Independent Review into the Future Security of the National Electricity Market Blueprint for the Future, Jun 2017

List of acronyms

AC Alternating current

AEMC Australian Energy Market Commission

AEMO Australian Energy Market Operator

AER Australian Energy Regulator

COAG Council of Australian Governments

CCGT Combined cycle gas turbine

CCS Carbon capture and storage

CET Clean Energy Target

CO₂ Carbon dioxide

CO₂-e Carbon dioxide equivalent

CSG Coal seam gas

DC Direct current

DER Distributed energy resources

DNSP Distribution network service provider

EIS Emissions Intensity Scheme

ESB Energy Security Board

FFR Fast frequency response

GJ Gigajoules

GW Gigawatt

GWh Gigawatt-hours

kW Kilowatt

kWh Kilowatt-hours

LNG Liquefied natural gas

MW Megawatts

MWh Megawatt-hours

NEL National Electricity Law

NEM National Electricity Market

OCGT Open cycle gas turbine

PJ Petajoules

TNSP Transmission network service provider

VRE Variable renewable electricity

APPENDIX A – Levelised cost of electricity

The levelised cost of electricity (LCOE) is a measure of the average cost of producing electricity from a specific generating technology. It represents the cost per megawatt-hour (MWh) of building and operating a generating plant in order to breakeven over an assumed financial life. Key inputs to calculating the LCOEs include capital costs, fuel costs, fixed and variable operating and maintenance (O&M) costs, financing costs, and assumed usage rates for each technology type. The LCOEs do not include transmission or distribution costs.

Figure A.1 shows the estimated LCOE for key technologies based on input assumptions used by Jacobs in its modelling of the electricity sector.

It is important to note that actual investment decisions are affected by the specific technological and regional characteristics of a project and the level of profit the project expects to earn, which involve numerous other factors not reflected in the LCOE values.

Figure A.1: Levelised cost of electricity⁴⁸⁷

Notes:

Numbers in Figure A.1 refer to the average.

For each generation technology shown in the chart, the range shows the lowest cost to the highest cost project available in Jacobs’ model, based on the input assumptions in the relevant year. The average is the average cost across the range of projects; it may not be the midpoint between the highest and lowest cost project.

Large-scale Solar Photovoltaic includes fixed plate, single and double axis tracking.

Large-scale Solar Photovoltaic with storage includes 3 hours storage at 100 per cent capacity.

Solar Thermal with storage includes 12 hours storage at 100 per cent capacity.

Cost of capital assumptions are consistent with those used in policy cases, that is, without the risk premium applied.

The assumptions for the electricity modelling were finalised in February 2017 and do not take into account recent reductions in technology costs (e.g. recent wind farm announcements).

APPENDIX B – EMISSIONS INTENSITY TABLE

Estimated Operating Emissions for New Power Stations⁴⁸⁸

Generation type	Estimated operating emissions as generated^489 (kg CO2-e/ MWh)
Subcritical brown coal	1,140
Supercritical brown coal	960
Subcritical black coal	940
Supercritical black coal (HELE)^490	860
Ultra-supercritical brown coal	845
Ultra-supercritical black coal (HELE)^491	700
Open cycle gas turbine (OCGT)	620
Combined cycle gas turbine (CCGT)	370
Wind	0
Hydro	0
Solar PV	0
Average NEM electricity grid emissions intensity	820^492