers of employed people and for numbers of each

type of workers (e.g. electricians,

engine drivers etc.).

145

( 5) Modular

rapidly leading charges.

systems than to major

can be installed more

non-modular systems, reductions in interest

(6) Excluding factors related to the

weather, modular systems are extremely reliable. Because there are hundreds or thousands of independent units in a

modular system, the breakdown of any one unit has little effect on electrical

output. The number of units that will be

temporarily out of service can be

predicted with a high degree of

accuracy, and this can be taken into

account when designing the peak capacity of the system. This contrasts with

non-modular system, where the breakdown of a major generation unit can lead to

electricity shortages. •64

6.107 The price of photovol taic cells has fallen steadily

over the last six years, although recently there has been a

slowdown in the rate of decrease, attributed by Blakers to 'a

hiatus between old solar cell technologies and the introduction of new lower cost technologies'. 65 It was further stated by

Blakers that breakthroughs, there is a distinct possibility

particularly in the area of

of technical

thin film

technologies where a large increase in solar cell efficiency

could lead to rapid reductions in photovoltaic module prices. Blakers estimated, by obtaining information from 14 of the

largest companies manufacturing photovoltaic optimistically photovol taic modules would be

possibility by the mid 1990s.66

Wind power

cells, that

an economic

6.108 In its 1979 Report the HEC reviewed the current status

of wind power technology, the problems associated with using

wind as an energy source, the wind energy resources of Tasmania, the cost of generating electricity with wind generators and the compatibility of wind generators with the existing

146

hydro-electric system. However, rapid technical advances in wind generator performance have occurred since 1979 so that much of the information presented by the HEC is now outdated.67

6.109 The Australasian Wind Energy Association (AusWEA)

presented a comprehensive submission to the Committee on the

potential for large-scale wind power in Tasmania. In summary

AusWEA stated:

'Recent measurements by CSIRO of wind speeds in coastal northwest Tasmania indicate that the region has a high wind energy potential.

There have been rap1d advances overseas in

the past four years in the hardware of wind

energy conversion. Large (megawatt rated)

wind driven generators (or "aerogenerators") are operating in the USA and Denmark, are

under construction in Sweden, West Germany

and the USA, and are being planned in

England, Scotland, Canada and the Soviet

Union.

In Australia, a CSIRO-ANU group has made

advances in under standing the operation and planning of electricity grids containing

large-scale wind power and, in particular,

has shown that the economic value of wind

power in a grid is substantially larger than

previously believed.

The construction of wind farms, i.e. clusters of large aerogenerators, has already started overseas, and it is expected that there will

be several hundred megawatts of installed

wind capacity in the world by 1985-88. As the

scale of mass production increases, the co s t

of wind power will drop, and it is possible

that by 1990-92 large-scale wind power could be economically competitive with some stages of the proposed southwest Tasmania

hydro-electric projects.

Because of the short construction time for

aerogenerators, it is possible that

sufficient wind power capacity could be

installed in northwest Tasmania to produce

the same annual average power as the proposed hydro-electric projects in sout hwest

147

6.110

Tasmania, on the same time schedule, even if

wind power plant were not ordered for another 4-5 years.

However, both the environmental impact and

economic risk (associated with future

electricity demand falling below projected levels) of large-scale wind power in

northwest Tasmania would be much less than

those of hydro-electric power in southwest

Tasmania. Wind plus hydro-electric power

power is an excellent combination from the

viewpoint of operating an electricity grid, because of the fast response of hydro plant

to variations in wind power. The combination would also give a greater reliability of

energy supply from year to year than a grid

which is totally dependent upon rainfall'.68

Dr H.R. Outhred of the University of N.S.W. School of

Electrical Engineering and Computer Science recommended in his submission to the Committee that, as Tasmania possesses

significant wind energy resources, privately owned

network-connected wind generators should be encouraged where costs of generation are less than the marginal cost of supply

and where there is adequate local load. AusWEA and Outhred both noted that precedent for wind generator development exists in Denmark where over 500 privately owned wind generators are

already connected.69

6.111 Dr Outhred further pointed out that:

'The domestic market created in Denmark by

government initiative has encouraged the

development of a thriving local industry with a number of companies competing to provide

cost effective small wind generators (500 kW or less) at under A$100 per installed rated

kilowatt. Export markets have already been

created and larger wind generators (up to 250 kW) are becoming available from Danish

manufacturers. •70

148

6.112 Outhred also recommended that a small scale wind

conversion industry be established in Tasmania, assistance, as no such industry exists in

with government the Southern

Hemisphere and competition from Northern Hemisphere industries would be small due to freight costs,71

149

CHAPTER SEVEN

OPTION COMPARISONS

Introduction

7 .l In Chapter Four the Committee adopted a forecast of

demand which provided for both high and low growth of

electricity consumption in Tasmania. If a high growth of demand eventuates, a new major generating facility would need to become operational in the 1990s.

7.2 In Chapter Five the technological feasilibility of a

number of electricity supply options was examined and it was

concluded that only three major options existed for major

development in the next decade; hydro-electric power schemes, thermal power stations and interconnection with mainland

Australia. It was also concluded that a number of minor options

existed which could be added to the system incrementally to

satisfy the growth in demand. The major and minor options were

described in Chapter Six.

7. 3 The purpose of this chapter is to provide a brief

review of the evidence presented to the Committee on the

financial feasibility and economic implications of each major supply option.

151

Cost Comparisons

Cost comparison methodology

7.4 Several methods

development alternatives. exist The

for the economic appraisal of

consultants to the Committee,

McLachlan Group, recommended that the comparative management technique of discounted cash flow is the most appropriate method to use. This technique includes estimates of the original

capital required, interest payable on the capital used,

operating cost, maintenance cost and capital i tern replacement. Inflation is not included in the cash flow to be discounted.

Discounting at a given rate

present value of each option,

which if invested today at the

results in an estimate of the

that is, the 'amount of money

discount rate for the period of

time of the life of the project would be required to provide

funds for the cash flow being discounted' .1 At a given discount

rate the present value which is smallest represents the least

cost scheme. The unit cost of energy is obtained by dividing the

annual revenue requirement by the annual average amount of

energy generated.

Discount and interest rates

7.5 interest In using the

and discount discounted rates can

values and the resultant present

cash flow technique both

be applied value

Considerable Comrni t tee as

divergence of opinion has will been for

over a range of

vary accordingly. presented to the

to the appropriate values both interest and

discount rates.

7.6 Since 1945 real interest rates paid by the HEC have

generally been less than three per cent2, although recently this rate has been higher. 3 In its 1979 Report the HEC assumed a real

interest rate of five per cent. 4 The Tasmanian

152

Department of Industrial Development stated in its submission to the Committee that a conservative estimate for interest would be four per cent.5

7. 7 The consultants to the Committee, McLachlan Group, in

its economic appraisal of the three options, hydro-electric

schemes, thermal power stations and interconnection with the mainland, used for comparative purposes real interest rates of five per cent and zero. The effect of different interest rates

can be seen in the results of McLachlan Group's analyses.6

7.8 The Hydro-Electric Commission Act 1944 requires the

to estimate capital costs, annual revenue requirements and energy costs for its projects but does not require

presentation of a discounted cash flow. This means

method used by the HEC takes virtually no account

changing values of money with time. The HEC stated

submission to the Committee:

'In general the Commission has examined the

cost of the various alternative courses of

action to derive the cost to its customers.

In accordance with good practice and expert

advice the calculations have been done in

fixed value currency ignoring all future

inflation and adopting a 5% rate of

interest. •7

that of

in

HEC

unit the the the its

7.9 A number of submissions argued that the five per cent

discount rate sometimes used in the public sector was too low

and that a rate of 10 per cent, as normally used in the private

sector, was more realistic.

7.10 Mr A. Blakers, a doctoral student at the Uni versity of

New South Wales, in his submission to the Committee and in

evidence discussed in detail

discount rate values:

153

the implication s of various

7.11

7.12

'A private company would not charge itself a real rate of return of 5 per cent because it

would go bankrupt. First of all it has to

borrow the money to build the power station -and the going rate now is, probably 5 per

cent in real terms, that is with inflation

subtracted out. Then it has to make a profit

and pay dividends to its shareholders and pay taxes and also it must cover itself for

economic risk. All of these factors mean that it must aim for a higher rate of return than

5 per cent, probably nearer 10 per cent or

even more •••• So the difference between what a private company would consider the value of

that electricity to be and what the

Government is selling that electricity for, could be considered to be a hidden subsidy,

and a very, very large hidden subsidy. •9

Blakers further stated:

'A high discount rate favours low capital

cost, high running cost options such as coal. A low discount rate favours hydro-electricity which is a high capital cost, low running

cost option. •10

In contrast to this Dr A.J. Kellow, in his submission

to the Committee, stated:

'The selection of the rate at which future

costs are discounted depends upon society's time preference: a lower rate of discount

reflects greater concern about the future.

The Australian Treasury favours a rate of 10

per cent for public projects, and this rate

is also used in evaluating electric power

proposals elsewhere in Australia and New

zealand. While a discount rate of this

magnitude is common in private investment

evaluations, there is a strong argument to be made that society should be more concerned

with the future of present and unborn

generations than are private individuals, and that a lower discount rate is therefore

appropriate. As a general rule, however,

results which are sensitive to small changes

154

7.13

in the discount rate should be regarded with

caution. •ll

The use of very low discount rates for long-term public projects may, however, impose an unwanted financial burden on future generations.

7.14 McLachlan Group, in its report to the Committee on

supply options, reviewed information on discount rates from a number of sources and pointed out that there was a lack of

uniformity in the rate for and method of assessing the cost of

funds invested in government bodies in Australia although the Federal Treasury recommends the use of 10 per cent.l2 In its

economic appraisal of the three major options, McLachlan Group used both five and ten per cent discount rates but did not

provide a recommendation as to which value was the more

appropriate.

Coal escalator, capacity factor and conversion effic iency

7.15 Estimates of the cost of electricity generated by a

thermal power station are particularly sensitive to increases in the price of fuel above the general rate of inflation, termed

fuel cost escalation. In its 1979 Report the HEC assumed a fuel

cost escalation rate of zero per cent.l3 This figure was also

used in the 1982 'Financial Analysis•.l4

7.16 Dr A.J. Kellow, in his submission to the Committee,

pointed out that fuel cost escalations are unlikely to occur if

long-term contracts for fuel are entered into, as is usually the case for bulk purchases, or if a 'captive' coal supply, such as

a privately owned coal mine, is obta ined.l5

7.17 Kellow also discussed two important thermal perf o rmance criteria, capacity factor and conversion efficiency. He stated:

155

'The capacity factor a thermal station can

run at in the long term and the efficiency

with which it can convert the heat energy in

coal into electrical energy depend very

strongly upon matching boiler design to the

characteristics of the coal to fuel the

boiler. With a modern pulverized coal boiler a capacity factor of about 75 per cent and a

conversion efficiency of 37 per cent

(generated energy) are normally achieved if design is closely matched to coal

characteristics (St. Baker 1981). Allowing for station losses, the effective conversion efficiency (energy sent out) which can be

expected from 200 MW units is 34 per cent.

The Hydro-Electric Commission has been

criticised by its consultants for assuming a capacity factor of only 60 per cent for a

thermal plant (Gibb in Hydro-Electric

Commission 1979; Cameron, Preece 1982) but

has never been seriously questioned over its assumed conversion efficiency of only 31.5

per cent. It has never considered variations in design (and therefore costs) for plant to

handle different coals and it seems clear

from its rather pessimistic performance

expectations that it is unaware of the

importance of matching boiler and fuel in

order to attain maximum performance and

instead has simply based its cost estimates

on plant which could handle a variety of

coals, with a consequent reduction in

performance.

These two factors have inflated both the

capital and fuel cost components of its unit

cost estimates for a thermal development. The capacity factor assumed makes no difference to the present analysis, however, as the

comparison here is between like programmes -and the Commission has stated that each is

capable of meeting the projected load growth to 2000 AD. It does make a considerable

difference to the unit cost estimates for

power from a thermal station, and Appendix A

discusses the effect of different performance assumptions and system effects on unit costs.

The use of a conversion efficiency of 34 per

cent does make a significant difference to

the analysis by reducing the annual fuel bill

for a thermal station and has been assumed in

this analysis. •16

156

7.18 This discussion indicates that there are a number of

parameters associated with a thermal option the value of which may vary so that the final estimate will be a product of the

particular values chosen.

HEC cost comparisons

7.19 In its 1979 Report the HEC provided estimates of

indicative comparative costs of generating electricity and in its March 1982 'Financial Analysis' the HEC provided revised

cost estimates of the Gordon-below-Franklin scheme and a

notional coal-fired thermal station (Table 7.1). The annual

capital requirements for the alternative hydro-electric and thermal development programmes were also provided in the

'Financial Analysis' {Tables 7.2 and 7.3) and f rom these tables it can be seen that a hydro-electric development program would

be $931.85 million more expensive than a thermal development

program. These figures do not take into account varying dollar values and cannot be compared directly with present day costs, nor do they take into account operation costs. The tables

therefore cannot be considered to be in any way cash flow

analyses. In fact, the HEC appears not to have published any

discounted cash flow for either development programme. Repeated requests by the Committee for this informati on have been

disregarded.

157

>-' Vl co

IeQle

1.1:

Qo§t

1982

(0%

General

Inflation;

O%

Fuel

Inflation;

5%

Interest

Rate)

Qoal

-N.S.H.

Nominal Long Term

Initial

Capital

Cost

Initial

Capital

Cost

Annual

Com

para-

Commiss. Average

excluding

interest

including

interest

Revenue

tive

Cost

Date

of

Energy

during

construction

during

construction

Require-

per

Unit

S c heme

Increment

ment

of

Energy

(30

June)

Total

Cost/kW

Total

Cost/kW

LTAEo2)

LTAEO

(Cents

(MW

av.)

($

mills)

$

($

mills)

$

( $

mills)

per

kW.h)

tlydro

Gordon below

Franklin

1991

180.0

372.27

2068

452.891

2516

25.788

1

.64

(transmission

costs

excluded) Gordon below

Franklin

1991

171.o3)

387.065

2264

469.852

2748

26.885

1.'79

(transmission

costs

included) Thermal

No.1 -

200

MW

coal

1990

120.0

245.40

2045

261.52

2179

47.215

4.49

fired

thermal

No.2 -

200

MW

coal

1995

120.0

134.90

1124

142.78

1190

38.375

3.65

fired

thermal

Combined 2 x

200

-

240.0

380.30

1585

404.305)

1685

85.590

4.07

thermal Notes:

1)

Comparative

cost

data

in

January

1982

values

5%

per

annum

interest

rate.

No

adjustment

made

for

relative

price

changes

of

cost

components

2)

L.T.A.E.O.

means Long Term

Average

Energy

Output.

3)

5%

transmission

line

losses

assumed

to

be

incurred

in

delivering

energy

from

the

hydro

station

to

the

major

load

centres.

4)

Thermal

stations

located

at

Bell

Bay

which

is

a

major

load

centre.

No

transmission

line

losses

or

additional

lines

assumed.

5)

Costs

include

$29

million

incurred

in

restructuring

the

H.E.C.

design

and

construction

force

consequent

up on

a

sud

den

unplanned

change

from a

hydro

development

programme

to

a

thermal

development

programme

carr

ied

out

by

contract

.

1.2;

AnnYgl

1982-2QQQ

(i

mill1Qns)

January

1982

Currency

Values;

5%

per

annum

interest;

no

inflation

HigrQ

Financial

Pieman

Great

Lake

Conversion

Translines

Proposed

Other

Hydro

Total

Year

River

Power

Raising

and

of

Bell

Bay

Substations,

Gordon below

Schemes

to

Capital

Ending Development

3rd

Machine

to

Coal

Sys.Extensions

Franklin

meet Load

Require-

30

June

Gordon 1

Firing

& Sundry

Works Growth

after

ments

1991.

1982

73.43

5.49

21.68

2.25

102.85

3

63.

2 6

1.

90

1.

86

34.77

7.37

109.16

4

53.74

0.69

8.67

29.68

29.15

121.93

5

36.40

1.37

25.07

23.88

42.98

129.70

6

27.59

3.4(l

34.83

26 .oo

61.87

153.69

>-'

7

5.80

15.14

36.70

26.00

52.16

135.80

U l

8

0.85

7.09

11.38

26.00

53.92

9.53

108.77

\0

9

0.55

1.04

26.00

64.72

25.21

117.52

1990

0.42

26.00

79.08

28.46

133.96

1

2&_.00

53.27

73.31

152.58

2

26.00

7.69

92.86

126.55

3

26.00

4.44

125.09 155.53

4

26.00

-6.00

137.55

157.55

5

26.00

125.39

151.39

6

26.00

132.77 158.77

7

26.00

94.98

120.98

8

26.00

43.51 69.51

9

26.00

19.10

45.10

2000

26.00

-7.60

18.40

261.07

36.05

119.55

500.01

452.90

900.16

2269.74

Source;

HEC

March 1982

Financial

Analysis-

Table

7.

1--' m 0

Financial

Pi e man

River

Year Power Ending Devel o pment 30

June

1982

73.43

3

63.26

4

53.74

5

3 6.4

0

6

27.59

7

8

0.85

9

1990

1

2

3

4

5 6

7

8

9

2000

261

.07

Table

Annual

Capital

Requirement

1982-2000

($

millions)

January

1982

Currency

Values;

5%

per

annum

interest;

no

inflation

Thermal Development

Programme

Great

Lake

Conversion

of

Translines,

No

1 -

No

2 -

Raising

and

Bell

Bay

to

Substations

200

MW

200

MW

3rd

machine

Coal

Firing

Sys

Extension

Coal Coal

Gordon 1 and

Sundry

Thermal Thermal

Works

5.49

21 .65

1.90

1.

86

0.69

8.67

29.58

1.37

25.07

22.95

3.40

34.83

24.35

2.46

15 I

14

11.91

7.09

11.38

20.85

31 .37

1.04

22.33

110.63

0.42

24.20

66.76

25.18

32.10

26.00

6.90

3.59

26107

16106

26.00

26.00

34.58

26100

27.52

26100

3.60

26.00

1.30

26.00

36.05

119.55

482.95

S o ur

c e:

HEC

M a rch

19 82

Finan

c ial

A n alysis-

Table

8.

Other

Schemes

Total

to

meet Load

Capital

Growth

after

Require-

1995

ments 100.57 101

I

72

92.68 92.63 92.64 134.55 91.38 57.28 36.49 44.53

177

61.35

2.14

44113

172 26172 144

26144

26.04

1337189

7.20 In both 1979 and 1982 the HEC argued that the

Gordon-below-Franklin scheme would be cheaper in terms of unit cost of energy than a thermal power station. However,

comparisons between supply options in terms of cents per

kilowatt hour is only one aspect of financial considerations

necessary for project evaluation and may in fact be misleading for a number of reasons. First, the comparison made by the HEC,

although using a five per cent interest rate which may

accurately reflect the current borrowing rate, did not properly recognise the opportunity cost of capital for public projects. Secondly, the actual cost of generation from a specific power

station is only relevant if sales are to be made based on that

cost. A more useful comparison would be the average cost of

generation from the total system with the alternative increments added to it. Thirdly, the roles of a hydro-electric station and

a thermal station are different and they would be managed in

different ways. In a well managed m,ixed system thermal stations are used to ensure that maximum possible benefits are gained

from the hydro-electric system. Thermal stations contribute not only an increment to total capacity in their own right, but also

enable the long-term average capacity of the hydro-electric

station to be enhanced. The extent to which the Tasmanian system would be 'firmed up' by the addition of a thermal station can

only be computed by a detailed mathematical modelling exercise. Fourthly, the value of 1. 64 cents per kilowatt hour for power

from the Gordon-below-Franklin scheme is a minimum value based on full use of the power station after commissioning. If demand

did not eventuate, this value could be expected to increase as

interest would still ne e d to be paid. The value of 4.07 cents

for electricity from a 2 x 200 MW thermal power station is

closer to a maximum value as fuel costs would be saved if demand

were less than the full capacity of the station.

161

Cameron, Preece International review

7.21 In February 1982 the consultants, Cameron, Preece

International, were requested by the Government of Tasmania to review the HEC's updated financial analysis of the Gordon River Power Development Stage Two. In this review Cameron, Preece

International found that: ,_

The factors by which the June 1978 cost

estimates are being adjusted to January 1982 cost estimates are acceptable.

The estimates for the civil works for

the Gordon below Franklin Scheme are

soundly constructed but it be

prudent to allow additional amounts to

cover certain cost items and a higher

total contingency allowance than has

been provided. The civil works cost

estimate, prior to allowances for

contingencies and general overheads, may be underestimated, at January 1982

figures, by up to 11 percent on the

preliminary quantities given. A

contingency allowance appropriate to the level of investigation and design to

date and the preliminary quantities

suggest that an upper limit of between

plus 20 and plus 30 percent be allowed

on Gross Civil Costs, excluding interest during construction.

The estimate for the cost of a 200 MW

coal fired thermal generating station

are considered appropriate but the

allowances for contingency and

engineering and administration are high. The capital cost of the thermal option

may well be overestimated by 20 percent, at January 1982 figures, but this would

not have a significant effect on the

unit cost of energy from this source.

Based on the estimates as updated the

unit cost of providing energy from the

200 MW coal fired thermal system is 4.0

cents per kilowatt hour and the unit

cost from the Gordon below Franklin is

1. 82 cents per kilowatt hour in January

1982 dollars. (Thermal unit rate based

on the use of Tasmanian coal.)

162

Based on a sensitivity analysis of the

effect of civil costs for the hydro

option being say 25 percent higher than

estimated, the unit cost of energy from

the Gordon below Franklin rises to 1.95

cents per kilowatt hour in January 1982

dollars.

The assessment of alternative forms of

energy is correct and only hydro and

coal fired thermal options are currently viable. The only change seen to this

situation before the year 2000 would be

if natural gas discoveries close to the

north coast could be utilised.

Interconnection with Victoria should be kept under review for a future two way

transfer of power. •17

Other cost comparisons

7.22 Many submissions to the Committee criticised the

methods used by the HEC to estimate energy costs for the various supply options and the assumptions made to arrive at these

figures. In particular, the South Tasmania Committee (NSW)

in its submission stated:

'The HEC has devoted considerable space in

its report to questions relating to the

relative financial costs of a thermal and a

hydro scheme. This is only one side of the

coin, for it is necessary also to consider

the relative financial benefits of each

The matter of financial arrangements made

needs more examination than this because,

since the interest cost of hydro schemes is

very large, the way in which such a scheme is

paid for has serious financial and social

implications for Tasmania.

The HEC chose to use four methods for making

comparisons between a thermal scheme and a

hydro scheme. These were :

a. Rate of capital expenditure b. Annual revenue requirement c. Unit cost of energy

d. Present value of expenditure

16 3

Each of these methods, as they have been used

by the HEC, have inadequacies that render

them unsuitable in determining the relative merits of alternatives. Methods b. and c. in

any case, are only different ways of saying

the same thing. •18

7.23 The South West Tasmania Committee (NSW) then provided a

detailed discussion of the inadequacies which it claimed

invalidated the HEC's cost comparisons and then presented

alternative simplified estimates, based only on capital and

operating costs. These results revealed that 'the present value of a 2-uni t thermal scheme is higher by $197 million than the

Integrated Development. •19

7.24 A number of other submissions to the Committee provided

alternative comparative cost estimates for hypothe tical

hydro-electric and thermal development programs.

7.25 Mr Shann Turnbull, in a report commissioned by the

Business Association for Economical Pow e r and pr e sented t o the Committee as a submission, calculated that a coal-fired th e rmal option would produce power at a lower cost than a hydro-electric option when the construction costs of the hydro-electric option were equal to or greater than slightly more than three times the

construction costs of a thermal station. 20 Turnbull maintained that typically this ratio held and to illustrate this c ited

costs from the Pieman scheme and the Muja C 2 x 200 MW power

station in Western Australia . 21

7.26 Mr A. Blakers, in his submis s ion t o the Committee ,

compared the generation costs of hydro-electric, thermal, wind and photovoltaic power schemes. The analyses carried out by

Blakers compared the electricity generati on costs of each opti o n at vary ing discount rates ove r a range of pow e r demand gr owth

rates. In evidence to the Committee Blakers explaine d:

164

7.27

7.28

'As you will see in my submission I have been

so bold as actually to put numbers on the

generation costs of wind, solar, thermal and hydro-electric options, assuming a variety of discount rates and power demand growth rates. I have done this by taking HEC figures for

everything except these two parameters and

reworking their costs, based on the figures

given in the HEC Report. If the power demand

growth rate and the discount rate agree with

the HEC's choice, then I agree with its

generating costs. However, if I take a

different set I get a very different

generation cost .

. . . If you choose a discount rate of about 5

per cent per year and a high growth rate of

about 2.6 per cent- which is more or less

the HEC growth rate you get a price of

about 1.6 cents per kilowatt hour in 1981

dollars. However, if you choose a discount

rate of 10 per cent and a power demand growth

rate of, say, 1.5 per cent you are up to

about 5.5 cents per kilowatt hour- quite a

large escalation. r23

Blakers further pointed out that:

'although hydro-electricity is clearly

cheaper than thermal on HEC capital

construction cost figures at discount rates of 5 per cent, at 10 per cent it is very

different. In fact stage two thermal of the

proposed twin unit would produce cheaper

electricity than the dam. The average cost of the stage one and stage two thermal would

probably be comparable with the cost of the

integrated development. •24

It was concluded by Blakers that:

'At discount rates of around 10 per

is unlikely that hydro-electricity cheaper than thermal or wind

electricity.' 25

165

cent, it

will be

generated

7.29 that

Dr A. Kellow argued in his submission to the Committee

virtually all previous estimates of unit cost of

electricity were incomplete in that they had ignored the

fundamental rule of cost-effectiveness studies that like must be compared with like. Further to this, Kellow stated that

7.30

'the only true basis for comparison should be the present value of the cost streams of

development programmes with equivalent

benefits discounted at a rate which reflects society's time preference. •26

Using HEC figures, but assuming a 34 per cent thermal

conversion efficiency and a coal price of $40 per tonne, Kellow

compared the present value of an 'all hydro' program with that

of an 'all thermal' program at discount rates of five and ten

per cent. Four scenarios were considered: no construction cost or fuel cost escalation; two per cent per annum fuel cost

e scalation; two per cent per annum construction cost escalation;

and two per cent per annum fuel and construction costs

escalation. The financial benefit favoured the 'all hydro'

program in only two of the eight cases examined (two per cent

fu e l cost escalation at five per cent discount rate, with and

without construction cost escalation). In the other six cases

the thermal option was less expensive than the hydro-electric option.27

7.31 Kellow's analysis, however, did not include interest

costs which, while presumably favouring the thermal option

further, means that these calculations do not constitute a

c omplete cost/ benefit analysis.

7.32 A numb e r of submissions to the Committee commented on

the accuracy of the HEC in its past cost estimates and, in

particula r, pointed to the cost escalations, in real terms, of

the Pi em an scheme which was estimated in 1971 to cost $134

million (including interest and inflation) and will now cost in excess of $700 million.28

166

McLachlan Group cost comparisons

7.33 McLachlan Group in its consideration of electricity

supply alternatives carried out an economic appraisal of each of the three major options - hydro-electricity, thermal power and interconnection with mainland Australia.29 Using a discounted cash flow technique and data obtained from HEC publications,

McLachlan Group calculated present value, annual revenue

requirements to equal the present value and cost of electricity produced for seven cases:

l. Hydro-electric - Gordon-below-Franklin.

2. Hydro-electric - beyond Gordon-below-Franklin Anthony-Henty, King Diversion, Albert Rapids. Huon,

3. 2 x 200 NW thermal coal-fired power station using NSW

coal with 30 year life and nil per cent load factor.

4. Thermal coal-fired as for 3. above but with 30 per cent

load factor.

5. Thermal coal-fired as for 3. above but with 60 per cent

load factor.

7.34

6. Thermal coal-fired as for 3. abov e but with 75 per cent

load factor.

7. Cable to Victoria, 300 MW capacity, cost of electricity

excluded.

Two values were considered for s everal va riables used

in the analyses: inte rest rates at nil and fi ve per cent;

funding at 18 per cent and 100 per cent equity ; discount rate at

five and ten per cent; and nil and two per cent escalator on

167

coal price. Inflation was not considered in the analysis as this contradicts the purpose of a discounted cash flow. The cost of

coal was assumed to be $59 per tonne (the figure used by the HEC

in its 1982 'Financial Analysis').

7.35 Combinations of these variables produced eight figures

for each of the present value, annual revenue requirements and electricity cost for each case studied. From these results

McLachlan Group made the following conclusions:

'1. The Gordon below Franklin is a good

hydro-electric scheme economically. It can provide 172 MW (av) extra electric

power to the Tasmanian grid, if used

near its capacity, more economically

than other hydro or coal fired thermal

options.

2. The actual price for power from

Gordon-below-Franklin varies very

significantly dependent on what values are taken for real interest to be paid

on funds borrowed and return required on funds invested.

It varies from below the current

Tasmanian price average of 1. 914 cents

per kW hour at 1.625 cents per kW hour

to above at 3.12 cents per kW hour,

dependent on these factors.

3. Hydro schemes proposed to follow Gordon

below Franklin would add a further 194

MW (ave) to the Tasmanian grid at a cost

about 70 percent dearer than that

obtained from Gordon below Franklin.

4. Coal fired thermal power stations do not

compare economically with the hydro

options. Power from coal fired thermal

for all but very low utilisation values

is significantly more expensive than

Gordon below Franklin. At most

utilisation values coal fired thermal

power would be 3 or more times the cost

of the Gordon be l ow Franklin power.

5 . A cable link to Victoria would provide

300 MW of power capacity as follows:

168

First 172 MW for about 50 per cent

more than Gordon below Franklin

when Gordon below Franklin is fully utilised. Remainder above this 172 MW at competitive or better than

the hydro schemes proposed beyond Gordon below Franklin.

6. For the 172 MW provided by the cable to

match a fully utilised Gordon below

Franklin, a $20 million subsidy per

annum would be required.

This is equivalent to an ll percent rise

in average electricity prices in

Tasmania. This would still leave

Tasmanian electricity price average at about one half or less of the average of

the mainland states.

If two-thirds of the $20 million

difference was taken by the industrial

sector and one-third by the residential and commercial, i.e. about on a usage

basis, this would mean $44 per annum on

the average householder's bill (assuming 150,000 householders).

7. We have assumed power bought from the

mainland at 3. 50 cents per kW hour. If

this could be purchased at 2.50 cents

per kW hour then over its 300 MW

capacity, the cable can produce the

first 172 MW of power at the same price

as Gordon below Franklin. McLachlan

Group have used $300 million as the cost

of a cable project in January 1982

dollars to provide 300 MW (ave) to

Tasmania and to be able to sell surplus

hydro capacity to the mainland. No

detail castings for this proposals are

available but the figure we have used is

significantly higher than other

commentators. Therefore we believe that it is a conservative figure for

comparative purposes.

8. We must stress that we do

what price a contract for

firm power could be made.

a very attractive contract

169

not know at

30 0 MW (ave)

This be

to a rr.ainland

supplier as he could plan to provide it

at a very high capacity factor and thus

very competitive prices.

We understand that a number of major

industrial customers could be receiving power at January 1982 prices, at a rate

probably less than this 2.50 cents per

kW hour. If a contract for 300 MW (ave)

from the mainland could be obtained by

Tasmania at this price then the cable

proposition is as cheap as the Gordon

below Franklin when fully utilised and cheaper for any demand less than full

utilisation. 9. A cable tying Tasmania's grid into the

mainland grids would result in system

use economies to Tasmania and the

mainland states systems for which we

have made no allowance, but which, in

negotiation, would no doubt close the

$20 million gap of a 3.50 cents mainland

electricity price and full utilised

Gordon below Franklin.

10. A cable providing 300 MW (ave) would be

constructed for a construction cost

saving over the next 15 years of in

excess of $500 million compared to the

hydro proposals including Gordon below Franklin. These funds should be

available to provide employment in

Tasmania for Tasmanians.

11. If demand does not appear to take up the

capacity supplied by Gordon below

Franklin then the cost has to be borne

by the customers. At 10 percent discount rate and 5 percent real interest the

annual revenue requirement for Gordon

below Franklin is $37 million. This

spread over 900 MW (ave) base demand

would add 0. 4 7 cents or 24 percent to

current Tasmanian average prices.

12. Similarly, a cable not utilised would

have an annual revenue r equi r emen t of

$28 million which would add 0.36 cents

or 18 percent to current Tasmanian

average prices. However, a cable would

always be used. Refer conclusion 16.

Therefore, with a cable operated as

referred to in this report this

situation could not arise.

170

13. A cable even if unused, with a capacity

of 300 MW (ave), would be a less

expensive risk than the Gordon below

Franklin unused with a capacity of 172

MW (ave) by about $9 million per annum

or 6 percent saving on current Tasmanian average electricity prices. However

because a cable would be used the real

saving to the Tasmanian community would be $37 million per year assuming 5

percent real interest on funds borrowed 10 percent real return on funds

borrowed.

14. Page 7 of this report shows a supply

shortfall of the hydro only system

forecast to be in 1990 47-214 MW (ave)

in 1995 86-395 MW (ave)

in 2000 138-730 MW (ave)

If the lower end of this range is the

demand which occurs, then Gordon below

Franklin would be required only for 47

MW in 1990, 86 MW in 1995 and 138 MW in

2000. At these utilisations the price of Gordon below Franklin power is

considerably in excess of that for the

fully utilised case. In 1990, power would be 3-1/2

expensive as the fully utilised 1995, twice as expensive and

1-1/4 times as expensive.

times as

case; in

in 2000,

In these

circumstances, power by the be cheaper than power from

below Franklin scheme.

cable would the Gordon

15. No utilisation of the hydro schemes

beyond Gordon below Franklin would have a similar effect on the actual price of

power produced but starting at a much

more expensive base. Any non-utilisation of these hydro schemes would make them

progressively more expensive than power from the cable.

16. A non-utilised cable would not occur

under the arrangements proposed here as a firm contract would be entered into by

Tasmania with the mainland for 300 MW

(ave) power. If demand for Tasmanian

171

power did not occur, then surplus hydro

would be available to sell back to the

mainland. This would very markedly

reduce the $20 million per annum

advantage of a fully utilised Gordon

below Franklin and in fact probably

remove it altogether.

The extreme case would be where the 300

MW (ave) contracted from the mainland

was returned to the mainland from the

hydro scheme hopefully a large

portion at peak power rates to make net

cost of the cable power zero or even

make a surplus on the arrangement.

17. Gordon below Franklin power, if demand

is below 100 MW (ave ) would be more

expensive than cable power from the

mainland, paying 3. 5 cents per kW hour

to the supplying authority.

18. H.E.C.'s figures suggest that demand

will be greater than the 172 MW capacity

of the Gordon below Franklin before it

opens in 1991. The McLachlan Group low

band suggests this would not even occur

by year 2000. There must be flexibility

in supply to economically provide the

high side of demand if it occurs or

store or sell to someone else surplus if

the demand does not occur after

provision for it has been made. The

cable as conceived and proposed here

fulfils this dual requirement

admirably.'

Other Economic Considerations

Flexibility and risk

7.36 There is generally risk attached to the outlay of large

sums of capital on major public works projects or commercial

ventures. For a public pr oject, the risk is that the capital

invested in it is not fully utilised s hould the project fail to

realise its goals. For exampl e , only part of th e capacity of a

new power station might be needed , the project might be

uneconomic, or the public might not der ive th e e xpected benefits from it, and so on.

172

7.3-/ As capital is a scarce commodity, there are usually

competing demands for it. If that capital is not fully

productive because the project is underutilised, then the public interest is poorly served. An alternative project, deferred or abandoned because funds were diverted elsewhere might, in fact, have been of more benefit to the community. It is therefore in

the public interest to minimise the risk attached to any public project.

7.38 For an electricity authority considering the

construction of further increments of power for its system, the optimum conditions for determining the capacity, timing and form of electricity generation would be long-term economic stability with a pattern of steady growth in electricity consumption.

7.39 Currently Australia is in a period of economic

recession and is not likely to experience a period of steady

economic growth for some years.

7.40 risks

This uncertainty in the attached to development economic outlook projects and

increases in times

the of

uncertainty investment decisions are usually directed towards flexibility to minimise economic risks. An electricity authority can achieve this by keeping capital expenditure as low as

possible and proceeding with new projects which have relatively short lead times and which add small increments of capacity to

the existing electricity system. These features enable

investment decisions to be deferred until as close as possible

to the time when additional capacity is required and,

consequently, the risk of having significant oversupply of

capacity has markedly diminished. Sometimes an electricity

authority has to forego economies of scale in maintaining

flexibility in its supply programme but this may be more

desirable than running the risk of having public moneys tied up

in unproductive generating capacity.

173

Effects of HEC funding

7.41 Since 1969 the proportion of internal funds provided by

the HEC has remained below 25 per cent (Table 7.4). For 1982 it

is expected to be about 17.5 per cent. There are four sources of

funds otherwise available to the HEC: Tasmanian Treasury general purpose loans, semi-government loans, infrastructural borrowings and open-market borrowings. Prior to a recent decision, funding was also available from the Loan Council.

174

,__. -J u '

Year

Capital

ended

Exp

enditure

30

June

$m

1969 38 .

37

1970

45.83

1971

36 . 8 1

1972 35

.4 3

1973

28.7

1 97

4

33.62

1975

42.18

1976

47.42

1977

58 .5 9

1978 57.21

1979 6 4. 5 1

1980

78.53

1981

93 .50

1982

119.7

0

(Budgeted)

Table

7.4;

Hydro-Electric

Commission

of

Tasmania

Statement

of

total

capital

expenditure

and

sources

of

finance

External

Borrowings

Internal

Total

Treasury

Commonwealth Semi-Government

Finance

Loans

(Tas)

Bridging

Loans

Finance

$m

%

$m

%

$m $m

$ m

8.77

23

29.6

77

20.7

3.2

5.7

8.83

19

37.0

81

23.1

9.7

4.2

4.81

13

32.0

87

24.5

3 . 2

4.3

2 .13

6

33.3

94

26.0

2.5

4.8

0.7

2

28 .0

98

22.4

-

5.6

5 .62

17

28.

0

83

23.0

-

5.0

10.

28

24

31.9

76

23.2

-

8.7

6.7

14

40.7

86

29.7

-

11.0

13.5

23

45.1 77

31.0

-

14.1

11.4

20

4 5 .8

80

23.0

-

22.8

7.9

12

56 .6

88

16.7

-

2 4.9

15.6

20

62.9

80

12.7

-

29.1

14.0

15

7 8 .5

85

11.3

-

42.7

21 .o

17.5

98.7

82 .5

25.6

-

32.6

HEC

Annual

Reports

Infrastructure Borrowing

$m

15.0 21.1 25.5 40.5

7.42 During the last two decades the HEC construction

programme absorbed a large proportion of the Commonwealth loan moneys available to Tasmania. In 1968-69 Tasmania spent 51.6 per cent of Commonwealth loans on hydro-electric developments.30 In 1981-82 total general purpose loans to Tasmania were $91.6

million of which 28 per cent was allocated to the HEC, largely

for expenditure on the Pieman scheme.3l

7.43 In 1981-82 100 per cent of semi-government borrowings

($32.6 million) and 95.3 per cent of the $42.6 million allocated to Tasmania under the infrastructure borrowing program went to the HEC. In that year the HEC's total capital expenditure took

52 per cent of the State's total Government Works Program and,

while the HEC received an overall increasing in funding of 28

per cent, a number of other important public areas sustained

large decreases in their allocations.32

7.44 A large number of submissions to the Committee

comme nted on these high levels of HEC funding and the apparent

detrimental effect that this had had on other public sectors in

Tasmania.33 In particular, the Honourable Douglas Lowe, former Premier of Tasmania, gave lengthy evidence on

subject:

'When the semi-governmental borrowing

authority for large instrumentalities is

allotted each year many of the large local

government authorities and I mention the

four city councils and four of the large

municipal councils have all from time to

time made application for a share of that

semi-governmental borrowing authority for large instrumentalities, bearing in mind that until the end of last financial year they

could all borrow up to $l.2m. I think that

amount has been increased to $1.5m as a

result of the rece nt Premiers Conference.

Many of these large government authorities

have had borrowing programs in excess of $2m that were required in order for them to keep

on schedule with their own services programs and developmental works. Frequently because

176

MHA,

this

of the demand of the Hydro-Electric

Commission for what I think I referred to in

my submission as a lion's share of the

semi-governmental borrowing program we have had to ask these local government authorities to co-operate in toning down their demands in order that they could stay within the $1.2m

limit that then applied. Of course they will

be somewhat relieved at the increase in the

amount that occurred this year. •34

7.45 When requested to explain more specifically what public

areas had been affected by a restricted availability of funds, Mr Lowe replied:

'I think so far as councils are concerned you

would look at some of the sewerage programs

that they would have wanted to proceed with

and some of the backlog of road services. I

am speaking generally but to my recollection those were the priorities that were always

listed. There has been a running down of the

standard of urban roads in key

municipalities, for example, as a result of

the rapid growth of those municipalities and the need to upgrade pavement and other

services. That work has been held back quite

significantly because of the lack of total

resource on the part of those local

government authorities. •35

7.46 Mr Andrew Lohrey, a former Minister f or Energy and

Resources, the Environment, National Parks and Wildlife, Mines, Forestry and at various times Minister

Hydro-Electric Commission also commented effects of high levels of HEC funding:

responsible at length

'In the past Tasmania has been able to afford

to pay the high cost of hydro schemes only

because we have cut back expenditure in other areas such as railways. In the future it is

doubtful if the State could pay out of loan

moneys the large amounts needed annually for a major hydro scheme without lar ge input s of

infra-structure financing. If this has to be

the case, then funds for housing, tour ism,

fisheries, agriculture, for e stry developments etc. will suffer. Tasmania may be able to

177

for on

the

the

afford a major hydro scheme in the future,

but it will be able to afford little else. •36

7.47 However, these statements conflict with statements made by the Department of Industrial Development in its submission to the Committee:

' ..• in this year, 79 per cent of funds are

being raised under Semi-Government and

Infrastructure borrowing programmes and from internal funds, expenditure sources for which there is limited, if any, competition from

other Government expenditure areas.

While it is acknowledged that some element of competition does exist in the allocation of

State loan funds, when seen in perspective of the total works funding programme for the

HEC, this competition is by no means as

severe as the Wilderness Society would have us believe.

A further point of relevance here is that

there is a limit on the amount of loan funds

that can be allocated to non-revenue earning capital works (schools, roads, hospitals,

etc ..•. ). This limit is the pocket of the

taxpayer. •37

Flow-on effects of intra-state spending

7.48 The proportion of intra-state expenditure was

considered by the HEC to be an important aspect of the economic

implications of the supply options due to the flow-on benefits arising from spending within the State.

7.49 In the 1979 Report the HEC stated that the intra-state

capital expenditure for a thermal development program would be $15 million less than intra-state capital expenditure for th e

Gordon-below-Franklin scheme.38 In the March 1982 HEC 'Financial Analysis' figures Gordon-below-Franklin were also

construction given to

program

show that the

would result in a

much larger proportion of intra-state expenditure (69.3 per

178

cent) than would a thermal development program (44.2 per

cent) .39 However, in the latter report the annual average

construction phase expenditure for the Gordon-below-Franklin was given as $19.8 million and the thermal development was given as $10.29 million, a difference of only $9.5 million, which is

considerably less than the figure of $15 million given in 1979.

7.50 The HEC has not included interest repayments in these

figures. As the Loan Council recently allowed electricity supply authorities access to open-market borrowings, but denied access to less expensive Loan Council funds, and as hydro-electric

schemes are capital intensive, the ratios of intra-state/

interstate expenditure for the two options could well be altered to the extent of favouring thermal with the inclusion of

interest.

7.51 The proportion of intra-state expenditure resulting

from interconnection with mainland Australia was considered briefly by the HEC in 1979 and concluded to be minima1.40

However, the basis for the HEC's conclusion was not given and it

is probable that the possibility of manufacturing the cable in

Tasmania was not considered by the HEC.

Employment

7.52 Over the last several decades the HEC has been an

important source of employment in Tasmania, both directly

through construction projects and indirectly through the supply of cheap bulk electricity. As stated by the HEC in its

submission to the Committee:

'During the 1c.st five years the total number

of people directly employed by the

Hydro-Electric Commission has varied in the range of 4350 to about 4 800. Of these about

35%, at present some 1700, are employed on

construction activites.

17 9

7.53

When flow-on effects are taken into account the Commission's activities generate total employment in the range of about 7450 to

8300.

The total number of jobs attributable to the

Commission's present construction activities is about 4000.41 'The Commission supplies 19 industries with electricity under major industrial contracts. Without the benefits of a reliable and

economic supply of electricity many of these industries may not have been established in

Tasmania.

Together these major industrial customers

directly employ over 13 000 people. When the flow-on effects are taken into

account the total employment attributable to the Commission's major industrial customers is in excess of 35 000 Tasmanians.•42

In its 1979 Report the HEC stated that the level of

employment generated by the construction activities of the

Commission was a reflection of the proportion of intra-state

capital expenditure. In this report estimates were the levels of construction employment associated

alternative options of hydro-electric and thermal

provided of with the

development

and it was shown graphically that the workforce required for the Gordon-below-Franklin scheme would increase in such a manner as to match almost completely the decrease in manpower required for the Pieman development, thus providing a continuity of

employment in both field and administrative sectors of the

HEC. 43

7.54 In contrast, the construction workforce required for a

thermal development programme was estimated to be less. In addition, the shorter lead time for

si gnif i can tly the thermal

programme meant that employment levels on the Pieman would drop to almost 200, from a level of 1100 in 1980, before worker s

would be required. It was expected that there would also be a

180

corresponding diminution in the administrative and support staff of the HEC should a thermal development programme be

undertaken.44

7.55 Interconnection with mainland Australia was expected to provide negligible employment opportunities within Tasmania although, as with capital expenditure, it is likely that the HEC did not include the possibility of producing the cable within

Tasmania in this estimate.

7.56 In the HEC 1982 'Financial Analysis' the employment

advantages of constructing the Gordon-below-Franklin scheme rather than a thermal development using imported coal were again emphasised.45 However, the graphs used by the HEC to illustrate this difference also included e s timates of employment for

'notional further hydro de v elopment' (Figures 7.1 and 7.2). No explanati o n was provided as to what these notional developments we re, yet the number of people employ ed by them was shown to be

considerably greater than the number employed on the

Go rdon-below-Franklin scheme.

181

rr

:i' z

<(

"

Jul,.-1982

Figure 7.1: Notional Programme for Hydro Development

GORDON

BELL BAY'

l -l Tf:!_ERMAL

I

July 1Q8e

l__

'..t·

GORDON BEl OW

NOTIONAL FURTHER HYDRO DEVELOPMENT

- """

rigure 7,2: Thermal Development Using Imported Coal

l, "'c .) loU, CHINE

/ GORDON SWJE I

BElL 8A'f' i

.. , ....

Source: HEC March 1982 'Financial Analysis', p. 17.

182

7.57 A number of submissions to the Committee debated the

HEC estimates of the potential employment generated by each

option.

7.58 The South West Tasmania Committee (NSW) pointed out in

its submission to the Committee that the HEC had compared only

construction employment levels. 46 When the SWTC (NSW) graphed the levels of construction and operation workforce for

hydro-electric and thermal power, using figures presented by the HEC in its 1979 Report, a very different picture emerged (Figure

7.3). The SWTC (NSW) recommended that, although long-term

employment was greater for a thermal development programme, an even greater return in employment for money spent would be

achieved through the implementation of an energy conservation programme.47

183

Figure 7.3; Distribution in Time of for Thermal and Hydro Schemes

....

u

"' 0 .... :.:: c: 0 3: z 0 <&! .... 0.. 0 oil z 9. ,_ I L 1980

Source; Evidence, p. 777.

INHG!?AHO DE'IHOPMENT

2- UNIT THER MAL

184

f

l

f

3.59 Mr Stewart West, M.P. argued in his submission that

there were errors in the HEC estimates of employment associated with the hydro-electric option. West also pointed out that power generation was not the only means of employment generation in

the South West and that a dam could destroy potential permanent employment opportunities in the wilderness areas.48

7.60 Mr A. Blakers submitted that it was 'likely that

thermal, wind and solar options would result in greater

employment stability than a hydro option'. 49 He suggested that both photovoltaic and aerogenerator industries could be

established in Tasmania which would not only provide direct and indirect employment opportunities but which could ultimately result in two new export industries for the State.50

7.61 In evidence to the Committee Mr Robert Graham, former

Tasmanian Minister for the Environment and for Local Gove rnment, argued that during the last decade electricity consumption in the manufacturing sector had increased while the number of jobs had decreased. Graham stated:

7.62

' •.. job losses have been parallelled by a

massive increase in the consumption of

electricity. There is no evidence to support the argument that by producing more

electricity you will produce more jobs. •51

Further argument was provided by the former Tasmanian Premier, the Honourable D.A. Lowe, MHA, who stated, while

addressing the subject of the effects of HEC funding:

'it is my judgement that continued priority

being given to the HEC is reacting

detrimentally on local employment

opportunities, which would be available for these larger Local Gov e rnment authorities if they were able to proceed with their optimum

development of services for the needs of

their communities.•52

185

7.63 Unemployment in Tasmania is currently higher than in

any other Australian state. In September 1982 in excess of

18 900 people, about ten per cent of the State's workforce, were

unemployed.S3 Thus the employment potential of each option is of particular importance at the moment. However, levels of

employment, or unemployment, are inextricably linked with a

State's economy so that choosing an option purely on the basis

of the short-term employment opportunities it may generate, may not in fact be the optimum decision when other economic factors are taken into account.

Conclusions

7.64 A distinction must be made between the financial

feasibility of a supply option and the economic impact

associated with the choice of that option. The option presenting the least cost in terms of price per unit of electricity may not

in fact be the most desirable choice when the wider economic

implications of that choice are considered.

7. 65 In purely financial terms the cost of electricity from

a particular supply option will be dependent on a number of

factors, the most important of which are:

(i) the total

operation payments;

capital required for of the development,

the construction and including interest

(ii) the discount rate applied to the cash flow and the

power demand growth rate.

7.66 As it is virtually impossible for any person or

organisation, other than the HEC, to estimate construction costs for the Gordon-below-Franklin scheme the HEC figures must be

used for any comparative analysis of the financial feasibility and economic impact of supply options. If, as has been

186

suggested, the Gordon-below-Franklin scheme costs have been underestimated this bias will

estimates.

be retained in all other

7.67 As hydro-electric schemes are capital intensive, cost

estimates of them are highly sensitive to the interest rate

chosen. Over the last two decades real interest rates have

remained low and relatively stable. However, recent changes in the world economy and in the way in which the HEC is required to

obtain loans mean that interest payments are likely to be

considerably higher for the HEC in the future. McLachlan Group's discounted cash flow analysis for the Gordon-below-Franklin showed that the actual price for power from Gordon-below­

Franklin varied very significantly depending on the values taken for real interest to be paid on funds borrowed and return

required on funds invested.

7.68 Cost estimates for a notional coal-fired thermal power

station are particularly sensitive to the choice of coal price, fuel cost escalation rate, plant conversion efficiency and plant capacity factor. Differences between unit costs of thermal power presented in various submissions to the Committee and by

McLachlan Group can largely be attributed to the use of

different figures for these parameters. In particular, the

conflicting results of Kellow and McLachlan Group were largely due to $19 difference in coal tonnage price.

7.69 Low discount rates favour capital intensive projects,

such as hydro-electric schemes, and high discount rates favour projects with high operating costs, such as stations. There appears to be no consensus

appropriate discount rate, recommends ten per cent.

although

187

the

the thermal as to the

power most

Federal Treasury

7.70 The cost per unit of electricity to the consumer is

largely dependent on the extent to which the power development is used. The lower cost of electricity from the Gordon-below­

Franklin scheme, as determined by the HEC and the consultants to the Committee, McLachlan Group, is dependent on full utilisation of the power station.

7. 71 McLachlan Group also provided a discounted cash flow

analysis and unit energy costs for a cable link to Victoria and

concluded that a cable could provide 172 MW for about 50 per

cent more than the fully utilised unit cost of Gordon-below

Franklin power. Further power could be provided by the cable at a cost which would be competitive or better than power from

hydro-electric schemes subsequent to Gordon-below-Franklin.

7.72 The cost per unit of electricity generated is, however,

only one aspect of the economic implications of a power

development program and decisions made purely on the basis of

unit cost may be erroneous. A number of other economic factors

should be considered including, in the Tasmanian context, the

effect on other public sector projects of funding capital

intensive hydro-electric schemes, the proportion of intra-state capital expenditure and employment generated by the recommended and alternative projects. The Committee received a considerable amount of conflicting evidence on most aspects of these economic factors so that no one option appeared to be of outstanding

economic benefit than the other two.

188

CHAPTER EIGHT

SUPPLY STRATEGY

8.1 As discussed in Part 1 of this report, the economic

outlook length for Tasmania of the cur rent

is unpredictable, recession. It is

irrespective of the

this unpredictability

which hampers the forecasting of the demand for power.

8.2 It was in the light of this uncertainty that the

Committee adopted a forecast of demand made by McLachlan Group, which embraced both high and low growths of electricity in

Tasmania. The forecast of demand provided for a wide band the

range of which increased in percentage terms the further into

the future it went. The forecast also included the probability

that there would be a one in four chance that demand would fall

outside of the forecast band.

8.3 In Tables 4.10 and 4.11, the shortfalls in supply at

1990, 1995 and 2000, based on the McLachlan Group's forecast of demand, were set out. On the basis of these figures, the

Committee believes that it is reasonable to conclude that

construction of a major option would not have to be commenced

for three years. However, because of uncertainty in the growth

of demand, a review of demand at that time might indicate either

the immediate commencement of a major option or further

deferral.

8.4 The deferral of the commencement of constructi o n of a

major option need not put at risk Tasmania's electricity supply position in the early 1990s. There are other methods of

achieving continuity of a firm supply of electricity without

189

resorting yet to a major scheme. These will be described below. The Committee wishes to emphasise that it is not advocating the

permanent rejection of a major new scheme; it is simply

suggesting that flexibility be retained at a time when it

considers that there is no immediate or urgent need to proceed

with a major option.

8. 5 A major objective of an electricity authority is to

have available sufficient generating capacity to meet both

average and peak demand for power while keeping surplus

generating capacity to a minimum. Shortfalls in the supply of

electricity or the oversupply of generating capacity should, if possible, be avoided.

8.6 The effects of shortfalls in the supply of electricity

are obvious. Not only do they cause inconvenience to all

consumers but industry and commerce are also subject to

substantial economic costs from blackouts or the imposition of power rationing or restrictions. Industry also needs to be

assured of a sufficient power supply for future investment in

the State.

8.7 The oversupply of generating capacity also incurs

economic costs. Interest payments on capital invested in

unproductive capacity have to be met from revenue drawn from

other sources. This has the effect of increasing the price of

electricity. In these circumstances, the public interest might have been better served if the capital were to be spent on other

public works projects.

8.8 The optimum supply programme depends heavily on

accurate forecasts of demand. In times of economic uncertainty, accuracy is difficult, if not impossible, to achieve. The

problem is compounded in a small system because relatively small variations in demand can have comparatively serious effects on the system and the supply programme.

190

8.9 It is not difficult to plan a future power supply

programme for which there is a definite demand projection. A

number of supply options of a particular capacity can be

evaluated using various financial, economic, social and

environmental criteria to determine the most efficacious option. However, when the demand forecast band is wide, a different

approach is necessary.

8.10 In times of economic uncertainty, it is advisable for

an electricity authority to keep its options open for as long as possible and to be prepared to respond quickly to changes in its forecast of demand. In this way it will make the most effective

use of scarce and expensive capital resources and yet it will be able to take advantage of opportunities of potential industrial investment when they occur. Power schemes which can be mobilised and constructed quickly are favoured over schemes with lead

times of ten years or more. The later the decision to build a

scheme is made, the

completion. Similarly, more likely it will match demand on

small increments in capacity are more

attractive than large increments, despite the economies of scale which might be experienced from large units, because of the

flexibility they allow. Small units can be more accurately

tailored to meet demand, especially in times of uncertain growth in electricity consumption.

8.11 Much of the debate on the future power supply programme

for Tasmania of two major

scheme and a

has focussed on the comparative financial analysis options - the Gordon-below-Franklin hydro-electric thermal station. Few people have considered the third major option- interconnection with Victoria. of the Gordon-below-Franklin scheme have pointed

Proponents to various

financial analyses which hav e shown that the scheme will produce electricity at a cheaper unit cost than its alternative s at full

utilisation. As discussed in Chapter Se ven, there is no

certainty that the HEC data on which all those analyses were

191

based were correct as exemplified by the substantial cost

overruns experienced by the HEC in the construction of the

Pieman hydro-electric scheme. In addition, major hydro-electric schemes are unlikely to benet it from advances in technology as much as their al terna ti ves should. With magneto hydro dynamics expected to be a commercial proposition in the late 1990s,

coal-fired stations equipped with that technology should be

considerably cheaper to run than at present. In any event, it is

not sufficient, in the opinion of the Committee, to make the

sole criterion the cheapest unit cost of electricity assuming full utilisation.

8.12 Neither the Gordon-below-Franklin scheme nor its two

major alternatives have the attributes or characteristics to fit into a supply strategy in a period of uncertainty. The long lead

times and the relatively large increment in capacity which any one of them would add to the system would not provide the supply

programme with any flexibility. If demand grew more slowly than forecast by the HEC there would be substantial unproductive

capital tied up in a scheme from which there would be no

economic return for some time. Of the three options, the

Gordon-below-Franklin scheme is the least flexible with its high capital cost, long lead time and little scope for technological advances. It is therefore undesirable to embark on a major

option at this stage which has little or no flexibility and

which may thus lock in expensive capital. It would also preclude the adoption of a more flexible supply strategy in the face of

an uncertain future.

8.13 In any event the Committee is not satisfied that

sufficient investigation has alternatives to the

been done by the

Gordon-bel ow- Franklin HEC int o

scheme.

Interconnection with Victoria was treated in a very curs ory way in the HEC's 1979 Report. Apart from discussions with Victoria, substantial engineering f easibility studies into the r oute of a cable, the mode of operation and integration into the Tasmanian

192

system are needed. The coal-fired thermal option was also not

investigated in the same depth as the two major hydro-electric schemes put forward by the HEC. With extra time, these options

can be properly examined.

8.14 Recent evaluation of coal deposits in Tasmania by a

number of companies has indicated a potential source of supply for a coal-fired thermal station. The prospect of having a

source of coal available in Tasmania for a thermal electricity

generating station is more promising now than in 1979 when the HEC released its report. However, further evaluation is

necessary to prove that sufficient reserves of extractable coal for long-term supply are available. In time, a clearer picture

should emerge about the extent of this resource. The

establishment of a coal field to provide coal for a thermal

station on a long-term basis would also assist Tasmania's

serious unemployment problems.

8.15 In considering

only took into account the potential advances

a supply strategy, the Committee not

the width of the forecast band but also

in technology which could enlarge the

range of feasible options or alter the comparative economics of existing options. For example, the Committee took evidence on developments in solar energy, wind energy and magneto hydro

dynamics, a process which could substantially increase the

efficiency of coal-fired electricity generation. The Committee was also aware of research being done into other forms of energy

which, in time, might provide economic alternatives to more

traditional methods of electricity generation.

8.16 Although such technological advances cannot be

considered as firm options at present, they should not be

completely disregarded.

193

8.17 With substantial research being undertaken world-wide

into many forms of electricity generation, both traditional and new, a deferral of a major power option in Tasmania would give

more time for a breakthrough to occur or for experimental

results to become commercial propositions.

8.18 It might become imperative for a major power option to

be commenced before there are developments in any of these

areas. There is no guarantee that the situation will change in

twelve months or in several years time. However, there is the

chance that Tasmania's coal reserves will be proven or that

technological advances will occur which will alter the economics of the existing major power options.

8.19 Earlier in this chapter, the Committee concluded that a

major option does not have to be commenced for three years.

8.20 In formulating a supply strategy, the Committee took

into account the possibility that either high or low growth in

demand might occur rather than the middle projection.

8.21 If low growth occurred, a major option might not be

required until the late 1990s if then. On the other hand, high

growth would require in 1995 substantially more power than what could be provided by the Gordon-below-Franklin scheme.

8.22 The commencement of one or more small hydro-electric

schemes in the mid 1980s would provide extra flexibility because it would supplement the capacity of a major option if growth in

demand was higher than expected and it would enable commencement of a major option to be deferred if it appeared that there would

be low growth in demand.

8.23 During the public hearing on 21 May 1982 the

Commissioner of the HEC told the Committee that the HEC was

investigating some small hydro-electric schemes which could be constructed within five or six years.

194

8.24 In a speech made on 13 October 1982 and reported in the

Tasmanian press, the Commissioner of the HEC said that there

'was remaining hydro energy potential

scheme, the Anthony-Henty, the Albert in the King-Franklin Rapids, the Huon, the

Que-Hatfield-Leven, the Jane, the Upper Franklin, the Davey, the Upper Gordon, the Upper Arthur and the Upper Meander Schemes'

('The Advocate', 14 October 1982). However, he added that

'Investigations to date had largely been of a "preliminary"

nature' and 'it was not possible at this stage to be specific

about the proportion of this potential which would in future be economic to develop'.

8.25 Shortly before this the HEC had reported that it had

done preliminary planning for the 32 MW Anthony-Henty scheme.

8.26 Some of the hydro-electric schemes listed above fall

within the area nominated for the world Heritage List and plans for their construction would also be contentious.

8.27 Detailed cost estimates for small hydro-electric

schemes have not been published. However, any lack of economies of scale would probably be balanced by the flexibility they

allowed in Tasmania's energy supply programme.

8.28 The Committee believes that the construction of one or

more small hydro-electric schemes would not only enable a

decision on a major scheme to be deferred, but would also allow

the HEC to retain much of its permanent staff until new

arrangements could be made for them. The Commissioner of the HEC told the Committee that the Commission could plan the

restructuring of its workforce if it had more time to do so.

8.29 In

preliminary capable of

the meantime, the HEC

planning for a range of

different loads, lead

195

should be undertaking

major times and minor options and operational

characteristics. It would then be prepared to meet whatever

forecast eventuates with a minimum of lead time. These would

include other small hydro-electric schemes, smaller capacity coal-fired and, in particular, wood-fired thermal stations.

8.30 The Committee also believes that there is sufficient

evidence available to justify further wind power studies in

North West Tasmania and the construction and operation of one or two aerogenerators in the megawatt capacity range. These should be connected to the Tasmanian system to gain operational

experience from their use.

8.31 Another important part of a supply strategy should be

demand management.

8.32 In Chapter Four of this report, an overview of the main

assessments of potential energy conservation in Tasmania high­ lighted the wide divergence of opinion on the effectiveness of energy conservation in reducing demand for electricity. However, the extent to which it does is largely in the hands of the

Tasmanian Government and the HEC. An official concerted effort to give effect to a comprehensive energy conservation policy

will reduce demand for electricity. For such a policy to have

the greatest impact, it needs to include educational and

promotional components as well as regulations and incentives.

8. 33 Encouragement should also be given to the wider use of

solar power in Tasmanian houses and the installation of small

wind generators in rural areas. Although neither is likely to

have a marked effect on demand for electricity in the next 10 or

20 years, expansion of their use will help to reduce reliance on

the central electricity system. Technological advances in both these options are expected to make them better com me rcial

propositions in the future. There is also the potential for

employment in Tasmania if either is manufactured for local or

other markets.

196

8. 34 The implementation of demand management and the

encouragement of alternative sources of power are not regarded as substitutes for new power schemes. They are simply methods of reducing demand so that the construction of new generating

capacity can be deferred for as long as possible.

8.35 Another key element in the supply strategy would be a

systematic and sophisticated monitoring programme to discern changes in key demand trends. In addition, the HEC should

conduct regular surveys of Tasmanian industry and maintain close liaison with other departments and authorities so that an annual assessment of demand can be made, as is done by the New Zealand

energy authorities. It would also be of benefit to the Tasmanian Parliament, which is required to approve all new power schemes, to be informed regularly of updated demand forecasts.

8.36 Within a supply strategy which will enable the system

to be flexible in response to exigencies as well as ensure

continuity of supply, the Committee developed the following

proposals:

( i) the construction of one or more small

hydro-electric schemes which, apart from providing insurance against a shortfall in supply by a

sudden and unexpected increase in demand, would

alleviate some of the employment problems within the HEC if the Gordon-below-Franklin scheme were abandoned;

( ii) the planning of several different minor options

which then, if required, could be commenced

quickly;

(iii) further investigation into the feasibility of

thermal power and the detailed evaluation of

Tasmanian coal reserves;

197

(iv) further investigation into the feasibility of

interconnection with Victoria with regard to the provision of power for Tasmania, the exchange of

power between Tasmania and Victoria on an

opportunity basis and the sharing of reserve

facilities;

(v) active research and development of magneto hydro

dynamics, photovoltaics cells, aerogenerators and other forms of potential electricity generation;

(vi) the implementation of a comprehensive energy

management programme; and

(vii) the systematic monitoring of demand.

198

PART III

OTHER MATTERS

CHAPTER NINE

ARCHAEOLOGICAL SIGNIFICANCE OF THE

GORDON/FRANKLIN AREA

9.1 The archaeological significance of South West Tasmania,

and the Franklin River area in particular, i s an issue which

developed during the Committee's inquiry.

9.2 In Appendix V of the HEC's 1979 Report it was stated:

'In the project area, no aboriginal artifacts or sites have been f ound and all known sites

are limited to the coast. •l

The main Report contained only the following words under the

heading Archaeology and History:

'There are no known archaeological si t es or

other evidence of Aboriginal occupancy in the area. The only visible remains of European

operations are several old piners camps and a lime kiln. •2

Though archaeologists dispute accurate, there was nevertheless that little

these s tatements comment on the

were matter

for several years, the debate being concentrated on

environmental and economic issues.

9. 3 The discovery of Fraser Cave's archaeological contents

in 1981 brought the potential signif icance into foc us. It became a further reason advanced for the Franklin River not to be

f l ooded. It also emphasised the interest in the area claimed by

the Tasmanian Aboriginal community . The Tasmanian Aborig inal

199

Centre's representatives, in their evidence to the Committee, objected to the interference of archaeologists but insisted that the cave be preserved.

9.4 During

Tasmania, Fraser the Committee's Cave was visited. inspection of South West

A team led by Dr Rhys Jones

of the Department of Prehistory at the Australian National

University and Mr Don Ranson of the Tasmanian National Parks and Wildlife Servi c e was at that time conducting a thorough

examination of the site and exploring other parts of the river

area for further caves. The Committee was impressed with the

discovery and the work being done there, and was told of further

significant discoveries that had just been made.

9.5 Dr Rhys Jones later gave evidence to the Committee that

a test excavation in Fraser Cave revealed:

interleaved hearths, broken animal bones and stone tools and flakes at a density of

more than 100 000 pieces per cubic metre. •3

He said that carbon dating showed that the site was occupied

between 20 000 and 15 000 years ago, after which the last ice

age ended and the area was generally left unoccupied by humans. He attributed the following significance to Fraser Cave:

'Fraser Ca ve , Franklin, is unique in

Australia in that here is a large limestone

cave of easy access with a level floor in a

primary state of deposition. The deposit is

immensely rich in stone tool s and animal

bones; and dense hearths show that it was

used as a major camp site. The geomorphology

and preserved pollen can give primary

information as to past climatic conditions in a region of immense geographical

significance. Already from the minor excavation

carried out, Fras er Cave has yielded

than one hundred times the entire

artefacts recovered so far from all

200

work more stone othe r

Tasmanian ice age sites combined. Its rich

animal bone component gives an almost unique picture in Australia of the hunting

strategies of inland Aboriginal hunters

during the ice age. All of the bones so far

studied are of modern species, which leads to the important question of when and how did

the giant marsupials of Tasmania become

extinct, and what was man's role in this

process. With so little of the site

investigated, there will always be the

possibility of fossil human remains

eventually being found.

Clearly at this stage of discovery, only

tentative statements and claims can be made. However in a recent major article in

Canberra Times, January 3rd, 1982, Professor John Mulvaney of the ANU, having no personal connection with the discovery itself, has

said of it that:

"With over 25 years

Australia, I cannot

site excavated with this isolated place"

field experience in envisage a single

such potential as

(p. 7).

The significance of the site must be seen in

the context of the human colonisation of the

western rim of the Pacific. In western

Europe, modern man replaced Neanderthal man about 30-35 000 years ago. In the east, we

see the colonisation of Australia and New

Guinea across the water barriers of Asia some time before 40 000 years ago. At this time,

Bass Strait also existed and its waters

stemmed the southward movement of man. Then

with the onset of the main phase of the last

ice age the expanding ice sheets of the world

resulted in a lowering of the sea level until

about 23 000 years ago, the floor of Bass

Strait was exposed as a dry plain. That man

immediately took this opportunity to expand his range is shown by the near contemporary

basal date of Cave Bay Cave on Hunter Island

off northwest Tasmania. In southwest Tasmania, the inhabitants of

such sites as Fraser Cave, Franklin were then the most southerly human beings on earth.

They alone of our species were as close to

the great Antarctic ice sheet then only a

thousand kilometres further to the south. At

the same time in the northern hemisphere were

201

the Upper Palaeolithic hunters of France, as close to the northern ice sheet, and living

in tundra environmental conditions similar to those of southwestern Tasmania. The cave

paintings of Lascaux were still 6-8000 years in the future. It would take another 10 000

years for equivalent areas of South America

to be occupied by man. It is within such a

context that the cave site on the Franklin

assumes an international importance in our

global view of the geographical expansion of modern man. •4

'In Tasmania, since 1975, it has been illegal

knowingly to destroy a prehistoric Aboriginal site. It would indeed be sadly and

desperately ironic if the State itself were

to destroy probably the greatest monument to the very first Tasmanians in pursuit of the

same aims that the colonial instruments of

the British State, 150 years ago, destroyed

the last Tasmanians. •5

9.6 In answer to questions from the Committee6, Dr Jones

explained that there would be no chance of finding limestone

caves at a higher level than the water of the proposed dam. He

also opposed the idea that a 'salvage excavation' of the cave

would provide all the information that would ever be found,

because future methodological and t e chnological advances will allow more to be done that could not now be forecast. He said

that eleven caves of varying degrees of significance had now

been discovered and there was a lot of painstaking work which

had to be done in their assessment and that of any others which

have yet to be discovered.

9.7 Professor

Prehistory at the

John Mul vaney, also

Australian National

Committee that he was:

of the Department

University, told

disturbed by the cavalier treatment

received by the cultural h e ritage in this

massive report [of the HEC in 1979]. •7

202

of

the

He claimed that:

the archaeological/prehistoric significance of this region has been greatly understated in relation to hydro-electric

scheme impact. There is evidence here of high scientific and cultural value on a world

scale of rating; its intentional destruction would represent vandalism to the

international achaeological and scientific community. '8

Professor Mulvaney stated in his submission:

'As an archaeologist with 26 years field

experience within Australia, I consider that the degree of preservation, the range of

artefactual and biological remains and their correlation with environmental data, makes this site possibly the most important yet

excavated in Australia; its Pleistocene

antiquity adds a chronological dimension

lacking at many mainland sites.

There is no reason

the only site in

salvage operations such sites should

generations, when have improved. •9

to believe that this is

though data, future

the area.

could recover be conserved investigative

Even much for techniques

'The region promises to be a veri table

laboratory f o r research into the society of

early Homo sapiens, no less than the upper

Palaeolithic sites in the Vezere valley in

the French Dordogne, has proved for studies

of European cultural origins. Such sites

require preservation for research by future generations.•lO

9.8 Professor Mulvaney provided to the Committee copies of

letters sent to the Prime from more than 20 eminent

archaeologists from variou s parts of the world urging

preservation of the area.

203

9.9 Mulvaney emphasised that it would be catastrophic if

the caves were lost and maintained that 'it would be the

greatest desecration of archaeological sites in Australia that, for the Stone Age of the world, it is the equivalent of

destroying the Pyramids' .11 The Committee has not received any evidence to contradict this assertion. Obviously, the value of what has been described as 'a major new resource' has not

previously been taken into account.

9.10 The Committee accepts the evidence of its expert

witnesses that the flooding of Fraser Cave and the other caves

near the Franklin River would be disastrous. It believes that

Australia's world reputation would be badly tarnished if such significant discoveries were to be lost.

9.11 The Committee believes that, apart from any other

reasons for preserving the area the caves are of such importance that the Franklin River be not inundated.

204

CHAPTER TEN

FEDERAL GOVERNMENT CONSTITUTIONAL AND LEGAL INVOLVEMENT

10.1 inquire The Committee's reference includes an obligation to

into and report upon 'Federal responsibility in

assisting Tasmania to preserve its wilderness areas of national and international importance'.

10.2 An obligation to examine Federal responsibility

requires an assessment of the Commonwealth's constitutional and legal obligations and powers.

10.3 On a literal interpretation of the Committee's charter

it might be said that the Committee is limited to such Federal

responsibilities as will assist Tasmania in the preservation of such wilderness areas. If the Tasmanian Government determines that no such preservation should take place, it might be argued

that the Committee can consider the matter no further. However, within the spirit of the Senate resolution and in the light of

the wide range of submissions received, the Committee has

interpreted its terms of reference

literally. It has therefore considered liberally rather than

generally the extent of

the Commonwealth's legal obligations and powers in relation to wilderness areas of national and international importance in south West Tasmania.

10.4 The Committee has not commissioned legal opinion o n th e

subject but has received a number of submissions relating to it. Whilst it is inappropriate for the Committee to attempt to give

a legal determination, the Committee has however reviewed the

submiss ions received on the subject and believes certain

conclusions can reasonably be drawn.

205

10.5 The Committee became aware from press comments on 30

August 1982 of an opinion prepared by the

Department relating to the questions the

chapter.l The Committee sought of the Acting

Attorney-General's subject of this

Attorney-General a

copy of that opinion but the Acting Attorney-General indicated that in his view it would be more appropriate for the Committee

to obtain legal advice elsewhere.2 The Attorney-General further declined to permit his officers to appear before the Committee.3 The opinion under the name of Mr D.J. Rose was however

subsequently incorporated in the Hansard of the House of

Representatives on 19 October 1982 and a copy tabled before the Committee.4 The Committee has therefore taken into account the content of that opinion.

10.6 Submiss.ions on the subject conveniently fall into two

groups. First, it is argued by some that the Commonwealth

Government is presently legally obliged to act to preserve the

wilderness area, Secondly, others, who do not necessarily accept the first proposition, argue that the Commonwealth has power to act to preserve the said wilderness area if it determines to so

act. Opinions diverge as to whether, if the Commonwealth is of

such a mind, new

administratively legislation.

legislation is necessary or whether so act under the Constitution or

The Commonwealth's obligation to intervene

it can

existing

10.7 This argument has been pursued by such as 1-lr Murray

Wilcox, Q.C., President of the Australian Conservation

Foundation, who gave evidence before the CommitteeS and Mr

Stephen Lowe of the Tasmanian Wilderness Society.6 Briefly

stated, the argument is that Australia is obliged under th e

terms of the International Convention for the Protection of the world Cultural and Natural Heritage, r eferred to as the 'Worl d

Heritage Convention', to take legal measures to preserve certain areas of South West Tasmania.

206

10.8 The World Heritage Convention was adopted by the

General Conference of UNESCO on 16 November 1972. It was

ratified by Australia on 22 August 1974 (Australia thus becoming a 'State Party' to the Convention) and came into force on

17 November 1975.

10.9 The purpose of the Convention is to preserve that part

of the cultural and natural heritage of the world which is of

outstanding interest for the benefit of mankind as a whole.

Cultural heritage includes 'archaeological sites which are of outstanding universal value from historical, aesthetic,

ethnological or anthropological points of view'. Natural

heritage includes 'delineated natural areas of outstanding

universal value from the point of view of science, conservation or natural beauty'.

10.10 It is the obligation of each state Party to i dentify

and delineate the different properties situated on its

territories falling within the definition of cultural or natural heritage.

10.11 Article 11

establishment of a of

'World the Convention Heritage List'. provides f or the

It is the obligation

of each State Party to submit to the World Heritage Committee an inventory of property within its territory suitable for

inclusion in the said list. The World Heritage Committee

determines whether or not a particular property should be

included.

10.12 On 13 November 1981 the Commonwealth, acting on the

recommendation and with the approval of the Tasmanian

Government, officially nominated the Western Ta sm ania Wilderness National Park for inscription on the World Heritage List.

Consideration of that submission is likely to take place later

this year.

207

10.13

Article 4 of the Convention provides:

'Each State party to this Convention

recognises that the duty of ensuring the

identification, protection, conservation, presentation and transmission to future

generations of the cultural and natural

heritage referred to in Articles 1 and 2 and

situated on its territory, belongs primarily to that State. It will do all it can to this

end, to the utmost of its own resources and,

where appropriate, with any international

assistance and co-operation, in particular, financial, artistic, scientific and

technical, which it may be able to obtain.'

Thus it is the obligation of the State Party for the

purposes of the World Heritage Convention to identify the

cultural and natural heritage situated on its territory. This

Committee is of the view that Australia by its action identified portion of South West Tasmania as falling within the definition of natural heritage. The Committee has been advised that the

Australian Government has been now invited to consider whether it should amend its application to include also a claim of

cultural heritage in view of archaeological sites recently

discovered in the area.

10.14 Article 5 places certain obligations upon a State Party

for the 'protection, conservation and presentation of the

cultural and natural heritage situated on its territory'. One such obligation is to take the appropriate legal measures

necessary for the identification, protection and conservation, presentation and rehabilitation of the heritage.

10.15 It is argued that, by its submission Australia has

assumed an international duty under the terms of the Convention for conserving the heritage and taking appropriate legal action for such preservation. The Committee finds the argument

208

persuasive and has, in fact, received no argument to the

contrary. The Committee notes that the opinion of Mr Rose is to

the same effect.

10.16 The Committee presumes that some will argue that the

international obligation takes effect only upon acceptance of the property for the World Heritage List. The Committee has

noted, however, that in the opinion of Mr Rose the obligation is

incurred even before consideration for inscription. When the question was put to him, he stated 'the answer is clearly

"yes"'.7 The Convention obliges the State Party to identify

(Article 3) and imposes the duty of preservation (Article 4)

without mention of the World Heritage List.

10.17 Accepting that Australia has identified 'natural

heritage' and has an obliqation under Article 4 to preserve that heritage, the Committee has had to consider the operative

provision, that is, Article s. The Committee has noted that

Article 5 makes it clear that the obligation of a State is only

'insofar as possible' and 'as appropriate for each country'.

Furthermore, the Committee queries whether an obligation to take 'legal action' includes an obligation to legislate. The latter question might be of academic interest only if the Commonwealth has existing suitable legislation, which is a question

considered by the Committee hereunder. The phrase 'so far as is

possible' as far as it refers to legal limitations will be

considered in the following part of this chapter. The words 'and as appropriate for each country' do appear to the Committee to

introduce a potential limitation of some consequence. For

example, the Commonwealth may argue, that notwithstanding the obligation of the Convention, in this instance it is

inappropriate to act because of what it sees as the co-operative basis of Australian Federalism. This was touched upon in a

recent speech (9 September 1982) by the Minister for Home

Affairs and Environment who stated:

209

10.18

'While certain legal powers may be available to the Commonwealth in relation to South West Tasmania the existence of potential legal

power is not in itself a reason for

Commonwealth action on any particular issue. Consideration which affects the extent to

which the Commonwealth would wish to exercise its powers in relation to a particular issue, are often many and varied. In accord with the

Government's federalism policy, certain

responsibilities properly reside with the

State, or are addressed, by the Government

concerned, on a co-operative basis. r8

Without authoritative interpretation, the Committee can do no more than to raise the potential limitation of such words

to the argument that the Commonwealth is obliged to act.

Commonwealth Constitutional Powers

10.19 Those who support the argument that the Commonwealth is

obliged to legislate to protect areas of south west Tasmania

pursuant to its obligations under the World Heritage Convention then argue that the Commonwealth has the constitutional power to meets its obligation. Others, who do not accept the obligation

argument, nevertheless argue that the Commonwealth has power to act and preserve the area. Some have argued for new legislation

and pointed to specific heads of power. Others have argued that administrative action under existing legislation is available and adequate. Some have pointed to the fiscal powers of the

Commonwealth as enabling Commonwealth intervention. The

Committee finds it convenient to refer to the arguments under

such heads.

Commonwealth power to legislate

10.20 Submissions have accepted that the Commonwealth

Government does not generally have legislative power in respect of land use control, nevertheless, various heads of power under Section 51 of the Constitution have been drawn to the

210

Committee's attention as enabling legislation to preserve the wilderness which would then override any inconsistent

legislation of the State of Tasmania by virtue of Section 109 of the Constitution. Specific heads of power mentioned include:

(1) Section 51 (XXIX) - External Affairs Power

It is argued that the Commonwealth could by virtue of

the External Affairs power legislate to implement i n

Australia the World Heritage Convention and therefor e preserv e the areas of South West Tasmania identified by Australia under that Conv ention.

The popularity of this argument has increased since th e recent case of Koowarta v. Bjelke-Petersen and Others 56ALJR625. The High Court by a 4-3 maj ority held that

the Commonwealth's Racial Discrimination Ac t was a

valid exercise of the external o.ffai rs pow e r t o

implement in Australia the Inte rnational Convention on Elimination of all forms of Racial Discrimination.

The Committee acce pts that it may be argued that

matters concerning land usage are of a more dome stic

nature than racial discriminati o n. Also th e Co mmittee recognises that there have since be e n c hang e s in th e

compo s ition of the Hi gh Co urt. Ne ve rtheless th e

Committee found the argument, promoted by Wilco x ,

Q.c.9 and others, that the s ame principl e wou ld appl y

to implementation of the world Heritage Commissi o n t o be persuasive.

211

(2) Section 51 (XXVI) - Laws with Respect to Other Races

This head of power is argued to enable the Commonwealth to legislate to preserve Aboriginal relics and sacred sites. Thus the purpose of the Commonwealth legi s lation might be to preserve Aboriginal history (in view of the

significance of Fraser Cave).

(3) 51 (!) - Trade and Commerce

The power of the Commonwealth to make laws with respect to 'trade and commerce with other countries, and among the States' is argued by some to give power to the

Commonw ealth to protect South West Tasmania.

For example, it is argued that the power includes

interstate and overseas tourism and that this could be a basis for Commonw ealth l egislation to preserve th e

wilderness of South West Tasmania.

A further argument is to use th e trade and commerce

power in a similar way as in the case of Mur.[2h:ior es

PtJ' LtQ v, 1976 136 CLR which

effectively upheld the right of the Commonw e alth t o

pr event further sandmining on Fraser Island by refus ing permission to export the extracted min erals. In th e

ca se of South West Tasmani a , arguments are promoted

that it would be used to prohibit the import of certain

equipment necessary fo r dam building or to prohibit th e export from the area of products such as wood chips and

minerals.

212

(4) Section 51 lXIII) - The Banking Power

It is argued that the banking power could be u s ed to

support action under the Banking (Foreign Exchange)

Regulations in relation to overseas borrowing to

finance the proposed dam. With regard to

intra-Australia borrowing possibly use the trade and

for intervention.

the Commonwealth commerce power as a

could basis

(5) Section 51 lXX) - The Corporations Power

It is argued by some that the corporations power could

be used to restrict the activiti e s o f corporation s in

the region to be preserved and that indirectly this

could have the effect of preserving the said

wilderness. For example, companies could be restricted in the supply of material or services for activities

inconsistent with the retention of wilderne s s, f o r

example, dam construction projects.

(6) Section 51 lXXXIX) - The Incidental Power

10.21

The incidental submissions for powers.

power has been referred

its ability to stretch other

to in

specific

Apart from specific heads of pow e r under Secti o n 51 of

the Constitution, some submissions hav e also mad e reference t o what is referred to as the 'nati onal implied power', as a head

unde r which the Commonwealth could legislate. It is argued that this 'inherent' power to do all thing s f o r a

national gov ernment or a power 'i nherent in the fa c t of

nationh o od and of interna tional pe r so nality ' ( see Vict o ria y The Co mmonwealth (the MP case) 1975 134 CLR 3 35) would e nabl e the

Commonwealth to legi s late t o mee t it s na ti o na l respo n s i bility

unde r the Wo rld Heritage Conve nti o n.

21 3

10.22 The Committee has noted that the extent of the implied

power, by its very nature, remains somewhat undefined. Some have argued that the AAP case is authority that the power would need

to be used in a non-coercive way. Mr Rose in his opinion found

that he had insufficient time to consider the full scope of the

power in relation to Commonwealth action for directly protecting South West Tasmania.

10.23 A consideration of the national implied power

conveniently led the Committee to arguments that legislation currently exists under which the Commonwealth could act.

Powers under existing legislation

(1) National Parks and Wildlife Conservation Act 1975

In his opinion Hr Rose referred to Section 6 (1) of the

above Act which provides for the establishment of parks and reserves 'appropriate to be established by the

Commonwealth Government, having regard to its status as the National Government'. Mr Rose recognised that this provision, together with the .I&!lQs Acguisitions Act 1955, 'already provides the Commonwealth with relevant

statutory power'.

The Committee has also noted Section 69 of the Act

which empowers the Governor-General to make regulation s for and in relation to giving effect to various

specified agreements which include the World Heritage Convention. Thus the Commonwealth could regulate to protect the relevant area of South west Tasmania

pursuant to that provision and to give effect to th e

Convention without even the need for legislation.

214

(2) Australian Heritage Commission Act 1975

The South West Conservation Area has been (1980)

registered on the

provisions of the

submissions before Section 30 of the

National Estate pursuant to the

above Act. It has been argued in

the Committee that by virtue of

said Act, Commonwealth Government

authorisation of overseas borrowings by the HEC for

purposes that would adversely affect the relevant parts of South West Tasmania would first require the relevant minister or authority to be satisfied that no 'feasible and prudent alternative to the taking of that action'

is available.

(3) Environment Protection (Impact of Proposals) Act 1974

It is argued that the Australian Government is obliged by the above Act to fully examine and take into account

matters affecting the environment before assisting in the financing of the dam project in South west

Tasmania. This could be done by either th e preparation of an environmental impact statement under Section 6 or an inquiry instituted under Section 11.

10.24 Finally, there are arguments before the Committee that

the Commonwealth could use its fiscal powers to restrain

development conservation.

Fiscal powers

in South West Tasmania inconsistent with

10.25 Particularly mentioned in submissions i s Section 96 of

the Commonwealth Constitution which allows the Comrr.onv1ealth to 'grant financial assistance to any State on such t e r ms and

conditions as the Parliame nt thinks fit'. It is s ubmitted that

215

the Commonwealth could make grants to Tasmania incorporating conditions that effectively preserve the area the subject of

this inquiry.

10.26 The Committee has recognised also that the Commonwealth can exercise substantial control over borrowings by the States and the State authorities through the Loan Council. Within the limits of this inquiry, Commonwealth power may be more

restricted than previously in that in June 1982 the Commonwealth Government exempted for a three year trial period state

electricity authorities from the need to comply with Loan

Council requirements. The Commonwealth thus enabled such

authorities to borrow within Australia on the open market.

Conclusions

10.27 At the outset of this chapter the Committee recognised

that it has not sought legal advice on the matters herein

discussed which are really incidental to the principal questions it has been charged to consider. Furthermore, the

Attorney-General has declined to give it advice. With those

shortcomings the Committee nevertheless believes that certain conclusions can reasonably be drawn from the submissions it has before it.

10.28 First, the argument that the Commonwealth is obliged to

act to preserve the territory in Tasmania it has submitted for

listing in the World Heritage List pursuant to the provisions of the world Heritage Convention appears strong. As noted above it is supported not only by the 'environmentalist lobby' but also by Nr Rose of the Attorney-General's Department. The

Committee's only reservation is the phrase 'as appropriate for each country' as applicable to the co-operative federalism

argument.

216

10.29 Given, however, that the Commonwealth is obliged to

act, it appears clear to the Committee that it can so act by

regulation under Section 69 of the National Parks and Wildlife Conservation Act 1975.

10.30 It appears to the Committee that the Commonwealth

Government is likely in any event to have adequate power to

legislate to conserve the said area by a propitious use of a

combination of the External Affairs power, the Other Races

power, the Trade and Commerce power, the Incidental power and

the National Implied power.

10.31 Even stronger it appears to the Committee that the

Commonwealth could by a combination of the National Parks and

Wildlife Conservation Act and the Land Acguisition Act 1955

acquire the relevant area, proclaim it to be a national park and

make the relevant declarations to reserve a portion as a

wilderness zone.

10.32 The Committee is not so impressed with the arguments

for use of fiscal power. For example, Section 96 of the

Constitution proved ineffective in relation to Lake Pedder by the State simply refusing to accept funds with a reservation.

Use of the Loan Council powers appears also to the Committee to

be fraught with difficulty and the Committee has in any event

noted the exclusion of electricity authorities agreed earlier this year.

10.33 Arguments for use of the Environmental Protection

(Impact of Proposals) Act and the Australian Heritage Commission Ad also appear somewhat peripheral. Al so , the calling for an

environmental impact statement or an inquiry into environmental aspects does not in itself preserve the wilderness area. In th e

case of the Australian Heritage Commission Act, the same

consideration applies. That Act really inv ites the Minister t o look to feasible alternatives or, in other words, invites a

217

further inquiry into questions of supply and demand and

alternative sources of power in Tasmania. It is not appropriate to use if the Commonwealth has decided that it ha s the

obligation or is of a mind to preserve the area.

10.34 In conclusion, the Committee is therefore of the view

that the Commonwealth may well be obliged to act to pres erve the area and has a considerable number of powers and options open to it to enable it to meet that responsibility.

218

PART IV

CONCLUSIONS

CHAPTER ELEVEN

CONCLUSIONS

11.1 The Committee has concentrated its attention up to this

time on examining demand for power in Tasmania and in forming a

supply strategy for meeting that demand.

11.2 The demand studies available to the Committee, based on

various methodologies, contain a wide divergence of demand

projections. There is not even unanimity of opinion among

government studies nor among conservationist studies.

11.3 The Committee's consultant, McLachlan Group

prepared a forecast of demand which took account of

and low growths of demand. The forecast provided

Pty Ltd,

both high a demand

projection within a band, the upper and lower limits of which

increased the further into the future it went. The forecast also included a probability of one in four that demand would fall

outside the forecast band.

11.4 For the purpose of its conclusions, the Comrr,ittee has

adopted the McLachlan Group forecast of demand.

11.5 The HEC projection fell just outside the upper limit of

the McLachlan Group band in 1990 and 1995 but was well within

the band in 2000. The HEC's lower limit fell within the band in

all three years. A comparison of the HEC's and McLachlan Group's forecasts is contained in Table 4.9.

11.6 If the lower limit of the McLachlan forecast

band were achieved, little or no additional capacity would be

needed this century. On the other hand, shoulci the upper lir:-its

219

be attained, the potential hydro-electric capacity remaining in Tasmania would be insufficient to meet that demand. It is likely that demand will actually be somewhere within the two extremes but, if a high growth in demand eventuates, a major new

generating facility would need to be operational in the mid

1990s.

11.7 The Committee concludes that construction of a major

option (the Gordon-below-Franklin scheme, a thermal station or interconnection with Victoria) does not have to be commenced for at least three years, while still allowing the upper limit of

the forecast of demand to be met.

11.8 However, consistent with the projection, a major option

may need to be commenced at some stage after three years. The

Committee examined the financial feasibility and economic

implications of the three major options.

11.9 To determine the comparative unit costs of energy from

each option, McLachlan Group undertook a discounted cash flow analysis of the construction and operational costs of each

option over a period of 60 years. From the results of this

analysis the Committee concluded that the unit cost of

electricity from each option varied significantly according to the values chosen for several critical parameters, level of

utilisation, interest rate, discount rate, fuel cost and fuel

price escalation rate. As there appeared to be no consensus

either in submissions to the Committee or from other sources as to the most appropriate value for each of these parameters, the

Committee concluded that it was impossible to determine an

absolute unit cost for any option.

11.10 The economic implications of each of the major options

were also examined and it was concluded that there are benefits and disadvantages associated with each option. Further detailed investigation would thus be required to determine which was the optimal economic option.

220

11.11 The Committee decided that a supply strategy which

would respond quickly to exigencies supply while minimising the risk of but ensure continuity of

having substantial capital

tied up in unused generating facilities, is required.

11.12 To commence construction of a major option at this time

would be inconsistent with that supply strategy.

11.13 Within the supply strategy, which is based on a

flexible approach, the Committee has developed the following proposals:

(i) the construction of one or more small hydro-electric

schemes which, apart from providing insurance against a shortfall in supply by a sudden and unexpected increase in demand, would alleviate some of the employment

problems within the HEC if the Gordon-below-Franklin scheme were abandoned;

(ii) the planning of several different minor options which

then, if required, could be commenced quickly;

(iii)

(iv)

further investigation into the feasibility of thermal power and the detailed evaluation of Tasmanian coal

reserves;

further investigation ir.to the feasibility of

interconnection with Victoria with regard to the

provision of power for Tasmania, the exchange of power

between Tasmania and Victoria on an opportunity basis and the sharing of reserve capacity;

( v) active research and development of magneto hydro

dynamics, photovoltaic cells, aerogenerators and other forms of potential electricity generation;

221

(vi) the implementation of a comprehensive energy management programme; and

(vii) the systematic monitoring of demand.

11.14 Although this report deals mainly with demand for power

in Tasmania and a supply strategy to meet that demand, the

Committee decided to include in its consideration two additional topics which emerged during the course of the inquiry.

11.15 The Committee heard evidence from Australian

archaeologists and received copies of letters forwarded to the Prime Minister from eminent international archaeologists on the significance of the archaeological discoveries in an area near the Franklin River which would be inundated by the proposed

Gordon-below-Franklin scheme.

11.16 The Committee accepts the views of these experts that

the archaeological discoveries near the Franklin River are of such international importance that they should not be inundated.

11.17 Although the Committee has to complete its examination

of the natural values of South West Tasmania and the impact of

various land uses on the area, yet attention must be drawn to

the overwhelming amount of information contained in many written submissions, studies and reports about the area and which

confirm its national and international significance, consistent with the nomination of the area for the World Heritage List.

11.18 In view of this nomination of the Western Tasmanian

Wilderness National Parks for addition to the world Heritage

List, there has been wide public debate on the Commonwealth's

powers and obligations as a signatory to the UNESCO Convention for the Protection of the World Cultural and Natural Heritage.

222

Although the Committee did not receive independent legal opinion on the matter, it did receive a number of relevant submissions.

It also had available to it an opinion prepared by Mr D.J. Rose

of the Attorney-General's Department which was incorporated in the House of Representatives Hansard on 19 October 1982. On the evidence before it, the Committee believes that certain

conclusions can reasonably be drawn and no contrary evidence has been given to the Committee. The Commonwealth may well be

obliged to act to preserve the area and has a considerable

number of powers and options open to it to enable it to meet

that responsibility.

11.19 The nomination of the Western Tasmanian Wilderness

National Parks for listing on the World Heritage List was not

central to the areas of this inquiry on which this report

concentrates or the evidence the Committee primarily called. However, the Committee must say that nothing has emerged from

the inquiry which should persuade the Commonwealth Government from proceeding with the listing which invol ves the Gov e rnment in fulfilling its obligations and responsibilities under the

provisions of the UNESCO Convention for the Protection of the

World Cultural and Natural Heritage.

223

DISSENTING REPORT

DISSENTING REPORT BY SENATOR BRIAN ARCHER

After giving the report careful and detailed

consideration I have concluded I cann o t agree that, in its

present form, the report represent s a balanced assessment of the evidence presented to the Committee, Consequently, I must

dissent from some of the Committee's findi ngs and I find myself

bound to present to the Senate a minority report.

It has been a major concern to me that ther e has been

what I see as a lack of discrimination in the use and acceptance

of information by the Committee. I have specific objections t o

the report's handling of the evidence and its r esultant findings on the crucial questions of the supply of and demand f or pow er

in Tasmania, in spite of the fact that the HEC projection wa s

within the band as suggested by the consultants.

On the question of demand it is agreed, I believe , th a t

another substantive supply source will be needed within the next 10 to 20 years. The Tasmanian Gover nment, and its pr edecE: ssor,

accepted the r esponsibility to mee t that demand. The r eport has

chosen to accept th e projections vl hi ch are set loviE:r than t hat

of the Hydro-Electric Commission's, predominantly a s a result of reliance on the present depressed econorr:i c condi t i ons cu rrer.tly facing Australia. It se ems t o me t o be particularly impr ude nt t o

base long-term planning for power on short term econom1 c

I r ega rd the Hy dro- Electr ic Cor.. ;;-ission rjro jecticn of

1.5 per cent per annum for industri al demand as te ing

based . In fact, s e veral witnes ses i r. t he i r.ac;st ri al ar E:il

criti c ised the Hydr o-Electric Cor.rrission projection for tei ng too low.

22S

This difference of opinion on electricity demand is

fundamental to the whole issue, and the remainder of the report

is greatly affected by the conclusions in this area. I would

prefer to support those who have successfully planned for

Tasmania's power needs over the past 40 years, providing the

most reliable and economic source of power in Australia. I am

satisfied that the HEC projection of demand is appropriate, as was every other industry, industry organisation and Tasmanian government department with whom the matter was discussed.

The Tasmanian Government, as with any other State

Government, has the responsibility, subject of course to

electoral constraints, to consider, plan and make decisions

regarding the provision of power. The power industry itself is a major industry in Tasmania with direct effects on employment and industry growth in the State. The importance of this industry

has been understated as has the importance of the supply of

highly competitively priced power to any future industrial

progress in Tasmania.

Generally speaking, I concur with the report's

discussion of the various supply options available for

consideration and the conclusion that only three potentially viable major alternatives exist: hydro, thermal and the Bass

Strait cable.

However, I differ strongly with the report's

interpretation of the McLachlan Group's report, and also find difficulty with some of the conclusions of that report itself.

I am particularly concerned at the Group's assessment

of the Bass Strait cable link. Suffice to say that the Group's

conclusions on the comparative economies of the cable including

226

the end unit cost, the assumed output and related generated

employment, run counter to the available advice provided by the Zeidler Committee and expert professional individual witnesses without any adequate coverage of the unstated issues.

I find the Committee's conclusion that a major new

scheme will not be needed for at least another three years to

lack the optimism needed in Tasmania at the moment. I consider

the supply strategy to have been given insufficient

consideration, particularly in regard to the economic aspects of the minor options proposed. I do not believe that proven

long-term development planning should be abandoned in favour of stop-gap, short-term actions. The Committee has adopted an

approach which is designed to give maximum flexibility to

electricity planning in Tasmania but the economic and social

costs of this approach have barely been considered.

I believe that the Hydro-Electric Commission has

investigated all options for the supply of electricity, and that there is no adequate reas on to questi on its conclusion, which

has been verified by many expert witnesses before our Committee, that the Gordon-below-Franklin Scheme is the most economi c power development for Tasmania. I believe that the Committee has not

established th a t this i s not the case.

I consider

Tasmania's economic that insuffici en t regard has been development or to the long-term

given damage to

to

the Tasmanian economy of not proceeding wi t b power development scheme. I therefore do

paragraphs ll. 7, conclusions. 11.8, ll.ll,

227

11.12 and

a substantial new not agree with

11.1 3 of the

I have not canvassed in full the difficulties I have

with the Committee's report. However, as I have said the

substance of the report as it stands leaves me no alternative

but to dissent from several of its conclusions. In my opinion

the report reflects a negative view, and does not attend to the

issues of the reference adequately.

SENATOR B.R. ARCHER

228

REFERENCES

Chapter One

l. HEC 1979 Report, p. 91.

2. South West Advisory Committee, Report August 1978, Appendix 'A', p. 61.

3. ibid., p. 8.

Chapter Two

l. Report of the Commission of Inquiry into Transport to and

from Tasmania, 1976, pp. 148-9. 2. Evidence, p. 2497.

3. Evidence, p. 1112.

4. Evidence, p. 2491.

5. Evidence, p. 2493.

6. Evidence, p. 2499.

7. Evidence, p. 2501.

8. Report of the Inquiry into the Structure of Industry and

the Employment Situation in Tasmania, 1977, p. 117. 9. Evidence, pp. 2540-8.

10. HEC 1979 Report, Appendix II, p. 17.

ll. ibid., p. 17.

12. Evidence, p. 2524.

13. Report of the Directorate of Energy to the Co-ordination Committee on Future Power Development, May 1980, p. 193. 14. ibid., p. 199.

15. Evidence, p. 2525.

Chapter Three

1. HEC 1979 Report, Appendix I, p. 4.

2. ibid., p. 3.

3. ibid., p. 12.

4. ibid., p. 19.

5. ibid., pp. 19-20.

6. HEC Annual Review 1981-82, p. 2.

7. ibid., p. 4.

8. ibid., p. 4.

9. HEC 1979 Report, Appendix I, p. 19.

10. HEC Annual Review 1980-81, p. l.

11. HEC 1979 Report, Appendix I, p. 18.

12. HEC 1979 Report, Appendix II, p. 3.

13. Evidence, p. 157.

Chapter Four

l. HEC 1979 Report, Appendix II, p. 31.

2. Ev idence, p. 3297.

229

3. Evidence, p. 3226.

4. HEC, Gordon-below-Franklin Hydro-Electric Scheme -Financial Analysis, March 1982, p. (ii). 5. Evidence, p. 3250.

6. HEC 1979 Report, Appendix II, pp. 33 and 35.

7. Evidence, p. 3287.

8. Evidence, p. 3286.

9. Report of the Directorate of Energy to the Co-ordination

Committee on Future Power Development, Nay 1980, p. 227. 10. Evidence, p. 2748.

11. NcLachlan Group Report dated 9 June 1982. 12. HEC 1979 Report, Appendix II, p. 7.

l3. Evidence, pp. 161.

14. HEC 1979 Report, Appendix II, p. 14.

15. Evidence, p. 173.

16. HEC 1979 Report, Appendix II, p. 14.

17. Evidence, pp. 1534-1535. 18. Evidence, p. 162.

19. ibid.

20. ibid.

21. ibid.

22. Evidence, pp. 2979-2980.

23. Evidence, p. 161.

24. HEC 1979 Report, Appendix II, pp. 9-30.

25. ibid., p. 15.

26. ibid.

27. ibid., p. 10.

28. ibid., p. 20.

29. Evidence, p. 3258.

30. HEC 1979 Report, Appendix II, p. 22.

31. ibid., p. 30.

32. ibid., p. 38.

33. Evidence, p. 2979.

34. Evidence, p. 2980.

35. ibid.

36. Hydro Electric Commission, Tasmania Annual Review, 1980-81, p. 17. 37. Evidence, p. 2173.

38. ibid.

39. Hydro Electric Commission, Tasmania, Annual Review, 1981-82, p. 17. 40. Evidence, pp. 2161-2177. 41. Evidence, pp. 2169-2172.

42. Evidence, pp. 1532-1543.

43. Evidence, pp. 1534-1536. 44. Evidence, p. 1543.

45. Evidence, pp. 152-173.

46. Evidence, p. 164.

47. Evidence, p. 165.

48. Evidence, p. 163.

49. Report of the Directorate of Energy to the Co-ordination Committee on Future Power Development, Nay 1980, p. 190. so. ibid., p. 192.

51. ibid., p. 3.

230

52. Harwood, C.E. and Hartley, M.J. 1980, An Energy Efficient Future for Tasmania, Tasmanian Conservation Trust. 53. ibid., p. 38.

54. McLachlan Group Report on Demand. 55. Evidence, p. 2556-2557.

56. Thompson, P. 1981, Power in Tasmania, p. 118.

57. Evidence, pp. 2557-2558. 58. Evidence, p. 2558.

59. Evidence, p. 2562.

60. Evidence, p. 2563.

61. ibid.

62. Evidence, p. 2860.

63. Evidence, p. 780.

64. Evidence, pp. 2569 and

65. Evidence, pp. 2560-2569. 66. Evidence, p. 2568.

67. Evidence, p. 2564.

68. Evidence, p. 2994.

69. ibid.

70. Evidence, pp. 2993-2994. 71. Evidence, pp. 1527, 2186.

72. Evidence, p. 2992.

73. Evidence, p. 2860.

74. Evidence, p. 995.

75. Australian Newsprint Mills Limited, letter 3 March 1982, p. 8.

76. Australian Newsprint Mills Limited, letter 2 May 1979 to the Hon, K.E. Newman, M.P. 77. Evidence, p. 2991.

78. Evidence, p. 2558.

79. Evidence, pp. 630, 781, 1205, 2188, 1526.

80. Evidence, pp. 782, 1528, 2187.

81. Evidence, p. 2186.

82. Energy Policy Statement, Government of Tasmania, April 1982, p. 26.

83. Media Release, Premier of Tasmania, Hobart, 10 August 1982, Energy Conservation. 84. HEC 1979 Report, Appendix II, p. 22.

85. Evidence, p. 2989.

86. Evidence, p. 2990.

87. Harwood and Hartley, op cit.

88. ibid., pp. Sl-52.

89. Directorate of Energy, op cit, p. 158.

90. ibid., p. 219.

91 . Evidence, p. 8 4 5 .

92. Evidence, p. 112.

93. Evidence, pp. 643-647.

94. Evidence, p. 647.

95. Evidence, p. 2533.

96. Evidence, p. 2556.

97. Evidence, p. 647.

98. Evidence, p. 1549.

99. Evidence, p. 647.

231

100. Harwood and Hartley, op cit, pp. 53-55.

101. Evidence, p. 109, 778, 782, 1198, 1528, 1548, 2022.

102. Energy Policy Statement, op cit. 103. Media Release, Premier of Tasmania, Hobart, 10 August 1982, Energy Conservation. 104. Harwood and Hartley, op. cit, p. 51.

Chapter Five

1. Evidence, pp. 2017-2144, pp. 1933-1998 and pp. 3337-3395. 2. HEC 1979 Report, p. 23 and Appendix III, pp. 3-4.

3. Evidence, pp. 2017-2144, pp. 1933-1998 and pp. 3337-3395. 4. Evidence, pp. 895-904.

Chapter Six

1. HEC 1979 Report, p. 25.

2. HEC 1979 Report, Appendix IV.

3. Evidence, p. 889.

4. HEC Financial March 1982, p. 4.

5. Examiner. 4, 11, 12 August 1982; Mercury, 4, 10, 11 August

1982; Advocate, 4, 10, 11 August 1982; Australian 16 August 1982. 6. Examiner, 12 August 1982.

7. Evidence, pp. 3023-3024.

8, HEC 1979 Report, Appendix IV, p. 9.

9, HEC Annual Review, 1980-81, p. 10.

10. Canberra Times, 21 August 1982; Examiner, 24 August 1982. 11. Evidence, pp. 2322-2323. 12. ibid.

13. Bandler, M. 1982, Water and Energy Resources in South East

Queensland, Search Vol.l3, No.S-6, pp. 127-131. 14. Evidence, pp. 2311-2312. 15. HEC 1979 Report, p. 27.

16. Examiner, 30 June 1982

17. HEC 1979 Report, p. 43.

18. ibid., p. 44.

19. Evidence, p. 912.

20. Evidence, p. 1669.

21. Evidence, p. 1670.

22. HEC 1979 Report, Appendix III, pp. 35-36.

23 . HEC Financial Analysis, March 1982, Table 1, p. 20.

24. ibi d., p. 16.

25. HEC 1979 Report, Appendix III, p. 17.

26. Evidence, pp. 2319 , 2405, 2782.

27. Evidence, pp. 2319, 240 2 .

28. Evidence, p. 2319.

29. HEC 1979 Report , Appendix III, pp . 28 and 26.

30. HEC Financial Analysis, March 19 82 , p. 2.

31. Evidence, p. 313.

32. Cameron, Preece Internati onal A Review of the Financial Implications of the Gordon River Power Development (Stage 2J, p. 6-3.

232

33. HEC 1979 Report, Appendix III, p. 38.

34. HEC Financial Analysis, March 1982, p. 2.

35. Evidence, p. 2342.

36. Cameron, Preece International, p. 6-2. 37. HEC 1979 Report, Appendix III, p. 65.

38. ibid.

39. ibid., p. 67.

40. ibid., p. 69.

41. Evidence, p. 2188.

42. Evidence, p. 3591.

43. HEC 1979 Report, Appendix III, p. 67.

44. Evidence, pp. 1833-1932. 45. Evidence, p. 1883.

46. Evidence, p. 1836.

47. HEC 1979 Report, Appendix III, p. 45.

48. Committee of Inquiry into Electricity Generation and the Sharing of Power Resources in South-East Australia, Vol. l, p. 57.

49. HEC 1979 Report, Appendix III, p. 47.

so. ibid., p. 48.

51. ibid., p. 48.

52. ibid., p. 51.

53. Committee of Inquiry into Electricity Generation and the Sharing of Power Resources in South-East Australia, Vol. 1, p. 45.

54. Evidence, pp. 1316-1366. 55. Evidence, p. 1321.

56. HEC 1979 Report, Appendix III, pp. 53-54.

57. ibid., p. 54.

58. HEC 1979 Report, p. 33.

59. Evidence, p. 2020.

60. Evidence, pp. 2026-7.

61. Evidence, pp. 2026-2033.

62. Evidence, p. 2105.

63. Evidence, p. 2026.

64. Evidence, pp. 2046-7.

65. Evidence, p. 2033.

66. Evidence, p. 2035.

67. HEC 1979 Report, Appendix III, pp. 71-84.

68. Evidence, p. 3337.

69. Evidence, pp. 3381 and 1937.

70. Evidence, p. 1937.

71. Evidence, p. 1941.

Chapter Seven

1. McLachlan Group Report on Supply, 24 August 1982.

2. Evidence, pp. 3111-3112.

3. HEC 1979 Report, p. 84.

4. Evidence, p. 3036.

5. Evidence, p. 2581.

6. McLachlan Group Report on Supply, 24 August 1982.

7. Evidence, p. 3036.

23 3

8. Evidence, p. 2019.

9. Evidence, p. 2113.

10. Evidence, p. 2109.

11. Evidence, p. 3406.

12. McLachlan Group Report on Supply, 24 August 1982. 13. HEC 1979 Report, p. 37.

14. HEC March 1982, Financial Analysis, Table 1. 15. Evidence, pp. 3404.

16. Evidence, p. 3401-2.

17. Cameron, Preece International Review, Summary. 18. Evidence, pp. 2196-7.

19. Evidence, p. 2203.

20. Evidence, p. 452.

21. Evidence, p. 455.

22. Evidence, pp. 413-424.

23. Evidence, p. 2110.

24. Evidence, p. 2111.

25. Evidence, p. 2019.

26. Evidence, p. 3400.

27. Evidence, pp. 3398-3414. 28. Evidence, pp. 38, 147, 311, 353, 358, 437, 829-830, 2288.

29. McLachlan Group Report on Supply, 24 August 1982. 30. Evidence, p. 318.

31. Evidence, p. 1787.

32. ibid.

33. Evidence, pp. 39-40, 130, 216, 226, 295, 299-310, 316,

388, 1787, 1830. 34. Evidence, p. 3614.

35. Ev idence, pp. 3614-3615. 36. Evidence, p. 366.

37. Evidence, p. 2586.

38. HEC 1979 Report, p. 66.

39. HEC March 1982, Financial Analysis, Tables 2 and 3.

40. HEC 1979 Report, p. 68.

41. Evidence, p. 3053.

42. Evidence, p. 3054.

43. HEC 1979 Report, p. 67.

44. ibid.

45. HEC March 1982, Financial Analysis. p. 16.

46. Evidence, p. 776.

47. Evidence, p. 778.

48. Ev idence, p. 1788-1789.

49. Ev idence, p. 2021.

SO. Evidence, p. 2084.

51. Evidence, p. 3590.

52. Evidence, p. 3606.

53. Australian Bureau of Statistics Publications, Un employment, Australia, September 1982 Preliminary Estimates, Catalog No. 6201.0.

Chapter Nine

1. HEC 1979 Report, Appendix V, p. 223.

2. HEC 1979 Report, p. 57.

234

3. Evidence, p. 1726.

4. Evidence, pp. 1727-1728.

5. Evidence, p. 1730.

6. Evidence, pp. 1743, 1748-1749, 1759.

7. Evidence, p. 3455.

8. Evidence, p. 3455.

9. Evidence, p. 3458.

10. Evidence, p. 3459.

11. Evidence, p. 3498.

Chapter Ten

1. The Age, 30 August 1982.

2. Letter from the Acting Attorney-General, 11 October 1982. 3. Letter from the Acting Attorney-General, 14 October 1982. 4. Evidence, pp. 3738-3740.

5. Evidence, pp. 3730-3736.

6. Letter from Mr Stephen Lowe, Tasmanian Wilderness Society, Hobart Branch, 6 September 1982. 7. Evidence, p. 3739.

8. Speech given by the Minister for Home Affairs and

Environment at a public meeting on south West Tasmania, Canberra, 9 September 1982, p. 3. 9. Evidence, pp. 3734-3735.

235

APPENDIX I

RESOLUTIONS OF THE SENATE RELATING TO THE COMMITTEE

23 September 1981

(1)

(2)

That a Select Committee, to be known

Committee on South West Tasmania, be

inquire into and report upon -as the Select

appointed to

(a) the natural values of South West Tasmania to

Australia and the world;

(b)

That

(a)

(b)

(c)

Federal responsibility in assisting Tasmania to preserve its wilderness areas of national and

international importance, including appropriate financial assistance consistent with the State's development needs and options for the State's

energy requirements.

the Committee consist of six Senators, as follows:

three to be nominated by the Leader of th e

Governme nt in the Sena te;

two to be nominated by the Leader of the

Opposition in the senate; and

one to be nominated by the Leader of the

Australian Democ rats.

(3) That the Committee proceed to the dispatch of business

notwithstanding that all members have not been duly

nominated and appointed and notwithstanding any

vacancy.

(4) That the Chairman of th e Committee be appointed by and

from the members of the Comm ittee .

(5) That the Chairman of th e Committee may , from time t o

time, appoint another member of the Committee to be the Deputy-Chairman of the Committee, and that the rr:ember so appointed act as Chairman of the Committee at any

time when there is no Cha irma n o r the Chairman is not

present at a meeting of the Committee.

(6) That, in the event of an equality of

Chairman, or the Deputy-Chairman when

Chairman, have a casting vote .

237

voting , acting the as

(7)

( 8)

( 9)

(10)

That three members of the Committee be necessary to

constitute a meeting of the Committee for the exercise of its powers.

That the Committee and any sub-committee have power to send for and examine persons, papers and records, to

move from place to place, to sit in public or in

private, notwithstanding any prorogation of the

Parliament or dissolution of the House of

Representatives, and have leave to report from time to time its proceedings and the evidence taken and such

interim recommendations it may deem fit.

That the Committee have power to appoint sub-committees consisting of three or more of its members, and to

refer to any such sub-committee any of the matters

which the Committee is empowered to consider, and that the quorum of a sub-committee be a majority of th e

Senators appointed to the sub-committee.

That the Committee be provided with all neces sary

staff, facilities and resources and be empow e red to

appoint persons with specialist knowledge for the

purposes of the Committee with the approval of the

President.

( 11) That the Committee be empowered to print from day to

day suc h papers and evidence as may be ordered by it,

and a daily Hansard be published of s uch proceedings a s take place in public.

(12) That, except

decides, its

public.

where the Committee by vote

hearings of evidence be open

otherwise to the

(13) That the Committee report to the Senate by the first

sitting day in 1982. (14)

(15)

That, if the Senate be not sitting when the Committee

has completed its report, the Committee may send its

report to the President of the Senate or, if the

President is not available, to the Deputy-President, who is authorised to give directions for its printing

and circulation and, in such event, the President or

Deputy-President shall lay the report upon the Table at the next sitting of the Senate.

That the foregoing provisions of this Resoluti on, so

far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in th e Standing Orde rs.

238

24 September 1981

Select Committees - Appointment of Members:

That the Senators indicated, having been duly nominated in

accordance with the provisions of the Resolutions passed on 23 September 1981 be appointed members of the re s pective

committees as follows:

South West Tasmania:

- Senators Archer, Hill, Missen and Siddons

14 October 1981

That Senators Primmer and Coates, having been duly nominated in accordance with the provisions of the Resolution passed on 23

September 1981, be appointed members of the Select Committee on South West Tasmania.

27 October 1981

attendance on Senator Chipp, the Resolution member of that

That Senator Siddons be discharged from further the Select Committee on South West Tasmania and having been duly nominated in accordance with

passed on 23 September 1981, be appointed a

Committee.

29 October 1981

That paragraph 13 of the Resolution of the

September 1981 establishing the Select Committee Tasmania be varied t o read as follows:

Senate of 23

on South West

That the Committee report to the Senate as soon as possible.

27 May 1982

( 1) That, if the Senate be

Committee on South West

first progress repor t -not sitting v1 hen the Select

Tasmania has completed its

(a) The Committee may send

of the Senate, or, if

act du e to illness

Deputy-President;

239

the Report to the Presioent the President is unable to

or other cause, to the

( 2)

(b) the Report shall be deemed to have been presented

to the Senate and the President or the

Deputy-President is authorised to give directions for its printing and circulation; and

(c) in such event, the President

Deputy-President shall lay the Report Table at the next sitting of the Senate.

or

upon the the

That the foregoing provisions of this Resolution,

insofar as they are inconsistent with the Standing

Orders, have effect notwithstanding anything contained in the Standing orders.'

10 November 1982

That so much of the Standing Orders be suspended as would

prevent such Senators as are members of the Select

Committee on South west Tasmania attending meetings of the Committee for the remainder of this period of sittings.

240

APPENDIX II

LIST OF WITNESSES WHO APPEARED BEFORE THE COMMITTEE

Allsopp, Mr L.B., General Manager, Smelting Operations, Comalco (Bell Bay) Ltd., George Town, Tasmania Amos, Dr J.J., Minister for Energy, Governme nt of Tasmania, Hobart Ashdown, Mr N.C., Director of Industrial De velopment, Hobart,

Tasmania Ashton, Mr J.R., Commissioner, Hydro-Electric Commission, Hobart, Tasmania Bamford, Mr J.H., Managing Director, Baldwin Transformers (Tas)

Pty.Ltd., Hobart, Tasmania Balcombe, MrS., Senior Research Officer, Energy Policy Unit, Premier's Departme nt, Hobart, Tasmania Barker, Mr R.D., General Mana ge r, Eletrolytic Zinc Company of

Australasia Limited, Hobart, Tasmani a Berglin, Mr C.I., Manager, Manganese Development, The Broken 3ill Proprietary Company Limited, Melbo urne, Victoria Blakers, Mr A., Randwick, New South Wales Brown, Dr R.J., Director, Tasmani an Wi lderness Society, Hoba rt,

Tasmania Brown, Miss K.E., Administrative secretary, Tasmanian Ab orig inal Centre, Glebe, Tasmania Burdon, Mr A.R., Principal Executive Officer, Electricity

Section, Department of National Development & Energy, Canberra Burmester, Convenor, Tasmani an Wilder ness Society, Canberra, Australian Capital Territory Burton, Professor J.R., Armidale, New South Wa l es

Carington Smith, Mr O.F., Development Officer, Department of Industrial Development, Hobart, Tasmania Coleman, Mr H.E., Sydney Speleological So ciety , Sydney , New South Wales

Diesendorf, Dr M. Pr esi6ent-elect , Australasian Wind Energy Associati on , Canbe rra, Australi an Capi tal Ter rit ory Donnelly, Dr W. Centre for Resource a nd En v ironmental Studi es, Australian National Un i versi t y , Canberra, Australian Capital

Ter ritory Douglas, Mr D. W., Associate Commissioner, Snowy Hydro-Electric Authority, Coom a , New Sou th Wales Eshuys, Mr E., Exploration Manager, V1ctor &

Resources, Ltd., Melbourne, Victor ia Eve r e tt, Mr K.J., Kingston, Tasmani& Evers, Mr N.C.K., Se cretary, Premier's De partmen t an d Secretary to the Cabinet, Premier's Departrcent:, Hobart, Tas::,.a nio. Fitzgibbon, Mrs P. Ta smanian Counci l of Ch u r ch e s , fiobart ,

Tasmania Frankcombe, Mr D.W., Forest and wo od Produ c ts Ma nase r, Au s tralian Newsprint Mi lls Ltd. , Boyer, Tasm.ania

2 41

Gaskell, Mr W., Assistant to Commissioner, Hydro-Electric Commission, Hobart, Tasmania Gibson, Mr B.F., Chief Executive, Australian Newsprint Mills Ltd., Boyer, Tasmania Graham, Mr R., Moonah, Tasmania Harders, Sir Clarence W., representing the Australian Council of

National Trusts, Canberra, Australian Capital Territory Harris, Mr C.S., National Liaison Officer, Tasmanian Wilderness Society, Hobart, Tasmania Higgins, Mr I.A., General Secretary, Australian Council of National Trusts, Canberra, Australian Capital Territory Hill, Mr D., Deputy Director, Australian Conservation Foundation, Hawthorn, Victoria Iles, Mr E.C., Executive Director, Tasmanian Chamber of Industries, Hobart, Tasmania Ives, Mr D.J., Deputy Secretary, Department of National Development and Energy, Canberra, Australian Capital Territory Johnston, Mr R.G.A., Divisional Manager, Pulp and Paper

Production, Associated Pulp and Paper Mills Ltd., Melbourne, Victoria Jones, Dr R.M., Senior Fellow, Department of Prehistory, Australian National University, Canberra, Australian Capital

Territory Jones, Mr B., Assistant Secretary, De velopment Branch Departme nt of National Development and Energy, Canberra, Australian Capital Territory Jones, Mr B.O., M.P., Shadow Minister for Science and Technology, Parliament House, Canberra, Australian Capital Territory Keller, Mr R.J., Development Officer, Department of Industrial

Development, Hobart, Tasmania Kellow, Dr A.J., Lecturer, Centre for Environmental Studies, University of Tasmania, Hobart, Tasmania

Kerrison, Mr G.N., Chief Electrical Engineer, Hydro-Electric Commission, Hobart, Tasmania Lambert, Dr G.A., south west Tasmania Committee (NSW), Sydney, New South Wales Langford, Mrs R.F., State Secretary/ Publicity Officer, Tasmani an

Aboriginal Centre, Glebe, Tasmania Lohrey, Mr A., M.H.A., Parliament House, Hobart, Tasmania Lowe, The Hon. D.A., M.H.A., Parliament House, Hobart, Tasmani a Mahon, Mr V.J., Information Officer Tasmanian Wilderness Society, Hobart, Tasmania Mansell, Mr M.A., Tasmanian Aboriginal Centre, Glebe, Tasmania McLaughlin, Mr B.P. Chief Engineer, Australian Newsprint Mill s

Ltd., Boyer, Tasmania McNeill, Mr N.J., Senior Steam and Power Plant Engineer, Comalco Ltd., Melbourne, Victoria Meadows, Mr W.G.H.,Divisional Manager, Forestry and Timber

Di vision Assoc iated Pulp a nd Paper Mill s Ltd., Melbourn e , Victoria Merse, Mr A.G., Re search Officer, Department of Industrial Development, Hobart, Tasmania

242

Messerle, Professor H. Head of School of Electrical Engineering, University of Sydney, Sydney, New South Wales Mitchell, Mr W.R., Chief Civil Engineer, Hydro-Electric Commission, Hobart, Tasmania

Morgan, Mr J.E., Group Technical Manager, Associated Pulp and Paper Mills Ltd., Melbourne, Victoria Mulvaney, Professor J., Australian National University, Canberra, Australian Capital Territory

Nicholson, Mr R.B., Government Relations Manager, Shell Australia Ltd., Melbourne, Victoria Outhred, Dr H.R., Roseville, New South Wales Paisley, Mr W.D., Manager, Group Technical and Development

Division, Associated Pulp and Paper Mills Ltd., Melbourne, Victoria Parsons, Mr L.C., Chairman, Chamber of Industries Energy Committee, Hobart, Tasmania

Rae, Senator Peter, Launceston, Tasmania Reece, Mr E.E., Glenorchy, Tasmania Reed, Mr G.K., Deputy Chairman, Victor Petroleum & Resources Ltd., Melbourne, Victoria

Richardson, Dr A.M.M., Senior Lecturer, Department of Zoology, University of Tasmania, Hobart, Tasmania Ridley, Mr R., State Secretary, Amalgamated Metal Workers and Shipwrights Union, Hobart, Tasmania

Rowe, Mr K.C., Managing Director, Goliath Cement Holdings Limited, Railton, Tasmania Saddler, Dr H. Centre for Resource and Environmental Studies, Australian National University, Canberra, Australian Capital

Territory Sanders, Dr N.K., M.H.A., Parliament House, Hobart, Tasmania Stewart, Mr J.M., General Manager, Comalco (Bell Bay) Ltd., George Town, Tasmania

Thompson, Mr P.X., South West Tasmania Project Officer, Australian Conservation Foundati on , Victoria Todd, Dr J.J., Lecturer, Centre for Environmental Studies, University of Tasmania, Hobart, Tasmania

Turnbull, Mr c.s.s., Consultant, Business Association for Economical Power, Hobart, Tasmania Tysoe, Mr J.D., Assistant Secretary, Energy Economics Branch Department of National Development and Energy, Canberra,

Australian Capital Territor y Walker, Dr R.I. Executive Member, Business Association for Economical Power, Hobart, Ta s mania Watson, Mr R.J., Honorary Secretary, Business Association f or

Economical Power, Hobart, Ta smania Webster, Reverend D, General Secreta r y , Tasmani a n Council of Churches, Hobart, Tasmania west , Mr S.J., M.P., Opposition Spokesman on En v ironment and

Conservation wh itehouse, Mr D., Expl orati on and Mining Manag e r, Coal Di v ision, Shell Australia Ltd., Melbourne, Victoria wilcox, Mr M. Q.C., President, Australian Conservati on

Foundation, Hawthorn, Vict oria

243

APPENDIX III

LIST OF PEOPLE AND ORGANISATIONS WHO PROVIDED THE COMMITTEE WITH SUBMISSIONS OR OTHER WRITTEN MATERIAL

ANU Mountaineering Club, Canberra, Australian Capital Territory Abbott, Mrs J., Sandringham, Victoria Adams, Mr R.N., Launceston, Tasmania Adelaide Bushwalkers Inc., Onley, South Australia Adelaide Ornithological Club, Millswood, South Australia Adelaide University Sports & Physical Recreation Association

Inc., Adelaide, South Australia Aikins, Mr D., Beaumaris, Victoria Akeroy d, Mrs L.V., Box Hill North, Victoria Akeroyd, Ms J., Euroa, Victoria Alexander, Ms L. & Lesslie, Mr R., St. Peters, South Australia Alvey, Mr J., Moorooka, Queensland Amalgamated Metal Workers and Shipwright's Union, Hobart,

Tasmania Anderson, Mr L.L., Rostrevor, South Australia Andrew, Mr R.C., Kensington, Victoria Animal Liberation, Sydney, New South Wales Ansell, C.H. & M.L., East Kew, Victoria Aquarian School of Yoga, Blackburn, Victoria

Archaeological & Anthropological Society of Victoria, Melbourne, Victoria Armstrong, Mr M.W.U., Mortlake, Victoria Ashenden, Mr P.J., We stbourne Park, South Australia Associated Pulp and Paper Mills Limited, Melbourne, Victoria

Aubrey, Mr D., Adelaide, South Australia Australasian Raptor Association, Clayton, Victoria Australian & New Zealand Scientific Exploration Society, Adelaide, South Australia

Australian Archaeological Association, Sydney, New South Wales Australian Committee for I.U.C.N., Sydney, New South Wales Australian Conservation Foundation, Hawthorn, Victoria

Australian Council of National Trusts, Canberra, Australian Capital Territory Australian Heritage Commission, Canberra, Australian Capital Territory Australian Mines & Metals Associati on , Hobart, Tasmania Australian Newsprint Mills Limited, Boyer, Tasmania

Australian Paper Manufacturers Limited , Gee ve ston, Ta sma nia Au s tralian Spele ological Federation, Grafton, New South Wales Australian Timbe r workers' Union, No.6 Branch, New Town , Tasma nia Aylen, Mr N., Heathfield, South Australia Aysom, Mrs A., Blacktown, New South Wales Bade, Ms J., Hamilton, Victoria,

Bailey, Mr J.M., and Thiele, Ms J., Como, Western Australia

2 45

Baker, Mr & Mr R.C., Prospect, South Australia Baker, Mr R.E., Orford, Tasmania Baker, Ms M., College Park, South Australia Bakewell, Mr c., Kew, Victoria Baldwin Transformers (Tas) Pty.Ltd., Hobart, Tasmania Balkau, Dr F., Glen Iris, Victoria Bally, Mr J., Moorabbin, Victoria Banks, Mr C.B., Brunswick, Victoria Baptist, Mrs M.B., Banyo, Queensland Barclay, Mr A., Belgrave Heights, Victoria Barmuta, Mr L.A., Caulfield South, Victoria Barnett, Mr P., Hectorville, South Australia Barossa Environment Society, Nurioopta, South Australia Bartholomaeus, Ms K., Weetulta, South Australia Bartlett, Mr M.A., Hawthorn, Victoria Beeston, Ms G., and others, Launceston, Tasmania Bega-Tathra Conservation Society, Tathra, New South Wales Beirne, Mr T., Chidlow, Western Australia Bell, Mr C., Blackmans Bay, Tasmania Bell, Mr D., Mitchell Park, South Australia Bell, Mr G.F., Hawthorn, Victoria Bell, Mr R.T., Horsham, Victoria Bell, Ms J.E., North Carlton, Victoria Benlow, Mr J.C., Stirling, south Australia Bennett, Drs., South Hobart, Tasmania Biggs, Mr J.B., Eleebana, New South Wales Biological Society of the A.N.U., Canberra, Australian Capital

Territory Bird Observers Club, Nunawading, Victoria Bird, Dr P.R., Hamilton, Victoria Blackwell, Mr D., Downer, Australian Capital Territory Blackwood & District Tree Preservation & Gardening Society,

Glenalta, South Australia Blakers, Mr A., Randwick, New South Wales Blyth, Ms J., Macleod, Victoria Boddington, Mr A.C., Parkerville, Western Australia Boland, Mr J., University of Adelaide, South Australia Booth, Mr D.R.C., Forth, Tasmania Botany Club, University of Queensland, St Lucia, Queensland Bouman, Mr M., Ermington, New South Wales Bourke, Mr M., Lyons, Australian Capital Territory Bowden, Mr M., Moonah, Tasmania Bowling, Dr A., University of Tasmania, Hobart, Tasmania Bowman, Mr c., Magill, South Australia Boyce, Mr W.A., Eltham, Victoria Boyd, Ms K., Hamilton, New South Wales Bramsden, B. & Edmonds, M., Penrith, New South Wales Branxholm Sawmills, Launceston, Tasmania Bretherick, Mr c., Magill, South Australia Brightwell, Mrs A.G., Pt Clare, New South Wales Broad, Mr P., Uni versity of Melbourne, Parkville, Victoria Broken Hill Propri e tary Company Limited, Melbourne, Victoria Brown, Dr R., Hobart, Tasmania Brown, Mr T., Rostrevor, South Australia

246

Brownell, Mrs J., Camberwell, Victoria Brownscombe, R., Dundas, New South wales Bryan, Dr L.R.A., Silvan, Victoria Buchanan, Mr G., Heathmont, Victoria Burke, Mr P., Nerrina, Victoria Burke, Mrs., East Malvern, Victoria Burrendong Arboretum Associati on , Stuart Town, New South Wale s Burton, Ms F., Hampton, Victoria Burton, Professor J.R., University of New England, Armidale, New

South Wales Bush and Mountain Walking Leadership Training Board of S.A. Inc., Millswood, South Australia Business Association for Econom ical Power, Hobar t, Tasmania Byrne, Mr G., Reservoir, Victoria Byrne, Ms L., Coleraine, Victoria Byrne, Ms L., Westbury, Tasma nia CSIRO, Dickson, Australian Capital Te rritor y

CWCV, Melbourne, Victoria Calvert-Smith, Mr S, Mentone, Victoria Camden Haven Conservation Soci e ty, North Ha ven, New South Wales Cameron, Mr D., Jackey 's Marsh, Ta sma nia Cameron, Mr P.N., Ballarat, Victoria Campaign Against Nuclear Energy, Adel a ide, South Australia Campbell, Mr J.A., Kensington, West e rn Australia Canberra Bushwalking Club, Canberr a , Aus tr alian Capi tal Te rritor y Canberra Speleologica l Society, Aranda , Aust r al ia n Capital

Territory Candy, Mr R.B., North Kew, Vi c toria Carolan, Ms P.M., Brighton, Victoria Carslaw Bindii & Beanie Briga de , Balmain, New Sout h Wa l es Carter, Mr G., Hawthorndene, South Australia

Catford, Mr A., South Turramurra, New South Wales Catholic Bushwalking Club, Sydney, New So uth Wales Central Australian Conservation Council, Al i ce Springs , Northe r n Territory

Ce ntral Hills Environmental Ac t ion Group, Little Hamp ton, Sou th Australia Chapman, Mr A., Raven s t ho rpe , Western Australia Chapman, Mr J., Melbour ne , Vict ori a Chapman, W.O., Doncaster East, Victoria Charman, Mr N., Clarence Park, South Australia Cheesman, Mrs s., Maldon , Vi c t or ia City of Hobart, Tasmani a

Clarke, Ms J., Dunkeld, Victoria Clulow, Mrs V.M., Trafalgar, Victori a Coa stal Protec tion As s oc iati o n Inc., Qu in n s Po cK, West er n Australia

Cocks , Dr K.D., O'Connor , Au st r alian Capital Territory Collard, Miss L., Carlingfor d , New South Kales Colong Committee Limited , Sy dney , New South Wales Comalco Aluminium (Bell Bay) Lim ited, Tasman i a

Come ng Indu s tri a l Equipment Pty Lt d ., Piverwcod , Sout h Wales

Communist Party of Australia (Hob a rt Branc h) Compton, Mr H., Darwin, North er n Te rrit ory

247

Conservation Council of S.A. Inc., Adelaide, South Australia Community Research Action Centre, Monash University, Clayton, Victoria Conservation Council of the South-East Region and Canberra Inc.,

Canberra City, Australian Capital Territory Cookson, Mr B. & Ms K., Dandenong, Victoria Cooper, Mr M.N., Hobart, Tasmania Cooper, Mr R., Rostrevor, South Australia

Cope, Mr G., Nunawading, Victoria Copley, Mr P., Leabrook, South Australia Corkran, Mr L., Paddington, Queensland Costigan, Mr T., Ashwood, Victoria Council of Social Service of Tasmania, North Hobart, Tasmania Counsell, Mr J., Ivanhoe, Victoria Counsell, Ms J., Ivanhoe, Victoria Cowdell, Mr A.W., Elsternwick, Victoria Cowles, Mr D., Highbury, South Australia Cox, Ms M., Lilydale, Victoria Coxon, Mrs A., Coleraine, Victoria Craven, Mr P.M., Essendon, Victoria Crawford, Ms 0., North Kew, Victoria Crescitelli, Mr 1., Hectorville, South Australia Cupit, Mr G., Carnegie, Victoria Curnow Family, Sandy Bay, Tasmania Cusack, M & S, Alexandra, Victoria D'Aloia, Miss., South Australia D. & T. Conservation Society, East Doncaster, Victoria Davey, Mr A., Grafton, New South Wales Davidson, J.M., Glen Waverley, Victoria Davies, Mr N., Launceston, Tasmania Davies, Mr R., Newton, South Australia Davies, Ms I.J., Kew, Victoria Davis, E. & s. and others, Ovingham, South Australia Davis, Mr G., Beaumaris, Victoria Day, Mr A., North Yelta, South Australia Day, Ms K., Fullarton, South Australia De La Rambelje, Mrs I.A., Black Rock, Victoria Dean, Mr B. & Mrs J., Red Cliffs, Victoria

Deed, Mr C.G., Bendigo, Victoria Delaney, Mr L., Hughesdale, Victoria Demmrich, Mr M., Magill, South Australia Dempster, Mrs R.M., Hamilton, Victoria Denholm, Mr B., Howrah, Tasmania

De nny, J.O.K., Lilydal e , Tasmania Department of Home Affairs & Environment, Canberra, Australian Capital Territory Department of Industrial Developme nt, Hobart, Tasmania Department of Mines, Hobart, Tasmania De partment of National Development & Energy, Canberra, Australian

Capital Territory Department of Tourism, Hobart, Tasmania Department of the Environment, Hobart, Tasmania Des ign Centre of Tasmania, Launceston, Tasmania

Devonpor t Fi e ld Naturalists' Club, East Devenport, Tasmania

248

Diesendorf, Dr M., Canberra, Australian Capital Territory Dight, Ms R., South Yarra, Victoria Dillon, Miss W., Rostrevor, South Australia Dillon, Mrs A., Arcadia, New South Wales Division of Recreation, Education Department, Hobart, Tasmania Donaldson, Mrs H., Westbury, Tasmania Dorman, Mr & Mrs., Beaumaris, Victoria Derrington, Mr c., Sandy Bay, Tasmania Douglas, Ms F., Hawthorn, Victoria Douglas, R.E.M., Katoomba, New South Wales Dragun, Dr A.K., Australian National University, Canberra,

Australian Capital Territory Duncan, Mr A.G., Millswood, South Australia Duncan, Ms P.E., East Malvern, Victoria Dunstan, E.E., Heidelberg, Victoria Dunstan, M., Heidelberg, Victoria

Durre, Ms c., St. Kilda, Victoria Dutton, Mr I.M., Paddington, Queensland Dwyer, Mr P., Windsor, Victoria Eadie, Mr K., Drummoyne, New South Wales

Electrolytic Zinc Company of Australasia Limited, Ro s eberry, Tasmania Ellemor, W.R., Wangaratta, Victoria Escott, Ms R., Heidelberg, Victoria Everett, Mrs J.M., Strathfield, New South Wales

Eves, Mr R., Kangarilla, South Australia Ewing, Mr P., Cottlesloe, Western Australia Farr, Mr A., Greensborough, Victoria Farrow, Mrs J., Bridgewater, South Australia Faulkner, Ms R., Taroona, Tasmania

Federated Miscellaneous workers' Union of Australia (Tasmanian Branch), North Hobart, Tasmania Federation of Bushwalking Clubs of N.S.W., Sydney, New South Wales Federation of Tasmanian Bushwalking Clubs, Launceston, Tasmania Fellows, Ms R., Ashburton, Victoria

Fergus, Mr G., Highgate Hill, Queensland Fiala, N., Glenalta, South Australia Finnie, S.P., North Balwyn, Victoria Fizell e , Miss P., North Mackay, Queensland

Fizelle, Ms P., Kew, Victoria Flemming, Mr M., Tranmere, South Australia Flint, Mr C., Darwin, Northern Territ ory

Flint, Ms J., Torrens Park, South Australia Floyd, Mr P., Campbelltown, South Au s tralia Faden, Dr J.D., Belair, South Australia Fogarty, Mr M., Blackburn, Victoria

Ford, Dr R.J., University of Tasmania, Hobart, Tasmania Forelly, Mr F., Hectorville, South Australia Foulkes, Mr S., North Caulfield, Victoria Frank, Mr R.K., Clifton Hill, Victoria

Franz, Mr B., Kilsyth, Vic t oria Fraser, P., Klemzig, South Australia

Fricke, Mr R.C., Blairgowri e , Victoria

249

Friends of the Earth, Adelaide, South Australia Friends of the Earth, Canberra, Australian Capital Territory Friends of the Earth, Perth, Western Australia Frochter, Mr H., Diarella, Western Australia Fulco, G., Rostrevor, South Australia Fund for Animals Ltd., Australia, Manly, New South Wales Galvin, Mr P., and others, Bendigo, Victoria Garvey, MS J.L., Toorak, Victoria Gee, Ms H., Buckland, Tasmania Geeves, Mrs K., Port Huon, Tasmania Gericke, Miss A. Rostrevor, South Australia Getty Oil Development Co. Ltd., North Sydney, New South Wales Gibbons, Mr G., Stirling, South Australia Gibson, Mr M., The Gap, Queensland Gibson, Mr W.L., The Gap, Queensland Gibson, The Hon, Sir Marcus, Hobart, Tasmania Gilfedder, Ms L., South Hobart, Tasmania Gilfedder, Ms T., Battery Point, Tasmania Gillian, Mr C., Lindisfarne, Tasmania Gillian, Mr C.A.L., Lindisfarne, Tasmania Go denzie, Ms J., Coogee, New South Wales God f rey-Smith, Ms A., Narrabundah, Australian Capital Territory Goe gan, Mr P., Lilydale, Victoria Goegan, Mrs K., Lilydale, Victoria Gold Coast Protection League, Miami, Queensland Goliath Cement Holdings Limited, Railton, Tasmania Gosford District Environment Foundation, Gosford South, New South

Wales

Gough, Ms A.J., Devenport, Tasmania Goulburn Field Naturalist Society, Goulburn, New south Wales Goulding, Ms J., Templestowe, Victoria Gouldthorpe, Ms H., Don, Tasmania Goven, Mr A.P., Ballarat, Victoria Graham, Mr C., Windsor , Victoria Gr aham, Mr R., Moonah, Tasmania Gramatopoulos, Mr N., Hectorville, South Australia Gr ay , Mr A., Montmor ency, Victoria Gray, Mrs J . E., Montmorency , Victoria Gr een , G.R., Jennings , D.J., Collins, P.L.F., Corbett, K.D.,

Thr ea der, V.M. & Bacon, C. A., Hobart, Tasmania Greene, Miss T Rostrevor, South Australia Greenhill, Mrs J., Sandy Bay, Tasmania Greenpeace Australia Inc., Adelaide, South Australia Greer, Mr B., Grassy Spur , Victoria Grogan, Dr R., Albert Park, Victoria Grosser, Mr I., Cheltenham, South Australia Grover, Mr D., Lane Cove , New South Wales Grulich, Mr A., Vale Park , South Australia Gulwon, Miss P., Morialta, Sou th Australia Gun s tone, Ms J.E., Kilsyth, Victoria

Ha ga r, Mr T., Belmore, New South Wales Hale, Mrs E., Malvern, Victoria Hands, A. & c ., Newtown, Victoria Hannagan, Mr M., Panania, New South Wales

250

Hannigan, Ms P., Hawthorn, Victoria Happy Larry Canoe Club, Downer, Australian Capital Territory Harries, Mr C., Hobart, Tasmania Harris, Miss T., Morialta High School, South Australia Harris, Mrs., Ravenswood, Tasmania Hart, Ms L., South Hobart, Tasmania Hartley, Mrs B.P., Greensborough, Victoria Hawes, Mr M., Battery Point, Tasmania Hay, Mr M.C., Dalkeith, Western Australia Hay, Mr P., Camberwell, Victoria Hazeldine, Mr E., Surrey Hills, Victoria Head, Miss K., Heathmont, Victoria Head, Ms L., Monash University, Clayton, Victoria Hennelly, Mrs D., Mentone, Victoria Hennigan, Mr K.A., Largs Bay, South Australia Herr, Dr R.A. & Davis, B.w., University of Tasmania, Hobart,

Tasmania Hewett, Mr M.R., Alice Springs, Northern Territory Hibbs, A.R., East Ringwood, Victoria Hildyard, Ms A., Cascades, Tasmania Himson, Mr A., Sandy Bay, Tasmania

Hines, G., Cowwarr, Victoria Hipkins, Mr M., East Perth, Western Australia Hitchcock, Mr D.E., Armidale, New South Wales Hobart Architectural Co-operative Inc., Hobart, Tasmania

Hobart Walking Club, Hobart, Tasmania Homan, Mr P., Eltham, Victoria Hoogstad, Mr B., Rostrevor, South Australia

Hooper, Mrs C., Applecross, Western Australia Hospital Employees' Federation of Australia, Tasmanian Branch No.1, Hobart, Tasmania Houghton, Ms s., Dingley, Victoria Hoysted, Mr P., Dynnyrne, Tasmania Humphries, Mr P., Burwood, Victoria Hutton, Dr D.R., Monash University, Clayton, Victoria

Hydro-Electric Commission of Tasmania, Hobart, Tasmania Ingles, Mr J.G., Launceston, Tasmania International Council on Monuments and Sites (ICOMOS), Sydney, New South Wales

International Solar Energy Society, Canberra Section, Australian Capital Territory Jackson, A. E., Stonyfell, South Australia Jackson, s., Grose Vale, New South Wales

James, Mrs., South Caulfield, Victoria James, Mrs G., Hamilton, Victoria James, W.H.L., Hamilton, Victoria J ohnson, Professor B., University of Tasmania, Hobart, Tasman ia Johnston, Mr L., Chatswood, New South Wales Jolley, Ms L., Mt Gambier, South Australia

Jolly, Mr C., Stirling, South Australia Jones, Dr R., University of Tasmania, Hobart, Tasmania Jones, Dr R., Australian National University, Canberra, Australian Capital Territory

Jones, G., Magill, South Australia

251

Jones, Mr B.O., M.H.R., Canberra, Australian Capitat Territory Jones, Mr I.R., Normanhurst, New South Wales Katoomba & District Wildlife Conservation Society, Wentworth Falls, New South Wales Keely, MrS. & Rose, Mr P., Swan Hill, Victoria Keily, Mr J., Black Rock, Victoria Kellow,.Dr A., University of Tasmania, Hobart, Tasmania Kelly, Mr B., Wantirna, Victoria Kelly, Mr D.J., Wollstonecraft, New South Wales Kerr, Mr P., Rostrevor, South Australia Khan, Dr & Mrs., Mt Pleasant, Western Australia Kiely, Mrs 0., Black Rock, Victoria Kiernan, Mr K., North Hobart, Tasmania King, Mr C.F., Launceston, Tasmania Klauer, Mr H.J., Seaford, Victoria Kleeman, Mr B.V., Flagstaff Hill, South Australia Lake, P.s., Monash University, Clayton, Victoria Lam, Mr J.C., Carlton South, Victoria Lamb, Mrs P., Palm Beach, Queensland Lamey, Mr G. & Ms J., Stirling, South Australia Lammerts Van Bueren, Ms D., Monash University, Clayton, Victoria Lancaster, Mr K., Launceston, Tasmania

Landers, Ms H., Fitzroy, Victoria Lane, Ms S.K., South Yarra, Victoria Langford, Mr M., Albury, New South Wales Latrobe Mountaineering Club, Ivanhoe, Victoria Launceston Field Naturalists Club, Hadspen, Tasmania Law, Mr G., Camberwell, Victoria Lawrence, Mr M., Derwent Park, Tasmania Lawson, Ms P. & Tedder, Mr G., Athelstane, South Australia Lello, C.D. & B.J., St. Kilda, Victoria Leonard, Mr M., Windsor Gardens, South Australia Lesser, Mrs c. & Mr A., Munich, west Germany Lewis, Mr D., University of Adelaide, Adelaide, South Australia Lewis, Mr P., Clifton Hill, Victoria Lillywhite, Ms M., Mylor, South Australia Lilydale Council, Newnham, Tasmania Linnean Society of New South Wales, Sydney, New South Wales Lister, Ms A., North Hobart, Tasmania Lockhart, Mr T.J., Longford, Tasmania Locksley Bushwalking Club, Heidelberg, Victoria Logan, Ms J., Windsor, Victoria Lohrey, Mr A., M.H.A., Tasmanian Government Lord, Mrs G., Sandy Bay, Tasmania Lorenz, Mr M., Rostrevor, South Australia Lovis, Mr P., Highbury, South Australia

Lowe, The Hon. D.A., M.H.A., Hobart, Tasmania Lower Blue Mountains Conservation Society, Springwood, Ne w South Wales Ludwig, Dr J., Taroona, Tasmania Mace, Mrs N., South Yarra, Victoria Maciunas, K.J., University of Adelaide, South Australia Mackenzie, Miss M., Frankston, Victoria Mackerras, Mr M., Canberra, Australian Capital Territory

252

Madden, E., Launceston, Tasmania Maddock, Mr N., Rostrevor, South Australia Madge, Miss K.F., Magill, South Australia Maguire, Mr A., Unley Park, South Australia Mahon, Mr v., South Hobart, Tasmania Mahony, M.J., Launceston, Tasmania Main, Mr D., Clifton Hill, Victoria

Main, Mr R., Lambton, New South Wales Major, Ms J., Lower Templestowe, Victoria Maley, Mr B., West Leederville, Western Australia

Mann, M., Alphington, Victoria Mannall, Mr G., O'Connor, Australian Capital Territory Marquis, B.R., Lynton, South Australia Marsh, Mr D.W., Niddrie, Victoria Marshall, R.Q. & s., Waterfall Gully, South Australia Maryborough Field Naturalists' Club, Avoca, Victoria Maxwell, Ms B.D., Plympton, South Australia

Mayne, Ms C., Healesville, Victoria McAlpin, Mrs A., Horsham, Victoria McArthur, Mr G., East Malvern, Victoria McAuley, Mr I., Yarralumla, Australian Capital Territory McCammon, Ms M., Mosman, New South Wales McCormack, Mr J., Windsor Gardens, south Australia McEachern, Mr C.M., Blackwood, South Australia

McGregor, R.M., Dunkeld, Victoria Mcinnes, s. & L.D., Victoria Valley, Victoria Mcintyre, Miss M., Beverly, South Australia McKaige, Ms M. and others, Murrumbeena, Victoria

McKenry, Mr K., Ainslie, Australian Capital Territory McKenzie, Mr R., O'Connor, Australian Capital Territory Mechanical Engineering Department, University of Adelaide, South Australia

Melbourne Bushwalkers, Melbourne, Victoria Melbourne University Mountaineering Club, Parkville, Victoria Melbourne Walking Club, Melbourne, Victoria Melbourne Women's Walking Club, St. Kilda, Victoria

Menzel, G., Brunswick, Victoria Menzies, R., Croydon North, Victoria Merrick, Mr C., Rose Park, South Australias Merrifield, Miss S., Magill, South Australia

Merrilees, Dr D., Manjimup, Western Australia Messerle, Professor H.K, Sydney, New South Wales Middlesex Conservation Farming Club, Roleystone, Western Australia

Millard, Miss K., Tranmere, South Australia Millard, Miss M.J., Kensington, Western Australia Milligan, Mr J., Nunawading, Victoria Minchin, c., Kensington Park, South Australia

Modistach, Mr I.C., Burnside, South Australia Molloy, Mr A., Glen Iris, Victoria Monash University Bushwalking Club, Clayton, Victoria Moore, Mrs L.B., Balwyn, Victoria

Moorhead, Mrs., Beaumaris, Victoria Moreton Island Protection Committee, North Quay, Queensland

253

Morison, Mr A.K., Shepparton, Victoria Morley, Miss J.R., Hawthorn, Victoria Morris, Mr D., Rostrevor, South Australia Morris, Mr P., Rostrevor, South Australia Morris, Ms H., Glen Iris, Victoria Morris, Ms J., Hurlstone Park, New South Wales Mosca!, A.M., Midway Point, Tasmania Mount Gambier Field Naturalists Society, Mount Gambier, South

Australia Mt Lyell Mining & Railway Co., Queenstown, Tasmania Mugford, J.S. & J.W., Campbelltown, South Australia Mulvaney, Professor, D.J., Australian National University,

Canberra, Australian Capital Territory Munckton, Mr M., East Melbourne, Victoria Municipality of Burnie, Tasmania Murvean, K., Battery Point, Tasmania Murphy, M.E. Nagel, Ms T., North Fitzroy, Victoria National Parks & Wildlife Services, Sandy Bay, Tasmania National Parks Association of N.S.W., Clarence Valley Branch,

Grafton, New South Wales National Parks Association of NSW - Tamworth Branch, New South Wales National Parks Association of N.S.W. Berrima District Branch,

Moss Vale, New South Wales National Parks Association of the A.C.T. Inc., Canberra, Australian Capital Territory National Parks Association of NSW, Sydney, New South Wales National Trust of Australia (NSW), Sydney, New South Wales National Youth Council of Australia Inc., St. Kilda, Victoria Nature Conservation Society of South Australia Inc., Adelaide,

South Australia Nelson, A., Rostrevor, South Australia Nevill, Mr & Mrs C.J., Oakleigh, Victoria Newbery, D.R., Hawthorn, South Australia Nicholls, Ms S., Kew, Victoria Nillsen, Mr C.S., Onley, South Australia North Coast Environment Council, Kendall, New South Wales North West Walking Club, Ulverstone, Tasmania North, Mr E.J.H., East Ivanhoe, Victoria North, Mrs D.M., East Ivanhoe, Victoria Northern Caverneers, Launceston, Tasmania O'Brien, Dr E.D., Albert Park, Victoria O'Brien, Miss K., Magill, South Australia O'Brien, Ms M., Mont Albert, Victoria O'Reilly, Ms P., Maida Vale, Western Australia Oakeshott, Ms S.J., Hawthorn East, Victoria Oakleigh & District Environment Group, Victoria Oats, Mr G., Glenalta, South Australia Officer, Mr K.L.C., Box Hill North, Victoria Ogilvie, Mr H.G., Box Hill North, Victoria Olivero, Miss F., Rostrevor, South Australia osciak, Mr R., Glen Waverley, Victoria Outdoor Educators Association of South Australia, Millswood,

South Australia

254

Outhred, Dr H.R., Univerisity of New South, Kensington, New South Wales Ovenden, Mr J.A., Hawthorn, Victoria Padgham, Miss L., Adelaide, South Australia

Page, D.C., Burnie, Tasmania Pahor, Mr G., East Bentleigh, Victoria Pannell, Mr E.R., Naracoorte, South Australia Pannell, Mrs C., Warrnambool, Victoria Pannell, Mr C., Warrnambool, Victoria Parrella, Miss A., Rostrevor, South Australia Pawsey, Ms E., Lindisfarne, Tasmania Paynter, Mr J.R., Newcastle, New South Wales Peko-Wallsend Operations Ltd., Devenport, Tasmania Pembroke School, Kensington Park, South Australia (petition) Pennzoil of Australia Limited, North Sydney, New South Wales Pepper, Mr & Mrs A., Gateshead, New South Wales Phillips, Mr A., Hectorville, South Australia Picone, C.G., Hawthorn, Victoria

Pittendreigh, R., Blair Athol, South Australia Pledge, Mr N., S.A. Museum, Adelaide, South Australia Pocock, Miss K., Newton, South Australia Portland Field Naturalists' Club, Portland, Victoria Priest, Mr M.J. & Haggins, Ms D. D., Blackmans Bay, Tasmania Pritchard, Ms J., Hamilton, Victoria Prouse, M.M., Naracoorte, South Australia Quail, Mr K., O'Connor, Australian Capital Territory

Quiggin, Mr J., Downer, Australian Capital Territory Rackham, Mr C.A., New Town, Tasmania Rae, Senator Peter, Launceston, Tasmania Rallings, R.A., New Town, Tasmania

Rando, Mr S.P., South Caulfield, Victoria Ray, J.M., Merrigum, Victoria Rayner, Mr C., East Keilor, Victoria Rayner, Mr J., Parkville, Victoria

Rayner, Ms P., Coffs Harbour, New South Australia Reardon, Mrs M., Hope Valley, South Australia Reddy, Ms D. & Ryan, Mr B., Tighes Hill, New South Wales

Reece, Mr E., Glenorchy, Tasmania Reedman, L.A., Neutral Bay, New South Wales Reynolds, T.M., Lockleys, Tasmania Rich, Ms J., Healesville, Victoria Richards, Ms P., Bayswater, Victoria

Richardson, Mr A., South Oakleigh, Victoria Richardson, Mrs V.E., Frankston, Victoria Richardson, Vanessa, Adelaide, South Australia Rigg, Mr A.M., Doncaster, Victoria

Rimington, MrS., Clearview, South Australia Roberts, Mr C., Rostrevor, South Australia Roberts, Mrs M.A., Balmoral, Victoria Robertson, Mr P., North Hobart, Tasmania

Robertson, Mr R.C., Launceston, Tasmania Robertson, Ms V.E., Elwood, Victoria Ms B., Hampton, Victoria

Rohead, Mr A.B., Reservoir, Victoria

255

Rolls, R.F., Launceston, Tasmania Rooney, P.T., Hawthorn East, Victoria Rose, S.J. & V.L., Empire Bay, New South Wales Rossiter, Mr R., Bright, Victoria Rossiter, Mrs U.M . , Bright, Victoria Rowberry, Mr G.M., Glenalta, South Australia Rowe, Mrs R., Trevallyn, Tasmania Royal Australasian Ornithologists Union, Moonee Ponds, Victoria Royal Australian Institute of Parks & Recreation, Belconnen,

Australian Capital Territory Royal Australian Institute of Architects, Red Hill, Australian Capital Territory Ruddell, P. & A., East Bentleigh, Victoria Rusden Environment Action Group, Clayton, Victoria Saddler, Dr H. & Donnelly, Dr W., Australian National

University, Canberra, Australian Capital Territory Saddler, Dr H., Bennett, J., Reynolds, I. and Smith, B.,

Canberra, Australian Capital Territory Savill, M.J., Hyde Park, South Australia Scarlett, J . & K.J., Lower Templestowe, Victoria Scarlett, Mr G., Lower Templestowe, Victoria Scarlett, Mr J.D., Macleod West, Victoria Schaube, Mr C., Victoria

Schembri, Highett, Victoria Schneider, Ms R., North Adelaide, South Australia Scott, Mr R., Carlton, Victoria Scott, Ms F.J., Parkville, Victoria Scott, Ms T., Clearview, South Australia Scott, Ms T., Eltham, Victoria

Searle, Mr R., Bullaburra, New South Wales Sebastian, Ms J., Balwyn, Victoria Seed, Mr J., The Channen, New South Wales Semmens, Mr R.B. Mallacoota, Victoria Shannon, Mrs R.M., Taringa, Queensland Sharp, Mr F.W., Surrey Hills, Victoria Shaw, E.M., Mentone, Victoria Shaw, Mr R., Hove, South Australia Sheard, Dr G., Cooma, New South Wales Shell Australia Limited, Melbourne, Victoria Shelton, Mr G., Rostrevor, South Australia Sheridan, Mrs G.M., French's Forest, New South Wales Siliakus, Mr L., Tranmere, South Australia Simpson, Mr A.E., Glenelg North, South Australia Skinner, R., Muswellbrook, New South Wales Slinger, Mr P., Lilydale, Victoria Small, Ms E., Canterbury, Victoria Smith, Miss M., West Hobart, Tasmania Smith, Mr D.J., Montagu Bay, Tasmania Smith, Mr D. s., Brunswick, Victoria Smith, Mr G., Ivanhoe, Victoria Smith, Mr P., Launceston, Victoria Smith, R.G., Zeehan, Tasmania Smithers, Mr J., Camberwell, Victoria

256

Smithers, Mr R., Camberwell, Victoria Smithers, Sir Reginald and Lady, Melbourne, Victoria Smithson, Ms R., Rostrevor, South Australia Smyth, Miss A., South Yarra, Victoria

Smyth, Mr C.W., Doncaster East, Victoria Smyth, Mr J., Salter Springs, South Australia Society for Growing Australian Plants, Adamstown, New South Wales Society for Growing Australian Plants (Tasmanian Region), Hobart,

Tasmania South Gippsland Conservation Society, Leongatha South, Victoria South West Tasmania Committee, Hobart, Tasmania South West Tasmania Committee (NSW), Sydney, New South Wales Southern Caving Society, Moonah, Tasmania

Southern Districts Environment Group, Old Noarlunga, South Australia Southgate, Mr R., Alice Springs, Northern Territory Southwell, L.S., Camberwell, Victoria

Spaulding, Ms F., South Hobart, Tasmania Speleological Research Group, Nedlands, Western Australia Sperber, Mr C., Glenelg North, South Australia St Agnes Bushwalking & Natural History Club, Madbury North, South

Australia StClair, Ms R.M., East Malvern, Victoria St Francis Xavier College, Beaconsfield, Victoria Stabb, Mrs C., Frankston, Victoria

Stallwood, Mr P., Lorne, Victoria Standen, Miss s., Rostrevor, South Australia Stanthorpe Field Naturalist Club, Stanthorpe, Queensland Steiner, Mr A.J., Stonyfell, South Australia Stephens, Ms K.M., Fullarton, South Australia

Stewart, Mrs E.M. & Mr A.D., East Brighton, Victoria Stone, Mr J., Brunswick, Victoria Stone, Mr R.N., Boronia, Victoria Stone, Ms M., Surrey Hills, Victoria

Storey, Mr & Mrs., Koonya, Tasmania Story Edwards, Mrs M., Macquarie, Australian Capital Territory Story, Mr R., Deakin, Australian Capital Territory Story, Ms S., Deakin, Australian Capital Territory

Strappazon, Mrs A., Kew, Victoria Street, Mrs M., and others, Mt Eliza, Victoria Stynes, Mr D., Swan Hill, Victoria Sumner, Ms R., Macleod West, Victoria

Sutter, Mr G., Dandenong North, Victoria Swainson, Mrs E., Lower King, via Albany,Western Australia Swami Satyabodhi, Adelaide, South Australia Swanton, Mrs M.H., Elwood, Victoria

Sydney Bush Walkers, Sydney, New south Wales Sydney Speleological Society, New south Wales Tap Tap, Blackburn, Victoria Tasmanian Aboriginal Centre Inc., Hobart, Tasmania Tasmanian Chamber of Industries, Hobart, Tasmania Tasmanian Conservation Trust Inc., Ulverstone, Tasmania

Tasmanian Conservation Trust, Hobart, Tasmania Tasmanian Council of Churches, Hobart, Tasmania

257

Tasmanian Environment Centre, Hobart, Tasmania Tasmanian Field Naturalists' Club, Hobart, Tasmania Tasmanian Government, Mr H. Holgate, Premier Tasmanian Tourist Council (Inc.), Launceston, Tasmania Tasmanian Wilderness Society, College Park, South Australia Tasmanian Wilderness Society, Victorian Branch Tasmanian Wilderness Society, Tasman Peninsula Branch,Premaydena,

Tasmania Tasmanian Wilderness Society (SA) Branch, Adelaide, South Australia Tasmanian Wilderness Society, Hobart, Tasmania Tasmanian Wilderness Society, Westbury Branch, Tasmania Tasmanian Wilderness Society, Canberra, Australian Capital

Territory Taylor, Mr J., Harden, New South Wales Taylor, Mr J.W.K., Brighton, Victoria The Bush Club The Tree Society (Inc.), Claremont, Western Australia Thiele, Mr L. & Tesch, Mr M., Glen Iris, Victoria

Thomas, R.A., Deloraine, Tasmania Thompson, Mr A., Epping, Victoria Thompson, Mr G., Mount Wa verley, Victoria Thompson, Mr J.R., Ashburton, Victoria Thompson, Ms L.A., West Moonah, Tasmania Thyer, R.S., Blackburn, Victoria Tideman, Ms J., Leabrook, South Australia Tideman, Ms S., Rose Park, South Australia Tilley, Mrs E., Sandy Bay, Tasmania Todd, Dr J., University of Tasmania, Hobart, Tasmania Todd, Miss L., Hectorville, South Australia Toodyay Naturalists' Club, Northam, Western Australia Toowoomba Field Naturalists Club, Toowoomba, Queensland Town & Country Planning Association(S.A.) Inc., Adelaide, South

Australia Toyama, C., Beaumaris, Victoria Tremayne, Mr A., Glen Iris, Victoria Trendle, Mr M.W., Strathpine, Queensland Trew, Mr R., Colac, Victoria Trickett, Mrs T.E., Newtown, Victoria Tudehope, Dr J.J., Mildura, Victoria United Nations Association of Australia, Hobart, Tasmania Urquhart, Ms J., Toorak, Victoria Van Rossen, Mr M., Campbelltown, South Australia Vanner, Mr G.D., Greensborough, Victoria Vegetarian Society of S.A. Inc., Adelaide, South Australia Victor Petroleum & Resources Limited, Melbourne, Victoria Victorian National Parks Association, Melbourne, Victoria Village Community Co-operative Ltd., Prospect, South Australia Vining, Dr & Mrs R., Randwick, New South Wales W.A. National Parks & Reserves Association Inc., Maylands,

Western Australia Wall, Mr L.E., North Hobart, Tasmania Walter, Mr K.J., Riverton, South Australia Walters, Mr B., Cottlesbridge, Victoria

258

Wannon Conservation Society, Coleraine, Victoria Ward, Mr R.N., Kensington Park, South Australia Warner, Ms T., Eltham, Victoria Warringal Conservation Society, Rosanna, Victoria Water Studies Centre, Caulfield Institute of Technology,

Caulfield East, Victoria Waterman, Dr P., Australian National University, Canberra, Australian Capital Territory Watkins, Mr D., Valley View, South Australia Watts, D. & C., St. Morris, South Australia

Waud, Ms P.M., Sandy Bay, Tasmania Way, Mr T.H., Glenalta, South Australia Webb, Mr M., Newport, New South Wales Weinstein, Mr N.H., The Flinders University of South Australia

Wennersten, M., Brighton, Victoria Wentworth, Mr I., Kew, Victoria Werren, Mr G.L., Monash University, Clayton, Victoria West, MrS., M.H.R., Canberra, Australian Capital Territory Westmore, Mr D., Camperdown, New South Wales Whately, MrS., Kew North, Victoria Whatley, Ms V., Westbury, Tasmania

White, Dr R., Cascades, Tasmania White, Mrs P., Whittlesea, Victoria Whitehorse Canoe Club, Carnegie, Victoria Whyte, Miss S., Port Augusta, South Australia

Wide Bay-Burnett Conservati on Council, North Bundaberg, Queensland Wild, Mr c., Dingee, Victoria Wilderness Equipment, Werribee, Victoria

Wildlife Preservation Society of Queensland Inc., Tully, Queensland Wildlife Preservation Society of Queensland Inc., Surfers Paradise, Queensland Wildlife Preservation Society of Queensland,

(Maryborough-Moonaboola Branch), Queensland Wilkins, Mr J.K., Sandy Bay, Tasmania Wilks, Mr P.O., Camberwell, Victoria Williams, Mr M.W., Newtown, Victoria

Williams, Mr N., Mordialloc, Victoria Williamson, Mr M.G., Essendon, Victoria Wilson, Mr C.G., Plympton Park, South Australia Wilson, Ms J.G., Kew, Victoria Wilson, Ms K., Beaumont, South Australia

Wood, Dr R., Lane Cove, New South Wales Wood, T.J., Kadina, South Australia Woof, Mr P., Killara, New South Wales Wright, Mi ss C., Tranmere, South Australia

Wright, Mr I.W., West Hobart, Ta smania Wright, Mr J., Langwarren, Victoria Youth Affairs Council of Tasmania, Hobart, Tasmania Yule, Rev DrS., Fitzroy, Victoria

Zehr, Ms J., Toowong, Queensland Zell, E., Hectorville, South Australia Ziegel e r, Mr D., Sandy Bay, Tasmania

259

ALTEO

ANM

APM

APPM

AusWEA

BAL

BHP

CSIRO

DEHCD

DID

DNDE

EZ

GL

GPC

GWh

HEC

HEC 1979 Report

kV

kWh

LTAO

MHD

APPENDIX IV

ABBREVIATIONS

Assessed Long-Term Average Energy Output Australian Newsprint Mills, Pty Ltd. Australian Paper Manufacturers, Ltd. Associated Pulp and Paper Mills, Ltd. Australasian Wind Energy Association

basic average load The Broken Hill Proprietary Co. Ltd. Commonwealth Scientific and Industrial Research Organization Department of Environment, Housing and

Community Development (former Commonwealth Department) Department of Industrial Development (Tasmania)

Department of National Development and Energy (Commonwealth) Electrolytic Zinc Company of Australasia Ltd. general load Goliath Portland Cement Company, Ltd.

gigawatt hour Hydro-Electric Commission Hydro-Electric Commission Report on the Gordon River Power Development Stage Two

( 197 9)

kilovolt kilowatt hour Long Term Average Output magneto hydro dynamics

261

MIL

MW MW av. SWTC (NSW)

TPFH

TWS

Zeidler Committee -

major industrial load megawatt megawatt average South West Tasmania Committee (New South

Wales) Tasmania Pulp and Forest Holdings Pty Ltd . Tasmanian Wilderness Society Committee of Inquiry into Electricity Generation and the Sharing of Power Resources in South-East Australia (1981)

262

APPENDIX V

GLOSSARY OF TERMS

Assessed long term average energy output (ALTAEO) - a measure of the annual energy which can be supplied on average of several decades and is based on simul a ting the operation of the system using river flow information recorded over the past 50 years.

Average capacity - maximum annual energy output which can be maintained at all times under the ran ge of yield conditions the system is designed to meet.

Base Load - energy for that portion of the load of an

electricity system which is supplied on a continuous basis throughout a period of time.

Basic average load (BAL) - average system load excluding holidays and weekends.

Capacity factor - ratio of the average l oa d ov er a peri od to

the possible load over the same period i f it had operated

continuously at in3talled capacity.

Co-generation - the simultaneous production of electricity and process heat.

Conversion efficiency - the efficiency with which a thermal station c an convert the heat energy in fuel to electricity .

Energy - the work which electric power does in a given period

(ie power multiplied by time) and is measured in kilowatt-hours (or gigawatt hours)

26 3

Escalator, fuel price or construction cost - increase in cost in real terms (ie after inflation has been taken into account)

General load - combined energy consumption of all customers other than major industrial load customers

Gigawatt - 1 000 000 000 watts (measure of capacity)

Gigawatt hour - million kilowatt hours (measure of consumption)

Hydro system average capacity - maximum annual energy output which can be maintained by the hydro-electric part of the system at all times under the full range of catchment yields,

Installed capacity - the ma x imum continuous load that a generator can supply (usually measured in megawatts)

Kilowatt - 1000 watts (measure of capacity)

Kilowatt hour - 1000 watt hours (measure of consumption and usual commercial 'unit')

Load factor - the ratio of energy generated in a period to the

energy which would have been generated if the maximum load had been sustained throughout the period.

Major industrial load (MIL) - combined load of 17 major industries taking high voltage supply in large quantitie s under special contracts.

Major option- power station with aver a ge capacity greater than

about 120 MW.

264

Megawatt - 1 000 000 watts (measure of capacity)

Megawatt hour - 1 000 000 watt hours (measure of consumption)

Megawatt average (MW av.) - 8 760 000 kilowatt hours per annum

Minor option - power station with average capacity less than about 80 MW.

Nominal peak capacity - the maximum rate at which the system or a power station can supply electrical energy

Peak capacity (actual or effective) - the maximum rate at which the system or power station actually suppli es electrical energy

Peak load - energy for that portion of the load on an

electricity syst em which is commonly substantial but of short duration.

Power - the rate at which electrical energy is produced or consumed (measured in watts or, more conveniently, in kilowatts or megawatts)

Total system average capacity - maximum annual energy output which can be maintained by the total system (thermal and hydro-electric components)

watt - basic unit of power (meas ure of capacity or rate of doing

work)

Watt hour - amount of power ge ner a ted or consumed in one hour

265