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Energy in Tasmania

Where does our energy come from in Tasmania?

Tasmania has taken advantage of its abundant renewable energy resources and is the leader within Australia in the use of renewable energy technologies such as hydro and wind. Other forms of renewable energy used in Tasmania include wood, landfill gas, biofuels and more recently solar photovoltaics and solar hot water. Significant potential exists for geothermal, wave and tidal energy in Tasmania. Other forms of energy used in Tasmania include petroleum products, natural gas and coal.

Electricity is a major source of energy in Tasmania and is derived from a range of energy sources, with hydro being the dominant source, but also including natural gas, wind, landfill gas and solar photovolatics. The completion of Basslink in 2005 enabled Tasmania to both export and import electricity to/from Victoria. Natural gas is also imported into Tasmania via a gas pipeline from Victoria under Bass Strait. All petroleum products used in Tasmania are also imported via tankers from Australian and overseas oil refineries.

The relative contribution of each of these energy sources is indicated in the Tasmanian Energy Flows 2010-11 diagram.

How is energy used in Tasmania?

The Tasmanian Energy Flows 2010-11 diagram also provides an indication of the relative utilisation of energy in each end use sector. The industrial sector is the dominant energy user, with electricity being the dominant energy source.  More than half of Tasmania's electricity is consumed by around half a dozen major industrial customers. The transport sector is the next largest energy user, with virtually all energy sourced from imported petroleum products, followed by the residential and commercial end use sectors. See also: Tasmanian Electricity Supply by Source Graph - 2000 to 2012.  

Tasmanian Energy Supply Sources

  • Hydro
  • Wind
  • Solar Photovoltaics (PV)  
  • Solar Hot Water
  • Wood
  • Coal
  • Petroleum Products  
  • Landfill Gas   
  • Natural Gas
  • Basslink
  • Bioenergy
  • Geothermal
  • Wave and Tidal 
  • Hydro

    Tasmania is unique within Australia as the only State that generates the majority of its electricity from hydro-electric power schemes.

    Hydro has been the predominant source of electricity in Tasmania since the first power stations were built in the early 1900's.

    To date, there are thirty hydro-electricity power plants in six different catchment areas throughout Tasmania.

    These catchment areas are:

    • Great Lake - South Esk
    • Derwent
    • Mersey Forth
    • Gordon - Pedder
    • Pieman - Anthony
    • King - Yolande

    The State's hydro-electric resources are managed by Hydro Tasmania, a State-owned Company. Further information regarding Hydro Tasmania's hydro-electricity system can be found on their website.



    Lying in the path of the Roaring Forties - the prevailing westerly winds that circle the earth's mid southern latitudes - Tasmania has world class resources for the generation of wind power.

    Hydro Tasmania has an association with the large wind farms either operating or under construction in Tasmania.  The 140 MW Woolnorth Wind Farm site is located on the historic 'Woolnorth' grazing property on the far north-west tip of Tasmania. The three stage project was completed in May 2007 and at that time was the largest wind farm operating in the southern hemisphere. Woolnorth Wind Farm is 75% owned by Guohua Energy Investment Co. Ltd and 25% owned by Hydro Tasmania.

    Hydro Tasmania built Australia's second commercial wind farm at Huxley Hill on King Island in 1998. The 750kW wind farm was expanded to 2.45MW in 2003 and will be further expanded by up to an additional 4MW in 2013 as part of the King Island Renewable Energy Integration Project which will see more than 65% of King Island's electricity needs met by renewable energy and reduce carbon emissions by more than 95%.

    An exciting potential new wind farm development on King Island has been announced by Hydro Tasmania. The proposed 400 MW 'TasWind' wind farm would be the largest in the southern hemisphere and would link directly to the Victorian grid via an undersea DC cable. The project is currently at the pre-feasibility stage, which involves extensive community consultation. Importantly, the project will only proceed with the broad support of King Island residents.

    The 168 MW Musselroe Wind Farm located in the north-east of Tasmania is currently under construction by Hydro Tasmania and is due for completion in mid 2013. Further information on Hydro Tasmania's wind farms can be found on their website.

    Not all wind developments have been large scale. There is increasing interest in smaller developments such as the 225 kW wind turbine at Nichols Poultry farm in Sassafras which was installed in 2008. The wind turbine is known as an embedded generator as it is connected to the distribution network. Wind output from the turbine is used wholly on site and according to Nichols Poultry has reduced annual energy costs by around 50 per cent.


    Solar Photovoltaics (PV)

    While Tasmania's solar resource is lower than in other parts of Australia, it is actually higher than many people may realise. For example a 2 kW grid connect PV system, which is the average size of a residential system in Tasmania, will generate around 7 kWh a day on average. The same size system will generate 8 kWh per day in Sydney and 10 kWh per day in Alice Springs which has one of the best solar resources in the world. In contrast, the same 2 kW system in Germany would only generate around 5 kWh per day on average.  (Despite Germany's relatively poor solar resource, they have the largest installed photovoltaic capacity of any country in the world.)

    Until 2008, the majority of solar PV installations were associated with off-grid applications such as remote households and commercial facilities. Since 2008, the uptake of grid connect solar PV systems has increased dramatically. Australia wide, grid-connected solar PV systems now represent more than 90 per cent of all solar PV applications. The majority of these are installed at residential dwellings. The increased capacity has been due to:

    • Large reductions in PV costs
    • Access to government assistance through Small-scale Technology Certificates (STCs) and feed-in tariff schemes (which were overly generous in some jurisdictions and have recently been wound back) and
    • Increases in the price of electricity.

    There has also been a dramatic increase in the level of uptake of solar PV systems in Tasmania as shown in the figure below.

     Installed capacity of grid-connected solar-PV systems in Tasmania

    Solar PV generation can offer peak demand reduction benefits in mainland regions with peak demand driven by hot summer afternoons.  However, Tasmanian peak demand is driven by cold winter evenings when solar PV output is negligible.

    Click here to find information on available assistance to install PV systems.


    Solar Hot Water

    Water heating accounts for around one third of overall residential energy requirements in Tasmania.  The use of solar to heat water can significantly reduce a household's energy consumption. For example, it is estimated that a typical solar hot water system in Tasmania reduces demand by approximately 1 800 kWh per year.

    A typical system will provide virtually all hot water requirements in summer, with boosting (typically electric but gas and wood can also be used) usually required at other times of year.

    Solar hot water can act as a form of renewable energy storage due to the ability of water to retain its heat for long periods. With the adoption of appropriate incentives such as time of use (ToU) tariffs, solar hot water can help reduce peak demand by reducing or avoiding the need for electric hot water heating during peak times. Another benefit is that solar hot water causes no network control issues, unlike some embedded electrical generators.

    The number of installed solar hot water systems in Tasmania is shown in the figure below.

     Cumulative number of installed solar hot water systems in Tasmania

    Click here to find information on available assistance to install solar hot water systems.



    Wood is a significant energy source in Tasmania and is responsible for around 10 per cent of the state's total energy consumption.

    Wood is used predominantly in the residential sector, where it is used mainly for space heating, with other uses including cooking and heating water.  A recent survey by the Australian Bureau of Statistics indicated that just under 30 per cent of Tasmanian households use wood as their primary source of heating.  Interestingly the combustion of wood accounts for a similar amount of energy consumption in the residential sector as electricity. It is important however to consider that wood is converted to useful energy (ie heat energy in the home) less efficiently than the conversion of electrical energy to useful energy in most appliances, particularly reverse cycle space heaters.

    Industrial use of wood as an energy source is predominantly associated with burning wood waste to heat kilns to dry timber. There has been a decline in industrial combustion of wood in recent years which is reflective of the general decline in the Tasmanian timber industry over this time.

    Small amounts of wood are used in the commercial sector, predominantly for space heating and cooking; for example wood-heaters in pubs, or wood-fired pizza ovens in restaurants.

    The supply and sale of wood is not regulated in Tasmania. However, emissions from domestic and commercial wood-heaters, fireplaces and barbeques are regulated under the Environmental Management and Pollution Control (Distributed Atmospheric Emissions) Regulations 2007. These regulations are designed to control the amount of particulate emissions from these appliances.



    There is a long history of coal mining and use in Tasmania which continues through to the current day. Tasmanian coal resources are concentrated mainly in the Fingal region in the state's north east, with mining operations mainly located in this area. Currently there are no Tasmanian coal exports, with all mined coal used almost exclusively by a small number of industrial customers.

    The Cornwall Coal Company (a subsidiary of Cement Australia) is the only supplier of coal mined in Tasmania.  Bituminous coal is mined at the Duncan colliery (near Fingal), the Blackwood colliery (near St Marys) - both underground operations - and from two open cut mines, the Cullenswood Mine near St Marys and the Kimbolton mine near Hamilton. The raw coal from these mines is transported to the Fingal Washery where it is washed to produce a saleable product.

    The coal currently mined in Tasmania is a high ash, low thermal value coal, best suited to cement manufacture. The main consumer is the cement manufacturing plant at Railton with the other significant user being the Norske Skog paper manufacturing plant at Boyer. In each of these facilities the combustion of coal is used to provide process heat. All coal mined in Tasmania is used within the state.

    There has been a recent significant decline in the consumption of coal in Tasmania. This has been driven partly by the availability of natural gas which a number of facilities that previously used coal have converted to, such as the Simplot vegetable processing factory, the Cascade Brewery, Cadbury chocolate factory and the Fonterra dairy processing plant at Spreyton.


    Petroleum Products

    Around 35 per cent of Tasmania's total energy consumption is attributable to the use of petroleum products. They are also one of the main sources of greenhouse gas emissions in Tasmania. Something to think about is that perhaps the single most important contribution Tasmanians can make to reducing greenhouse gas emissions is to reduce their car travel and use fuel efficient vehicles.

    Australia's crude oil reserves are relatively limited. Consequently Australia is a net importer of crude oil and petroleum products, and imports continue to increase relative to exports. Along with this, domestic refining capacity has declined, whilst domestic consumption has increased. Tasmania has no refining facilities. Consequently all petroleum products are imported into the state.

    Unleaded petrol and diesel are the dominant petroleum fuels consumed in Tasmania, mainly within the transport sector, and consumption of these fuels has been increasing over the past decade. Petrol is used almost exclusively in the transport sector by cars and light commercial vehicles. Similarly, the transport sector accounts for most diesel use with consumption dominated by heavy and medium duty trucks, light commercial vehicles and buses.

    Diesel is the dominant fuel used in the agriculture, forestry and fishing, mining and construction industries, with significant increases in consumption across all of these sectors over the last decade. Significant amounts of diesel are also consumed in the manufacturing and electricity services sectors. Diesel powered generators are responsible for the majority of electricity generation on the Bass Strait Islands including Cape Barren Island, although increasing levels of renewable generation have significantly reduced diesel consumption.

    There are also significant amounts of LPG fuel consumption in Tasmania, in commercial and industrial applications (including use by forklifts), in the automotive sector as a transport fuel, and in the residential sector for heating and cooking.

    There are five liquid fuel storage terminals in Tasmania, two in Hobart and one each at Bell Bay, Devonport and Burnie. The total petroleum storage capacity for Tasmania is approximately 165 megalitres which is sufficient to maintain supply needs in Tasmania for approximately three months. In addition there are two main LPG storage facilities in Tasmania located at Devonport and Hobart, with a combined storage capacity of 3,800 tonnes. Petroleum storages are re-supplied by tanker at least on a monthly basis.


    Landfill Gas

    There are three landfill gas generators in Tasmania, located at the South Hobart, Glenorchy and Launceston landfill sites, with a combined generation capacity of just over 5 MW. These facilities work by collecting methane released by decaying organic materials through a series of pipes located within the landfill. The collected methane is combusted in an engine, with generated electricity exported into the distribution network. In addition to generating electricity, a major benefit of landfill gas generators is that they significantly reduce greenhouse gas emissions by reducing the amount of methane (which is around 21 times more potent as a greenhouse gas than carbon dioxide) released from the landfill site.


    Natural Gas

    Natural gas was first introduced to Tasmania in 2002 with the construction of the Tasmanian Gas Pipeline (TGP) which consists of an undersea pipe from Longford in Victoria to Bell Bay in Tasmania and land based transmission infrastructure continuing south to Bridgewater and along the north west coast to Port Latta. The TGP is connected to the Tamar Valley Power Station (which accounts for around 80 per cent of Tasmanian natural gas consumption) and major industrial customers including the Comalco Bell Bay aluminium smelter and Australian Bulk Minerals' iron ore processing facility at Port Latta. Palisade Investment Partners are the current owners of the TGP.

    The natural gas distribution network was then progressively rolled out with the assistance of the Tasmanian Government to small and medium sized commercial customers and domestic customers in parts of major population centres and to specific commercial sites. The distribution network now fronts more than 40 000 homes and 4 000 businesses. The distribution network is currently owned by Tas Gas Networks Pty Ltd (TGN), with further expansion of the network a commercial decision for TGN.

    The most recent expansion of the distribution network involved the connection of a natural gas fired cogeneration plant and gas fired boilers at the Simplot vegetable processing factory in Ulverstone. A $2 million grant from the Tasmanian Government ensured the four kilometre extension of the natural gas supply network has sufficient capacity to provide Ulverstone with a reticulated natural gas network in the future should it prove economically feasible.

    Other recent developments include the installation of a fast-fill compressed natural gas (CNG) facility by TGN at Selfs Point for commercial CNG vehicles, and a micro liquefied natural gas (LNG) plant near Westbury owned by BOC for use by the heavy transport sector. Importantly, the use of CNG and LNG instead of diesel significantly reduces transport greenhouse gas emissions.

    There has been a steady increase in the number of natural gas connections since natural gas was first introduced to Tasmania, with around 9 500 customers connected by the end of June 2012. This is quite low in comparison to many other locations in Australia, and is reflective of the relative infancy of the natural gas network in Tasmania.

    Click here for information on how to connect natural gas to your home or business.



    Basslink is an interconnector connecting the electricity grids of Tasmania and Victoria which commenced operation in 2006. It runs from Loy Yang in Victoria, across Bass Strait to Bell Bay in Tasmania. The 290 km undersea cable component of Basslink is the longest of its type in the world. Basslink is owned and operated by Basslink Pty Ltd which in turn is owned by CitySpring Infrastructure Trust, a Singaporean company.

    The Basslink interconnector is a high voltage direct current link with a continuous rating of 480 MW. However, its 'dynamic rating' enables the link to operate for periods at higher capacity. The link can operate at up to 600 MW for up to 10 hours, providing that it is 'pre-cooled' (6 hours at no more than 300 MW). The Tasmanian system will generally be able to accommodate the link exporting up to its 600 MW limit and importing up to a maximum of approximately 480 MW. Importing is constrained by system security considerations in the relatively small Tasmanian grid.

    Basslink enables Tasmania to trade electricity with the mainland electricity grid, with trading opportunities created by the difference in prices between Tasmanian and Victorian NEM regions, coupled with Tasmania's flexible hydro generating system. The economic case is based on Tasmania exporting electricity when prices are higher in the Victorian region (for example, due to high demand caused by hot weather) and importing electricity during lower price periods to ensure adequate hydro storage levels are maintained.

    In addition, Basslink enhances security of supply on both sides of Bass Strait. In Tasmania it provides protection against the risk of energy shortages caused by prolonged droughts over hydro catchment areas, by offering an additional source of electricity supply. In Victoria it provides an additional 600MW of capacity to meet peak load demands. The increased capacity and security of supply in Tasmania removes a constraint on industry growth in Tasmania.



    There are many types of bioenergy, with the most common and well known form being the combustion of wood to provide heat. Essentially any form of organic material can be utilised (such as dedicated energy crops or the residues of food or commercial crops) to provide various forms of energy (such as heat, electricity or liquid biofuels).

    For example, Macquarie Oil has recently commissioned a biodiesel plant in Cressy in northern Tasmania. The biodiesel is produced from pressed poppy seeds which are left over after the opiate crop is harvested. The plant is expected to produce up to three million litres per year of biodiesel which can be used as a substitute fuel for regular diesel. Environmental benefits of the biodiesel plant include:

    • The production of a valuable fuel from a product that would otherwise be wasted;
    • Reduced greenhouse gas emissions associated with the use of biodiesel produced from renewable poppy crops rather than diesel derived from fossil fuels.



    Geothermal energy has the potential to produce large quantities of emission free, renewable and sustainable energy on a fairly constant basis.

    Initial investigations have indicateded significant geothermal energy reserves are located in Tasmania. For example, KUTh Energy has undertaken an extensive geothermal resource exploration program and identified promising sites in a number of regions in eastern Tasmania.

    Tasmania has an advantage that, unlike the larger mainland States, any geothermal developments are likely to be relatively close to a high voltage transmission line which is relevant to the costs of connecting to the Tasmanian electricity grid.


    Wave and Tidal

    A number of proponents have shown a keen interest in accessing Tasmania's excellent wave and tidal resources for the development of wave and tidal power schemes in the State. Potential areas for development include the West Coast, the Tamar River and areas within Bass Strait.