Tasmania’s renewables look shaky given dry conditions and electricity imports

Tasmania is on track to hit a 15-year low in renewable energy generation – threatening the state’s claim to be “100 per cent renewable”.

The driest year since 1934 in Hydro Tasmania’s catchments has forced the generator to scale back production in a bid to save water.

To meet the state’s energy needs, the state has increased gas consumption and is importing more energy than ever before from the mainland.

So far in 2024, Tasmanian renewable energy generation from solar, hydro and wind power equals just 79 per cent of the state’s electricity demand, according to energy tracker OpenNEM.

That’s down from levels of 93 percent, 93 percent and 102 percent in the past three years.

One hundred percent renewable does not mean that all energy used in the state is renewable, but rather that the full capacity of the state’s renewable energy systems exceeds the amount of energy typically used in a year.

Sometimes Tasmania generates more than it uses and sells it to the national grid; sometimes it buys from the grid to meet its power needs.

But due to a lack of rain, Tasmania’s ‘battery’ – the dams – was not sufficiently charged.

Dry times take their toll

Hydro Tasmania’s 2023/2024 annual report notes below-average rainfall in most months.

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Solar energy use has grown steadily in Tasmania over the past decade and wind energy generation has increased – peaking last year.

The gas-powered Tamar Valley Power plant, which started up in June, is responsible for 5 percent of the state’s energy needs this year – the highest level since 2017.

Meanwhile, Basslink has been crucial in keeping the lights on, with a sixth of its energy consumption coming from net imports of electricity via the submarine cable to the mainland.

According to OpenNEM, by 2024, approximately one-third of the energy in the Victorian electricity grid will be generated from renewable energy sources.

Hydro manages ‘abnormal’ conditions

Hydro’s chief operating officer Jack Penny said dry conditions had been “abnormal” over the past year, but the generator had been able to maintain healthy water stores and report a $122 million dividend.

“Obviously, because we are a weather-dependent generator, dry years can be very challenging, but we have a number of different levers that we can pull to manage that and make sure we’re acting for Tasmanians,” Penny said .

He said Hydro was managing the impact of climate change, which he expected would result in greater rainfall variability.

“We have many different options to manage the portfolio going forward, and we are working very closely with experts to understand what that might look like.”

Hydro is currently putting together business cases for the expansion of the Tarraleah power station and a pumped hydro station at Lake Cethana.

Business demands more generation

Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said the low renewable energy generation figures were further evidence that Tasmania was in an “energy crisis”.

“Fundamentally, the most important thing we need in Tasmania now is more clean energy production on the island,” he said.

The last new wind farm in Tasmania opened in 2020 at the Port of Granville.

Mr Bailey said more projects have been held up by the ‘complex’ planning system, putting the target of reaching 200 per cent renewable energy by 2020 at risk.

A final investment decision on the first phase of the $4 billion Marinus Link cable is expected next year. If approved, this would increase capacity for trade with the mainland.

While initially billed as unlocking new renewable generation here, it is becoming increasingly important to Tasmania’s energy security, as evidenced by record imports to meet demand this year.

Mr Penny said Hydro was restricted by Basslink in the last six months of 2023, when it was paid to take energy.

Energy Minister Nick Duigan denied renewables made up 79 per cent of the state’s energy mix, but Hydro Tasmania confirmed this figure was accurate.

Mr Duigan also said the Government is establishing a dedicated approval pathway for renewable energy and is working with the Federal Government to improve and refine approval processes.

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