The Owen Inquiry into the Supply of Electricity in NSW

Premier Morris Iemma has announced the appointment of Professor Anthony Owen to advise the New South Wales Government on its future base load electricity needs, particularly with reference to the potential need for a new base load power station.

Anthony Owen is a professor of Energy Economics at the Curtin University of Technology in Perth. He has held visiting appointments at British Columbia, Colorado and Leeds universities, at the UK Department of Energy and at the International Energy Agency in Paris.

The Government is seeking advice on how to best proceed to ensure that investment in generation capacity is made which both addresses greenhouse gas emissions while protecting the State’s fiscal position.

Professor Owen will prepare a report based on the following terms of reference:

  1. Review the need and timing for new base load generation that maintains both security of supply and competitively priced electricity.
  2. Examine the base load options available to efficiently meet any emerging generation needs.
  3. Review the timing and feasibility of technologies and/or measures available both nationally and internationally that reduce greenhouse gas emissions.
  4. Determine the conditions needed to ensure investment in any emerging generation, consistent with maintaining the AAA Credit Rating.

Premier Iemma said in Parliament: “Through his advice we want to test the proposition: Does NSW require base load generation capacity? If so, what is the most available, efficient and what is the cleanest technology to deliver that? And best to procure that and maintain the state‘s AAA credit rating.”

Policy details are not yet determined and will likely be informed by the results of Owen’s inquiry. Mr Iemma has said that “the Government goes into this review with an open mind, and only two things will be ruled out. The first is nuclear power.Second, there will be no sale of electricity generation, transmission or distribution. On all other matters I am yet to be convinced and will await Professor Owen’s expert advice.”

Mr Iemma has indicated that the likely fuel source is coal. He stated that if the station is coal powered, it will be ‘the cleanest coal that is available.’

This inquiry follows the identification by the National Electricity Market Management Company (NEMMCO) in February of a potential need for new base load electricity generating capacity in NSW from 2012-2013.

For the last twenty years, NSW has had surplus capacity in electricity generation. This excess has allowed NSW generators to trade electricity across the National Electricity Market (NEM). However, population and economic growth have steadily reduced this surplus capacity. This reduction has raised the issue of looking to the next major investment in base load generation for NSW.

With TRUenergy and Delta Electricity constructing gas-fired peaking power stations, the Government’s focus is now on the future of base load.

The Inquiry will receive public submissions until the end of June 2007. The Report to the NSW Government is due towards the end of August, 2007.