Energy in Victoria (Australia)

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500 kilovolt transmission lines to the north of Melbourne

The primary energy source for the generation of electricity in the State of Victoria is brown coal - one of the largest contributors to Australia's total domestic greenhouse gas emissions and a source of huge controversy for the country. Australia is one the highest polluters of greenhouse gas per capita in the world. Brown coal is used for the generation of approximately 85 percent[1] of Victoria's household, commercial and industrial electricity consumption. The remainder is sourced from natural gas and renewable energy sources - hydro, wind and solar.


A map of major urban areas, coal-fired power stations and mines in the Latrobe Valley.

The first electricity supplies to Melbourne were provided by private companies, with a number of small power stations such as those at Spencer Street and Richmond operating. 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 MCG 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 source of street lighting in Melbourne until 1894 when the Spencer Street power station was constructed 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. Councils that set up their own distribution networks included 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).[2] These small operations were merged into the State Electricity Commission of Victoria that was formed in 1921,[b] the SECV also building the first of many brown coal fired power stations at Yallourn in the Latrobe Valley. The responsibilities of the SECV were privatised between 1995 and 1999. In the urban area, the largest power station is the Newport Power Station located close to the mouth of the Yarra River, the stack of which dominates the skyline of the inner western suburbs.[3]


Coal fuelled generators[edit]

Yallourn W Power Station viewed from the south

Initial power generation in Victoria was provided by a number of small companies, with work on a state wide network beginning in the 1920s under the State Electricity Commission of Victoria. The commission planned capacity upgrades many years in advance, with major base load power plants built at Yallourn, Hazelwood and Loy Yang.

At present, most electricity in Victoria is generated by burning brown coal in thermal power stations in the Latrobe Valley. One of the major electricity consumers in Victoria is the aluminium smelter at Portland.

Unlike many other states, the major coalfields of Victoria contain brown coal, a fuel high in ash and water, and generally unsuitable for combustion without specialized 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.

It was not until the 1920s that the Latrobe Valley coalfields were fully exploited for power generation, when the State Electricity Commission of Victoria built the Yallourn Power Station and associated open cut mine. Since then two more open cut mines have opened in the valley, feeding power stations at Hazelwood and Loy Yang.

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. Both were wound up in the early 20th century. The Anglesea coalfield has been mined for Alcoa's Anglesea Power Station since the 1960s.

In 2001-02, the Latrobe Valley produced 98.5% of Australia’s total brown coal production of 66.7 Mt.[4]

Brown coal has 3 times the climate change and global warming causing GHG emissions per KWh of electricity produced as natural gas. Hazelwood is commonly regarded as the most greenhouse gas polluting power station in Australia. If as is expected after the release of the report of the Garnaut Climate Change Review a cap and trade emissions trading scheme is adopted to reduce the effects of global warming on Australia, electricity produced by burning brown coal will be expected to increase significantly in price.

Coal mines in Victoria currently operating:

Mine Location Owner Lat & Long Type of Coal Tons Mined PA Major Buyers Major Method
Yallourn Yallourn EnergyAustralia ? Lignite ? Yallourn Power Station Open Cut
Morwell Morwell International Power ? Lignite ? Hazelwood Power Station,
Energy Brix
Open Cut
Anglesea Anglesea Alcoa ? Lignite ? Anglesea Power Station Open Cut
Loy Yang "A" Traralgon AGL Loy Yang ? Lignite ? Loy Yang Power Station Open Cut


Dartmouth Dam wall and power station

Victoria has a limited hydroelectric power generation system due to the limited water resources.

The Rubicon Hydroelectric Scheme was completed by the State Electricity Commission of Victoria in 1924, and was an important component of the state electrical grid at the time. It was later followed by the Kiewa Hydroelectric Scheme that was constructed between 1938 and 1961, the Eildon Power Station in 1956, Victoria's involvement in the Snowy Mountains Scheme that was built from the 1950s to 1970s, and the Dartmouth Power Station in 1981.


The 1.5MW solar concentration power station demonstration facility in Mildura

Small-scale personal, commercial and community roof-mounted systems are becoming more prevalent. A large-scale solar energy project located in Mildura is under construction.


Windfarm outside Port Fairy

Trials of wind power in Victoria commenced in 1987, when the State Electricity Commission of Victoria erected a 60 kW capacity Westwind wind generator at Breamlea as a demonstration project. The generator was sold to a private group in 1994 with the privatisation of the SECV.[5] It was not until the early 2000s that the commercial use of wind power for electricity commenced. Wind farms at Codrington, Challicum Hills and Portland were all built by private companies with State Government funding assistance.[6]

By October 2011 there were eight operating wind farms with 428MW of capacity. The development of new wind farms in Victoria became much harder following the election of the Baillieu government who amended the planning scheme in August 2011 to give any landholder within two kilometres a power of veto over a project. This is an unprecedented planning doctrine and according to wind power companies, this change has threatened the viability of investment in the state.[7]

As of October 2014, wind farm capacity had increased to 1,080 MW.[8]


Due to the low energy value of raw brown coal, long distance transport of the fuel was not economic. As a result, the State Electricity Commission of Victoria used German technology to produce hard briquettes from Latrobe Valley brown coal. The initial plant was established in the 1920s at Yallourn, with a second opening at Morwell in the 1940s. These plants crushed, dried and pressed brown coal to extract the water, and form a hard fast-burning block that was easy to transport.

The SECV encouraged the use of briquettes in both industrial and domestic cooking and heating, as a replacement for imported black coal. Briquettes were also used in a number of peak load thermal power stations that were located away from the Latrobe Valley. Briquette usage in Victoria today has dropped since the introduction of natural gas to the state, but the Morwell Energy Brix factory remains today.


Supply of town gas to Melbourne was initially provided by private companies such as the Melbourne Metropolitan Gas Company from the 1850s, with gasworks being scattered throughout the suburbs. The Gas and Fuel Corporation of Victoria was formed in 1951 to manage gas supply state wide, and to build a centralised gasworks at Morwell. The discovery of natural gas in Bass Strait in the 1960s saw gas supplies converted to the new fuel by the 1970s.[9] The Gas and Fuel Corporation was privatised in the late 1990s.[10] Town gas production in Victoria started in the 1850 to supply gas for lighting, heating, and cooking. It was originally the domain of many private companies, who all operated their own small gasworks which converted black coal into gas. The Gas and Fuel Corporation of Victoria was formed in 1950, and built a centralised brown coal gasification plant at Morwell. The plant opened in 1956 and used the German Lurgi process to produce gas that was transferred to Melbourne via a high pressure gas pipeline.[11]

The production of town gas was changed in the late 1950s when Syngas production was developed, a process that converted waste gases from oil refineries to a useful energy product.[11] The final blow to gas production was in 1965 when natural gas was discovered in Bass Strait, with the majority of Victoria changed over by the 1970s.

The search for natural gas in Bass Strait off Gippsland commenced in the mid-1960s by Esso Australia and BHP. The floating rig Glomar III was used for exploration drilling, which begun on 27 December 1964. After two months gas was struck, and by June 1965 it was confirmed a major gas field had been found. Known as the Barracouta field, discovery of the Marlin field followed in March 1966.[12] Both of these fields use offshore drilling rigs as a production base. By 1969 the production plant and distribution network were complete, allowing natural gas to be sold to consumers.[13]

Additional gas reserves were discovered offshore from the Otway Ranges in recent years. BHP Billiton discovered the Minerva gas field 1993, with production commencing in 2004.[14] The Santos Ltd. operated Casino field was discovered in 2002, and started production in 2006.[15] In 2002 Woodside Petroleum prepared to develop their Geographe and Thylacine gas fields.[16] These newer gas fields use undersea wellheads connected to the shore and production facilities with pipelines, minimising the visual impact on the coastline.

Today approximately 1.5 million domestic customers in Victoria are supplied with gas via over 25,000 kilometres of mains. Industrial and commercial consumers account for nearly 50 per cent of gas sales.[13] In the 2005/2006 fiscal year, the average gas production in Victoria was over 700 million cubic feet (20,000,000 m3) per day and represented 18% of the total national gas sales, with demand growing at 2% a year.[17]


Oil was first discovered in the Gippsland Basin under Bass Strait by Esso Australia and BHP in March 1966 in what is now the Marlin field. By early 1968, the Halibut and Kingfish oil fields were discovered nearby. Production from the fields was estimated at up to 300,000 barrels (48,000 m3) per day,[12] with recoverable reserves in the Gippsland Basin in the region of 4 billion barrels (640,000,000 m3).[18]

In 1985, oil production from the Gippsland Basin peaked to an annual average of 450,000 barrels (72,000 m3) per day. In 2005-2006, the average daily oil production declined to 83,000 bbl/d (13,200 m3/d), but despite the decline Victoria still produces almost 19.5% of crude oil in Australia.[17]

See also[edit]


Further reading[edit]

  • Edwards, Cecil (1969). Brown Power. A jubilee history of the SECV. State Electricity Commission of Victoria. 
  • Gill, Herman (1949). Three Decades: The story of the State Electricity Commission of Victoria from its inception to December 1948. Hutchinson & Co. 
  • Jack Vines (2008). "Coal Mining Heritage Study". Heritage Victoria. Retrieved 2010-03-06.