Energy in Victoria, Australia is generated using a number of fuels or technologies, including coal, natural gas and renewable energy sources. Brown coal, historically, was the main primary energy source for the generation of electricity in the state, accounting for about 85% of electricity generation in 2008. The amount of coal-fired power has decreased significantly with the closure in 2017 of the Hazelwood Power Station which supplied around 20% of Victoria's electricity, and to a lesser extent with the exit of Anglesea Power Station in 2015. Brown coal is one of the largest contributors to Australia's total domestic greenhouse gas emissions and a source of controversy for the country. Australia is one of the highest polluters of greenhouse gas per capita in the world.
In 2020, the Greenhouse gas co-efficient for Victoria as advised by the Essential Services Commission was 1.13 kg -e/kWh, making it the highest co-efficient for electricity generation in Australia.
Renewable energy supplies are a rapidly increasing fraction of Victoria's electricity. In 2021, 33% of electricity generation was from renewable sources. In 2022, the state government announced a target to increase that to 95% by 2035.
History Electricity
The first electricity supplies to Melbourne were generated and distributed by a number of private companies and municipal generator and distribution companies. The main municipal-owned power station in Victoria was operated by the Melbourne City Council, which generated electricity from its Spencer Street Power Station, which opened in 1892, for the city's residents, as well as being a wholesale supplier to other municipal distributors. The main privately owned company was the Melbourne Electric Supply Company which was established in 1899. The company operated the Richmond Power Station, which had been opened in 1891, and the Geelong Power Station.Public Records Office: Agency VA 1002: State Electricity Commission of Victoria It operated under franchise arrangements with a number of municipal distributors. The final major generator of electricity was the Victorian Railways which in 1918 opened the Newport Power Station, the largest power station in the urban area, to supply electricity as part of the electrification of Melbourne's suburban trains. These early generators all relied on fuel supplies from the strike prone black coal industry of New South Wales.
Early electricity production in Victoria used relatively simple technology, but transmission over even a short distance was difficult. Initially, it was used only for public events - such as the Duke of Edinburgh's visit in 1867 and a night football match at the Melbourne Cricket Ground in 1879 - and lighting in the theatre. Small scale generating plants were built in Melbourne to serve small areas and industries. However, gas remained the fuel for street lighting in Melbourne until 1894, after the construction of the Spencer Street Power Station by the Melbourne City Council. This power station generated enough power to light Melbourne's streets. Other councils embraced Melbourne's initiative and streets in many nearby areas - such as Richmond, Essendon, Hawthorn and South Yarra - were also lit by electricity by the late 1890s. Some councils set up their own distribution networks, including Footscray (1911), Brunswick (1912–13), Port Melbourne (1912–13), Preston (1912), Nunawading (1912), Northcote (1912), Coburg (1914), Heidelberg (1914), Williamstown (1915–16) and Doncaster (1916).Lincolne, G 'Electricity Supply in Victoria', p.41
The State Electricity Commission of Victoria (SECV) was formed in 1921 to merge these small operations. In the 1920s the SECV investigated hydroelectric power generation, in parallel with work on brown coal fired power stations at Yallourn. In 1922 a report was delivered by Messrs J.M. and H.E. Coane relating to the development of potential hydro-electric power on the Goulburn River and the Cerberean Range. Their findings were then submitted to the Parliament of Victoria for funding, with the more cost effective project approved in 1922, and the Rubicon Hydroelectric Scheme commenced in that year. For the first ten years of its operation it supplied on average 16.9% of electricity generated by the SECV.
The SECV took over a number of small municipal electricity distributors during the 1920s, and in the 1930s the Melbourne Electric Supply Company was acquired along with its street tramway operations. Despite these acquisitions, municipal controlled distribution companies known as Municipal Electricity Undertakings (MEUs) in the inner urban areas of Melbourne remained outside of SECV control until the privatisation of the industry in the 1990s.
The first electric tram in Melbourne was built in 1889 by the Box Hill and Doncaster Tramway Company Limited, an enterprise which failed in 1896. Electric trams returned in 1906, with the opening of the Victorian Railways' Electric Street Railway from St Kilda to Brighton, and was followed in the same year with the opening of the North Melbourne Electric Tramway & Lighting Company system, which opened two lines from the cable tram terminus at Flemington Bridge to Essendon and Saltwater River (now Maribyrnong River). The NMELT was an electricity and tramway company that operated from 1906 to 1922. The electricity section was taken over by the SECV in 1922. The Melbourne & Metropolitan Tramways Board (MMTB) was formed in 1919 and took over all cable and electric trams in Melbourne. The MMTB extended the electric lines, and from 1924 progressively converted the existing cable system to electric traction. By 1940 all Melbourne cable tram had been converted to electric traction. The electrification of the Melbourne railway network took place in the 1920s.
The SECV built the open cut mine in the Latrobe Valley and opened the first of many brown coal fired power stations in the Latrobe Valley. Yallourn Power Station was built progressively from the 1920s to the 1960s. Since then the SECV opened two more open cut mines in the valley, feeding power stations at Hazelwood and Loy Yang.
The responsibilities of the SECV were privatised between 1995 and 1999. In 1936, Geelong was connected to the state electrical grid, and by the 1960s Geelong A had closed. Geelong B remained for a few more years being used for peak loads only, but closed in 1970 due to the much higher efficiency of the new power stations in the Latrobe Valley. Richmond Power Station closed in 1976 and Spencer Street Power Station closed in 1982. Newport Power Station closed in the 1980s. Hazelwood Power Station closed in 2017.
On 10 March 2021, EnergyAustralia announced that it will close the Yallourn Power Station in mid-2028, four years ahead of schedule, and instead build a 350-megawatt power-generating battery in the Latrobe Valley by the end of 2026. At the time, Yallourn produced about 20% of Victoria's electricity. Minister for Energy Lily D'Ambrosio said she anticipated by mid-2028 an influx of renewable energy into the national energy grid. When Engie shut down the Hazelwood Power Station in March 2017, with only six months’ notice, wholesale prices in Victoria were up 85% on 2016, according to the Australian Energy Regulator, and for the first time in almost a decade, the state relied on energy from interstate to meet its needs.Government confident power bills won’t soar after Yallourn shuts
In the lead-up to the 2022 Victorian state election, Labor Premier Daniel Andrews committed to reviving the State Electricity Commission if re-elected.Privatisation has failed: Andrews hits back after Kennett attack on energy plan The Age 23 October 2022Vic plan to revive public energy ownership Queanbeyan Age 20 October 2022Victoria set to re-enter electricity market after setting 95% renewable energy target The Guardian 20 October 2022 The government would have a 51% shareholding in the new State Electricity Commission.Daniel Andrews makes State Electricity Commission election pledge as Victoria unveils new renewable targets Sky News Australia 20 October 2022
Andrews committed to amending the state’s constitution to protect public ownership of the revived State Electricity Commission if re-elected, to make it harder, although not impossible, for it to be privatised again in the future. Re-privatising the commission after such legislation would require a "special majority" of 60% of both the Legislative Assembly and Legislative Council, a situation which already exists for any potential privatisation of water services in Victoria under the Constitution of Victoria.
Electricity generation
Victoria is a participant in the National Electricity Market, and the Victorian electricity grid has substantial interconnections with New South Wales (through multiple land-based connectors), Tasmania (through Basslink) and South Australia (through the Heywood Interconnector). Victoria has historically been a net exporter of electricity, though interstate trade generally represents a relatively small proportion of total energy generation.
Coal-fired generators
As of 2022, the majority of electricity in Victoria is generated by three brown coal-fired thermal power stations in the Latrobe Valley: Loy Yang A and B, and Yallourn. Originally commissioned by the SECV, they were privatised by the Kennett government in 1995 along the rest of Victoria's generation and distribution infrastructure.
The largest single electricity consumer in Victoria is the Portland aluminium smelter.
Unlike many other states, the major coalfields of Victoria contain brown coal. The high water content of this coal makes it less suited for combustion without specialised technology. As a result, in the early years of Victoria the state was dependent on black coal imports from New South Wales for its fuel needs. In general, Latrobe Valley brown coal has a low ash content. The ash constituents vary significantly across the region but various silicates and oxides (Mg, Fe, Al, Ca and Na) are typical.
In the 1920s the Latrobe Valley coalfields began to be exploited for power generation.
Additional brown coal reserves were at Altona, and Anglesea, and black coal in the Strzelecki Ranges in South Gippsland. Both the Altona and Strzelecki Ranges coalfields were small in size, and required underground mining. Production in these mines increased into the early 20th century. The Anglesea coalfield has been mined for Alcoa's Anglesea Power Station since the 1960s, before both the power station and coalfield were shut in 2015. The amount of coal-fired power has decreased significantly with the closure in 2017 of the Hazelwood Power Station which supplied around 20% of Victoria's electricity consumption, and to a lesser extent with the exit of Anglesea Power Station in 2015.
In 2013/14, the Latrobe Valley produced 98.5% of Australia's total brown coal production at 57.8 Mt, down from 66.7 Mt in 2001/02.
Coal mines in Victoria operating in 2019 are: MineLocationOwner Lat & Long Type of CoalTons Mined PAMajor Buyers Major MethodYallourn YallournEnergyAustralia-38.183,146.384Lignite?Yallourn Power StationOpen CutLoy Yang "A"TraralgonAGL Energy Loy Yang-38.232,146.571Lignite?Loy Yang Power StationOpen Cut
A short-lived carbon pricing system was introduced by the federal government in 2011 and repealed in 2014, so the high emissions intensity of the brown coal plants does not result in any direct financial difficulties for their owners. However, as in most of the world, new-build coal plants are financially unattractive compared to renewable energy.
Yallourn power station is scheduled to close in 2028. Loy Yang A and B are currently scheduled to operate into the 2040s, according to their owners; however, observers expect Loy Yang's retirement to be accelerated due to competition from renewables and future government policy to reduce emissions.
Renewable energy