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Energy Supply Security

The Role for Government

Although the Government no longer owns or operates energy generating assets, one of its primary objectives is to ensure the ongoing security of Victoria's energy supplies. A key feature of this role is to maintain Victoria's reputation as a reliable and stable State for energy investment. The Government also plays an important role in managing energy supply emergencies.

Despite anticipated improvements in energy efficiency, Victoria's energy demands are projected to increase significantly over the next decade. Projections indicate that between 2006 and 2016 base load electricity demands will increase at about 1 per cent per year, summer peak electricity demands at about 2 per cent per year, and gas demands (including demand for gas used in electricity production) at about 0.8 per cent per year between 2007 and 2011.

The Government is facilitating further investment in energy generation to ensure the State has affordable and secure energy supplies.

In the last 12 months our capacity has increased by 10 per cent due to Basslink (a transmission line from Victoria to Tasmania) and a new power station at Laverton North coming on line.

Electricity Supply Security

Victoria's electricity market experiences short periods of very high demand - the top 1,000 Megawatts of demand occurs for less than 2 per cent of the year during the summer. This type of demand is primarily driven by the increased use of air-conditioning on very hot days and is referred to as 'peak' demand.

'Baseload' demand refers to average energy demand observed for around 60 per cent of the year. 'Intermediate' demand is observed for around 30 per cent of the year.

The National Electricity Market Management Company (NEMMCO) publishes its supply and demand projections for the National Electricity Market annually in its Statement of Opportunities.

There are a number of ways in which Victoria's growing electricity demands could be met in the future:

  • augmenting transmission interconnections between New South Wales, South Australia and Victoria
  • facilitating new investment in power stations in Victoria, and
  • increasing the uptake of energy efficiency and the use of demand side management techniques in the National Electricity Market (NEM).