Transport and utilities
This chapter considers the implications of climate change for the types
of critical infrastructure that support essential services and economic
activity, and are otherwise important for modern life. Types of infrastructure
considered in this chapter include transportation, water supply and sewage, and
energy networks. However, this inquiry did not examine all types of essential
infrastructure—communications, for example, is not considered.
This chapter commences by briefly outlining some matters that are useful
to take into account when considering the implications of climate change for
transport and utilities. Following this, the chapter considers the following
categories of infrastructure in turn: transport, water supply and sewage, and
Many of the implications for infrastructure assets used for
transportation and utilities are the same as those buildings and communities
face generally; for example, sea level rises will have the same consequences
for essential infrastructure in low‑lying areas as it will for houses and
other buildings. As noted in Chapter 3, however, when considering the
implications of climate change for infrastructure it is critical to account for
the interconnectivities and interdependencies between different infrastructure
types. Utilities and transportation reveal these interdependencies most
clearly. For example, electricity is essential for many types of transportation
services to operate, such as metropolitan trains; however, resilient
transportation assets such as roads are also needed for accessing electricity
generation and network facilities and equipment.
It is also clear that outages of critical infrastructure can have
significant economic effects. For example, it is estimated that the January
2009 heatwave in Melbourne resulted in financial losses of approximately $800
million, primarily due to electricity outages and transport network disruption.
Another consideration is that assets used for transport and utilities
are intended to have a long economic life. This reinforces the need for careful
consideration of climate change issues in these sectors. As Dr Craig James from
If you're worrying about what crop to plant next season, you
don't have to worry about climate change. You have to worry about weather but
not climate change. If you're going to build an airport that you want to last 200 years—to
take the other ludicrously big extreme—then clearly you have to think about
flooding, sea level, wind loads, all sorts of things. You want to
future-proof that investment dramatically compared with what you might do
The long-term nature of transportation and utilities infrastructure can
present design challenges. Ms Megan Motto, Chief Executive Officer, Consult
Australia, observed that engineers can design for a specified end point,
however, 'we don't know what the end point will exactly be with regard to
temperature rise, sea-level rise, extreme weather conditions et cetera because
no parameters have been set at the upper limits'. Ms Motto argued that this
necessitates a 'precautionary approach rather than a risk management approach'
to infrastructure design.
Ms Motto also called for more information to be captured via
post-project reviews. Ms Motto commented:
We don't do very good post-project reviews in this country.
We don't look at what worked well and what didn't work well. There's often the
risk of project reviews being sidelined because of the exposure they would give
to something that could have gone better, particularly pointing to
accountability of some individuals or agencies when things have gone wrong or
might have gone better. The risk-averse nature of human beings means that we
don't necessarily want those exposed, yet they can tell us so much about how to
do things better in the future. So having a better approach to all aspects of
post-project reviews would be really fantastic.
Well-functioning transport networks are clearly vital for a wide range
of activities needed for modern society, including the facilitation of the
efficient movement of people; ensuring communities are supplied with essential
goods and services; for trade; and for economic activity generally.
The importance of transport infrastructure networks within Australia was
highlighted by the Northern Territory Government, which explained that the
Territory 'is heavily dependent on long distance road and rail freight for the
supply of essential goods'. The Government added that there are 'limited
alternative routes available in the event of infrastructure failure due to heat
stress or flooding'.
In addition to state and territory-wide implications, individual
communities can be particularly vulnerable to disruptions to regular transportation
networks. The Northern Territory Government noted that many remote coastal
and island communities in its jurisdiction are reliant on barge landings for a
wide variety of goods. For the coastal communities, road-based transportation
can be unavailable for lengthy periods during the wet season due to road
The assets that form transport networks vary significantly in size and
scale. For example, the resilience of small-scale local assets, such as coastal
trails, is not of national importance but can be of significant value for local
residents. At the other end of the spectrum are assets that have a high
economic value and make a significant contribution to the economy, such as
Sydney Airport, which in 2014 was estimated to contribute $30.8 billion in
economic activity per year and facilitated $14.6 billion in freight exports. Despite the gulf in the economic value of these examples of transportation assets,
they both are exposed to climate-related risks and careful planning is required
to ensure they are resilient to climate change.
Implications of climate change for
As this report has already noted, climate change is projected to result
in extreme weather events that are more intense, and in some cases, more
frequent. The National Climate Change Adaptation Research Facility (NCCARF)
advised that, nationally, 'between 26 000 and 33 000 kilometres of roads are
potentially at risk from the combined impacts of inundation and shoreline
recession due to sea level rise'.
Hobsons Bay City Council provided the following insight into the various
ways climate change could affect transport networks in the urban environment:
Bus access may also be restricted due to flooding of roads.
Neighbouring streets may not be suitable for buses to bypass an area of
flooding. Flooded pedestrian underpasses can render a train station inoperable.
Heat waves can expand and bend railway lines shutting down whole networks.
Train, tram and bus users can become trapped at platforms and bus stops, exposed
to the elements, with limited shelter and a lack of water. A lack of water and
drinking fountains around public transport infrastructure during extreme heat
increases the risk of dehydration and heat stress.
Natural disasters are a clear risk to transportation and can result in
significant repair and replacement costs. The Queensland Tourism Industry
Council noted that in Queensland, where a range of natural disasters were
encountered between 2010 and 2013, transport network reconstruction costs to repair
8,741 kilometres of state‑controlled roads and 1,733 bridges and culverts
totalled $6.4 billion. The NCCARF referred to an analysis that found the cost of extreme weather
events incurred by Sydney Trains currently represents approximately 1 per cent
of its combined annual operational and maintenance costs.
There is a wide range of other climate-related threats which have direct
implication for transport infrastructure. These include the following:
- Climate change could mean that the lifespan of many
infrastructure assets is shorter than planned or that maintenance costs
increase significantly. For example, more frequent exposure to seawater as
a result of sea level rise could reduce the lifespan of bridges and
embankments. Storm surges are also resulting in local governments replacing or relocating
coastal infrastructure, such as coastal trails, and it is expected that this
activity will increase with sea level rise.
Repairs and other maintenance may be needed more regularly. For
example, flooding events from storm surges or high intensity rainfall could
require more frequent road repairs. The NCCARF also observed that cooling infrastructure might require more
- Similarly, materials used in transportation infrastructure could
deteriorate more quickly, increasing maintenance costs and the frequency in
which they need to be replaced. Dr Lauren Rickards advised that, in addition to
short-term damage, droughts and floods can cause longer-term issues for
ground-based transport infrastructure by altering ground conditions and
destabilising their foundations.
Higher temperatures are expected to increase heat stress on
transport infrastructure, with sealed roads and rail lines particularly
Financial implications from the disruption of transport infrastructure due
to climate change are foreshadowed. Examples include lost income and
productivity from public transport service interruption, as well as lost income
from supply chain disruption or the closure of airports or ports. Extreme weather events can also prevent people from being able to purchase
essential items, prevent these items from being restocked, and result in food
in supermarkets spoiling.
There are also non-financial implications. Individuals are clearly
inconvenienced and can experience discomfort when transport networks are
disrupted. Life threatening situations could also occur more frequently; for
example, the NCCARF noted that emergency services could be prevented from
attending incidents and cars could be swept off flood-affected roads.
Challenges and responses
The committee received evidence demonstrating that climate change
projections are being considered as part of specific infrastructure projects.
An example highlighted by several submitters is the Brisbane Airport Parallel
Runway Project. Brisbane Airport is built on reclaimed coastal land, which makes
it vulnerable to any increase in sea level and storm surges. To account for
this, the new runway was built at a higher elevation above sea level.
In its submission, Sydney Airport also advised that it has undertaken a
climate risk assessment and developed an adaptation plan to safeguard the
airport from risks associated with climate change. Sydney Airport explained
that the assessment, which will be reviewed at least every three years,
- mapping and understanding the baseline climatic conditions at the
- developing 'a set of future climate scenarios based on the main
climate variables such as sea level risk, temperature, east coast lows, wind
and drought' and identifying climate based risks; and
documenting existing controls and strategies in place and identifying
further actions required, such as technical studies and stakeholder engagement.
However, the Environment Institute of Australia and New Zealand (EIANZ)
is of the view that, in general, little consideration of climate change occurs
when transport infrastructure is planned and constructed, with examples such as
the new runway at Brisbane Airport being uncommon exceptions. The EIANZ argued
Climate risks are generally given only cursory treatment in
environmental assessment studies. For example, new motorways can be expected to
exacerbate climate risks due to increasing dependence on fossil-based transport
(even allowing for expected expansion in low or zero emission technologies).
Even public transport projects such as urban railways fail to acknowledge risks
such as power outages due to extreme weather events.
The EIANZ argued that the approach taken to the Brisbane Airport
Parallel Runway Project should be adopted with respect to other major
infrastructure that is at particular risk from climate change, such as ports.
In addition to the suggestion that climate change is not being taken
into account sufficiently when decisions about transport infrastructure are
made, it was noted that consideration of climate change adaptation is
complicated by an existing infrastructure backlog. The Australian Local Government
Association (ALGA) argued that local governments are already struggling to cope
with infrastructure demands. It submitted:
Local government owns and manages over 680,000km of roads in
Australia and spends billions each year on their upkeep. A 2006 report by
PricewaterhouseCoopers into the financial sustainability of the sector
estimated a substantial infrastructure backlog of around $14.5 billion and an
under-spend on renewals in excess of $2 billion per annum. A more recent report
on the State of the Local Roads Assets prepared in 2011 estimated an
underinvestment in local roads alone of around $2.2 billion per annum. These
studies demonstrate that local government is already under considerable
pressure to manage and maintain existing non-financial assets within current
The impact of climate change and extreme weather events
exacerbate these challenges.
To respond effectively to the challenges that climate change projections
indicate owners of transportation infrastructure will face, it was emphasised
that there is a need for long-term decision making and planning that accounts
for these risks. For example, ALGA submitted that 'existing infrastructure
and infrastructure designed today must be designed and managed for future climate
change'. The Northern Territory Government acknowledged that, in its jurisdiction,
planning for new transport infrastructure requires consideration of the impacts
of increased temperatures, rainfall, changes in sea level and coastal flooding.
The NCCARF also emphasised that there is a need to overcome barriers to
effective adaptation. It argued that 'given the potential for risk and loss,
owners and managers of transport infrastructure have a compelling case for
adaptation'. However, it argued that uncertainty around future climate
projections and appropriate design guidelines for the future, as well as a lack
of awareness by management of climate change being a financial or corporate
risk, might inhibit effective responses. In addition, the NCCARF acknowledged
that business realities might result in short‑term risks taking priority
over long-term planning, particularly if the long-term planning is incompatible
with investment timeframes.
For public transport, Hobsons Bay City Council argued that the relevant
infrastructure 'needs to be designed with both the end user and their exposure
to climate risk in mind, at all times during travel'. The Council suggested
that risks could be reduced by research, such as into the use of 'light
coloured ballast around train lines to reduce heat exposure'. More generally,
the Council argued that a 'coordinated and considered approach is needed to
manage the exposure of transport systems to climate change'.
Finally, change in the transportation sector can contribute to the
Australian economy reaching net zero emissions. A recent study argued that the
transportation sector could be powered entirely by clean energy through
renewable energy powered vehicles, the greater use of public and active
transport, and heavy transport fuelled by renewable hydrogen. The study cited
research from the Institute for Sustainable Futures at the University of
Technology, Sydney indicating that, by 2035, renewable energy could meet 40 per
cent of transportation needs.
Water supply and sewage treatment systems
The importance of water to sustain life is readily evident. Water is
also used for a wide range of other essential activities, such as cleaning and
food production. As contaminated water can readily lead to the outbreak of
disease, and is otherwise undesirable for a range of environmental, social and
economic reasons, the reliable supply of potable water and the effective
removal and treatment of wastewater are long-established public health
priorities. The Climate and Health Alliance provided the following information
on how damage to infrastructure for different water-related uses could have
negative public health risks:
- drinking water infrastructure, such as drinking water reservoirs,
reticulation systems and storage tanks—damage to this infrastructure 'can
result in the ingress of microbial pathogens and chemicals into drinking water
and pose unacceptable risks to health';
- sewerage infrastructure—damage 'can lead to sewage overflows and
human exposure to unsafe concentrations of microbial pathogens and chemicals';
recycled water infrastructure—when used to supply recycled water
for the irrigation of food crops, damage 'can result in the ingress of
pathogens and chemicals and pose risks to the food supply'.
Accordingly, the implications of climate change for water supplies and
the infrastructure needed to convey water and wastewater is an important
Implications of climate change for
water and sewage infrastructure
Projections that climate change is likely to worsen drought conditions in
southwest and southeast Australia (see Chapter 2) are expected to exacerbate
existing water scarcity issues facing major cities, such as Melbourne, Sydney
and Perth. To illustrate the potential effects, the rainfall decline in
southwest Western Australia since the mid-1970s was highlighted. The Climate
Council of Australia explained that rainfall in that region has declined by 19
per cent over that period, which has resulted in a disproportionately higher
decline in the annual average stream flow into Perth's dams of nearly 80 per
cent (Figure 7.1).
Figure 7.1: Trend in total annual stream flow into
Perth dams 1911–2012
Climate Commission; provided in Climate Council of Australia, Submission 40,
The Climate Council added that, in Melbourne, water storage levels
fell to a record minimum of 25.6 per cent in 2009, with stage 3 water
restrictions in place from 2007 to 2010.
The Climate Council explained that 'assessments of future impacts of
drought on both water supply and urban water demand at the regional and/or
catchment level suggest that water scarcity could increase across Australia'.
It referred to an analysis undertaken by the New South Wales Office for Water
in 2010 that projected water inflows to key Sydney dams, such as Warragamba and
Shoalhaven, could decrease by 25 per cent by 2070.
Extreme events present various challenges for water supplies and water
and sewerage infrastructure. For example:
- Increasing numbers of very hot days are expected to increase the
frequency and length of the periods when demand for water peaks. High
temperatures may also result in equipment failure when the design standards of
the structure or equipment is exceeded.
- Dry soil conditions during periods of drought can exacerbate the
collapse and failure of pipes.
Floods create issues regarding the quantity and quality of water
supplies and, in urban environments, the capacity of stormwater systems to deal
- Bushfires affect water supplies due to damage to water
infrastructure and because ash and sediment caused by the bushfire can
ultimately end up in reservoirs as runoff, contaminating the water supply. Bushfires can also cause damage and affect access to assets.
Interactions of water, stormwater and sewage infrastructure with the
ocean is another issue that climate change is expected to complicate. For
- Sea level rise, storm surge risk and, in some locations, more
intense cyclones, are particular concerns for sewerage infrastructure. The
Northern Territory Government noted that Darwin and Palmerston's wastewater
treatment plants are all located near the coast. It noted that existing storm
surge risk could be exacerbated by forecast sea level rises. The Government is
concerned that more intense cyclones 'could affect the structural integrity of
sewerage infrastructure' across the coastline.
- Failures of sewerage systems can have health consequences. The South
East Councils Climate Change Alliance (SECCCA) noted that increased rainfall
intensity during storms is contributing to an increasing incidence of sewer
overflows. It is considered that overflow from the sewerage system into the stormwater
system has resulted in E. coli (Escherichia coli) being detected near
stormwater outlets in Port Phillip.
Climate change is also expected to increase pressure on water and
wastewater treatment infrastructure. SECCCA submitted that 'increased salinity
levels in recycled water due to rising seawater levels resulting in increased
infiltration to sewerage network and at wastewater treatment plants'. The Northern Territory Government also observed that increasing ocean
temperatures due to climate change 'will decrease dissolved oxygen levels and
may require sewerage to be treated to a higher level before being discharged in
order to mitigate the risk of potential adverse effects such as fish kills'.
As the introduction to this chapter noted, the resilience of different
types of essential infrastructure has interdependencies; for example, power
interruptions can affect water and sewage infrastructure.
Additional unique challenges for remote parts of the country were also
detailed in the submissions from the Northern Territory Government and the Australian
Medical Association (AMA).
The committee was informed of efforts underway to improve the understanding
of the risks facing the water sector. The Water Services Association of
Australia (WSAA) explained that the Australian urban water industry 'has been
amongst the first built environment systems to be affected by climate change
and amongst the first industries globally which have had to develop an adaptation
response'. For example, the WSAA has developed Climate Change Adaptation
Guidelines to advise participants in the Australian water industry about best
practice responses. The WSAA also highlighted AdaptWater, which is a 'web-based climate change adaptation
and asset-planning tool' that provides hazard mapping and assists to quantify
climate change risks and undertake cost–benefit analyses of adaptation options.
The redevelopment of the Mount Crosby pumping station in southeast
Queensland was highlighted as an example where infrastructure is being made
more resilient to climate change risks. Dr Karl Mallon from Climate Risk, which
provides advice to the water sector including the WSAA, explained that the
...is probably one of the most critical pieces of
infrastructure for South-East Queensland. It takes river water downstream from
the Lockyer township, which we know had the so-called inland tsunami. It pumps
it from the river, treats it and then sends it down into South-East Queensland.
That facility was built in the 1890s, and a few years after it was built they
had a major flooding event. One of the problems with these sorts of assets is
that if you are going to take water from a river you have to put it near a
river, and that means you are prone to flooding. There aren't choices;
sometimes these assets have to be placed within areas where there are these
hazards. That facility is being redeveloped to, essentially, last another
hundred years. But the critical issue here is that it's designed to be fit for
purpose so that at the end of this century it is still running properly and
hasn't become a victim of the change in the flood regime.
The committee is also aware of efforts to improve the utilisation of
stormwater and wastewater. In particular, existing efforts to increase the
utilisation of stormwater to improve the resilience of the water supply,
including several specific stormwater related projects, were considered by the
committee during a previous inquiry into stormwater management (see Box 7.1).
7.1: Inquiry into stormwater management in Australia
2015, the committee appointed in the 44th Parliament conducted an inquiry
that considered the utilisation of stormwater in Australia's cities. Evidence
presented to the committee indicated that, with the exception of Perth, it is
estimated that less than 3 per cent of rainwater and stormwater is used.
Future growth in Australia's urban centres and more frequent or intense
extreme weather events due to climate change is expected to increase volumes
of stormwater further.
committee's report considered proposals to increasing the utilisation of
stormwater to reduce pressure on traditional water supplies, particularly for
uses such as supporting green spaces in cities and reducing the urban heat
island effect. The report discussed existing projects for stormwater
harvesting, as well as the concepts of water sensitive urban design and water
sensitive cities. Essentially, the overall theme of the inquiry was how water
management practices could be altered to consider urban areas as water
committee recommended that the Australian Government work with the state and
territory governments to develop and implement a national policy framework
for stormwater management (a National Stormwater Initiative).
its response to the committee's report, the Government agreed with the intent
of the committee's recommendation. The Government stated that, as a first
step, it would 'consult with the states and territories to seek their views
on jointly reviewing the Australian Guidelines for Urban Stormwater
Management (2000) and whether these guidelines could form the basis of a
national policy framework for stormwater management'. The Government also
noted that, as part of its City Deals program, where stormwater management
and urban water are identified as a priority issue, the City Deal could
facilitate a coordinated response.
One of the key areas for response identified in submissions is the need
for greater diversity in water supplies. Long-term declines in the water
collected in catchments as well as periods of drought have already necessitated
the development of climate-resilient sources of water. In Perth, two seawater
desalination plants have commenced operation (the first in 2006 and the second
in 2013). The plants produce a combined 145 billion litres of drinking water a
year, representing around half of Perth's water supply. In Adelaide, the desalination plant that commenced operating in 2011 can supply
around half of Adelaide's water needs. Desalination plants are also located in Melbourne, Sydney and the Gold Coast.
In response to its water supply challenges, the Northern Territory
Government submitted that the potential for managed aquifer recharge (that is,
diverting surplus water into underground aquifers) is being investigated, with
this technique being used in one coastal community.
Councils in the Melbourne metropolitan area also highlighted the need to
diversify and decentralise water supplies in response to climate change and
increasing population. The Northern Alliance for Greenhouse Action (NAGA) noted
that the majority of bulk water supplied to the region administered by its
local governments is provided through the Yan Yean Catchment and Toorourrong
Reservoir, and that all reservoirs in the region are within bushfire prone
To improve the resilience of the water supply in its region, NAGA called
for increased government efforts to address water waste, including the more
effective utilisation of stormwater for non-potable purposes, such as
irrigating sporting fields and other urban green spaces. Similar observations were made regarding water use in other regions: Regional
Development Australia – South West (RDA South West) noted that, in the Greater
Bunbury area, seven gigalitres of semi-treated water 'flows into the ocean
when it could be used on eight nearby ovals, a racecourse and on multiple local
parks'. RDA South West argued that a targeted government funding program could
support simple projects 'which make a big difference'.
Improving water efficiency is another way to reduce pressure on water
supplies. RDA South West suggested that minimum standards for water use by
white goods could be enhanced. To help facilitate water efficiency in buildings, the Victorian Government
established the Plumbing Industry Climate Action Centre in Geelong 'to deliver
the next generation of sustainable and water efficient buildings'.
From a public health perspective, the AMA highlighted the need to
improve the resilience of water supplies in regions and communities in
Australia that do not have access to infrastructure that delivers clean and
potable water. The AMA argued that the 'provision of safe and affordable water
for all Australians' should be pursued as part of Australia's commitment to the
Sustainable Development Goals.
On the planning of water infrastructure assets and systems, it was
argued that there is a need for a fundamental change in approach. In their
joint submission, a group of engineers and scientists noted that water-focused
infrastructure assets such as reservoirs, flood-relief installations and drains
have historically been designed with reference to records of previous rainfall
(both extremes and averages). However, the submission observed that 'in
recent decades, rainfall has been considerably more variable in its amounts and
characteristics'. That is, 'most design has assumed that data collected in the instrumental
record (over approximately the last 150 years) will represent the variability
over the foreseeable future'. The joint submission argued that, given the 'current
understanding of climatic variability and climate change, it would be unwise to
continue with undertaking hydrological analysis and design using only
The Climate and Health Alliance argued that the current approach of
water supply and sewerage infrastructure being 'largely subject to voluntary
standards specified in water industry codes of practice' should be replaced by 'strengthened
Ongoing research also was supported. The WSAA submitted:
The challenges we face in a climate of uncertainty are
significant. Ongoing research and scenario planning is essential to help inform
decision-making. Robust and on-going climate research must be in a form
suitable for hydrologic and hydraulic models (e.g. for environmental flow
modelling and forecast), water supply modelling, flood modelling, evaporation
and evapotranspiration rates, and even water supply demand modelling.
The Climate and Health also called for the Australian Government to
support research 'into new climate-resilient water and sewerage construction
materials and technologies'.
The final type of critical infrastructure networks considered in this
report are the assets used to generate and supply electricity.
The committee recognises that the implications of climate change for the
energy sector was considered in detail in the 2017 final report of the Independent
Review into the Future Security of the National Electricity Market, chaired by
Dr Alan Finkel AO (the Finkel Review). In addition, this issue has been
examined in several Senate committee inquiries in recent years, including:
the Senate Select Committee into the Resilience of Electricity
Infrastructure in a Warming World (2017);
- this committee's inquiry into the retirement of coal fired power
stations (2017); and
- this committee's inquiry into the performance and management of
electricity network companies (2015).
In this section, the report briefly outlines issues related to the
implications of climate change for electricity infrastructure assets. However,
the committee does not wish to duplicate the extensive inquiries that have
already been conducted and refers readers to those reports for further details
and discussion on system and market developments.
Overview of the implications of
climate change for the electricity system
The following paragraphs discuss the implications of climate change for
electricity generation, networks, retailers and consumers in two sections. The
first examines the implications of increased temperatures and more frequent or more
intense extreme weather events and natural hazards. The second section
considers recent and projected changes in electricity generation, including
changes linked to international greenhouse gas emissions commitments.
Increased demand and implications
of extreme events
Higher temperatures and increases in periods of successive very hot days
is expected to result in additional demand due to increased use of air
conditioning. CSIRO noted that, in all states except Tasmania, higher peaks in
summer electricity demand as a result of increased air conditioner use would
require either greater generational capacity or other adaptations to ensure the
demand can be met.
In addition to the increased peak demand associated with hot days, heat
events also affect the reliability of infrastructure. High temperatures affect
the efficiency of generators and 'can lead to breakdowns and an increase in
maintenance costs'. Many elements in the power system also 'have maximum operating
temperatures above which they disconnect to avoid damage'; higher temperatures due
to climate change will result in these controls being triggered more
Examples of high temperatures and heatwave events that resulted in
significant disruption to electricity networks include the following:
- In January 2009, high temperatures as part of a heatwave
affecting Victoria and South Australia resulted in transmission infrastructure
outages and decreased generation output, including the outage of the Basslink
interconnector that links the Victorian and Tasmanian components of the
National Electricity Market (NEM). It also resulted approximately 500,000 people losing power in Melbourne and
other areas of Victoria.
- The February 2017 heatwave in South Australia and New South Wales
resulted in load shedding to restore the electricity system to a secure
- On 28 January 2018, around 48,000 households in Victoria were
without power after various network faults such as blown fuses and failed
transformers related occurred due to a heat-related spike in demand.
The Finkel Review described heatwaves as posing 'the most significant
threat to the power system at a bulk supply level'. The Finkel Review's final
Heatwaves are an ongoing
challenge as they can affect large parts of the network simultaneously...The
increase in air conditioning in response to high temperatures generally results
in peak demand, which causes stress to electricity infrastructure. Higher
temperatures also limit infrastructure capabilities and reduce generator
capacity and efficiency. Transmission lines can expand with hot weather,
causing the cable to sag below height limitations and potentially becoming an
ignition source for bushfires. Even when a heatwave has been forecast, any
errors for electricity demand can lead to risks to the security of the NEM.
Electricity networks are also vulnerable to other extreme weather
events. A clear example is the severe storms in South Australia on 28
September 2016 that caused five transmission system faults and toppled 23
transmission towers. These storms ultimately resulted in all supply to the
state's electricity system being lost (a black system event).
The Finkel Review noted that increases in the frequency and intensity of
extreme weather events would affect transmission and distribution networks,
which the Finkel Review noted are 'vulnerable' to such events. Comments in the Finkel Review's final report on how different extreme events
can affect electricity infrastructure are at Box 7.2.
Submissions to this inquiry also warned that electricity network
infrastructure is vulnerable to extreme events that could increase in frequency
or intensity as a result of climate change. Specific examples were provided. On
bushfire risk in its area, SECCCA submitted that the electricity network
service provider has 'identified the loss of two sub-transmission 66 kV lines
between their Dromana and Rosebud zone substations in a bushfire event [as] a
credible contingency event'. SECCCA added that the risk is greatest in Arthurs
Seat State Park, where the lines are in close proximity to each other. SECCCA
warned that the loss of these lines 'would result in the total loss of
electricity supply to the majority of the Lower Mornington Peninsula'.
Box 7.2: The Finkel
Review's comments on how natural hazards can affect electricity infrastructure
In its final report,
the Finkel Review summarised how a wide range of natural hazards can threaten
electricity infrastructure and the reliability of electricity supply. In
addition to heatwaves, which were discussed in the above paragraphs, bushfires,
cyclones, floods and drought are particularly relevant to climate change. Accordingly,
the observations regarding these hazards are reproduced below in full:
damage transmission lines and can trigger lines to be de‑rated or shut
down to prevent damage. Smoke can also induce transmission line faults,
resulting in a loss of supply. Transmission lines may also be shut down for
the safety of emergency personnel. A bushfire can severely damage electricity
infrastructure and result in communities being without power until repairs
can be made. AEMO [Australian Energy Market Operator] specifically monitors
lightning and bushfires, assesses the threat to the NEM and will send out
market notices if required.
Cyclones can damage
power stations, substations and transmission lines, resulting in a loss of
generation or ability to transmit power. Cyclones and severe storms often
result in restoration costs for network businesses. Network businesses have a
comprehensive range of measures to prepare the network and employees for each
storm and cyclone season.
Floods can lead to
damage to electricity infrastructure, resulting in significant repairs or
rebuilds. The FY2012 flooding in Queensland resulted in significant damage
which meant that power supply could not be reconnected for periods ranging
from weeks to months. Additionally for areas not directly affected by floods,
power supply may still need to be disconnected due to other parts of the
network being affected.
Drought can reduce
the generating capacity of both hydro and thermal generation. During the
FY2007 drought, generation was curtailed due to water shortages. Since then,
information on the impact of water availability on generation capacity has
improved and generators have invested in more efficient use of water.
Nevertheless, protracted drought events will have an impact.
Review into the Future Security of the National Electricity Market, Blueprint
for the Future, Commonwealth of Australia, 2017, p. 71. The implications of
extreme weather events and a long-term decline in rainfall for
hydroelectricity generation was also noted in the Tasmanian Government's
submission. The Government explained that such developments could have
'significant short- and long-term impacts' on the state's energy supply.
Tasmanian Government, Submission 4, p. 3.
As has been noted elsewhere in this report, the loss of electricity
supply can have significant consequences for other essential services. The
Climate and Health Alliance noted that power outages during heatwaves
'substantially increases the risk of human morbidity and mortality'. A further
example is that communications infrastructure which facilitates information
sharing during extreme events can also be affected by electricity outages.
Electricity infrastructure can also cause extreme events. As noted in
Chapter 2, a trend of more frequent dangerous fire weather has been
recorded and it is expected that climate change will increase the likelihood of
dangerous fire weather occurring more frequently. Failures in electricity
infrastructure can cause bushfires; for example, five of the 15 fires examined
by the Royal Commission into the 2009 Black Saturday bushfires were associated
with the failure of electricity assets. The Royal Commission observed that:
Although the proportion of fires that are caused by electricity
infrastructure is low—possibly about 1.5 per cent of all ignitions in normal
circumstances—on days of extreme fire danger the percentage of fires linked to
electrical assets rises dramatically. Thus, electricity-caused fires are most
likely to occur when the risk of a fire getting out of control and having
deadly consequences is greatest.
Finally, it was noted that in many instances, the implications of
climate change for electricity infrastructure could be gradual, such as through
the accelerated deterioration of materials.
International emissions commitments
and developments in electricity generation
Climate change also influences decisions and planning around how
electricity is generated. As a signatory to the Paris Agreement, the Australian
Government has committed to reduce Australia's greenhouse gas emissions by 26–28
per cent below 2005 levels by 2030. As the Finkel Review noted, electricity
generation accounted for around 35 per cent of Australia's emissions in 2016
and, accordingly, 'any effort to
significantly reduce Australia's emissions will require a reduction in
emissions from the electricity sector'. Australia's commitments also come at a
time when consideration needs to be given to how Australia's 'ageing fleet of
coal-fired generators' will be retired.
As the Finkel Review also noted, however, governments are only one
driver of change in the transformation of the electricity market. Change is
also caused by many other factors, including 'international trade
competitiveness, innovation, business appetite for lower costs, competition to
drive new technology, and consumers' desire to take greater control of their
energy costs and do their bit for the environment'.
The trend towards a more decentralised electricity system was examined in
the committee's 2015 inquiry into the performance and management of electricity
network companies. That report explored how the increased use of embedded
generation assets within the distribution network, such as solar photovoltaic (PV)
panels, is likely to present significant challenges for the ongoing utility and
maintenance of extensive transmission networks. The report also discussed the
potential of further disruptive technologies and the potential for significant
numbers of customers going 'off grid'.
A roadmap developed by Energy Networks Australia and CSIRO in 2017 to
inform the transition of the electricity sector also noted that, by 2050,
'millions of customer owned generators will supply 30–45% of Australia's
electricity needs'. Accordingly, 'customers or their agents—not utilities—will
determine how over $200 billion in system expenditure is spent'.
The Australian Government has various policies and agencies focused on
the energy sector. These include:
- the Renewable Energy Target, which comprises two schemes:
a large-scale target, 'which encourages investment in renewable
power stations to achieve 33,000 gigawatt hours of additional renewable
electricity generation by 2020', and
- a small-scale scheme intended to support 'small-scale
installations like household solar panels and solar hot water systems';
- the Clean Energy Finance Corporation and the Australian Renewable
the National Energy Productivity Plan, which is intended to
ensure energy productivity improves by 40 per cent over the period 2015 to
the Solar Communities Program, which provides funding for
community groups in selected regions across Australia to install rooftop solar
PV, solar hot water and solar-connected battery systems; and
- the National Energy Guarantee, which will consist of 'dual
obligations that will require energy retailers and some large users across the
NEM to deliver reliable and lower-emissions energy generation each year'.
State and territory governments have also undertaken work regarding renewable
energy, energy reliability and network infrastructure:
- Under the premiership of the Hon Jay Weatherill MP, the former
South Australian Government pursued targets to increase the amount of
electricity generated from renewable energy, first with the target set in 2009
of 33 per cent renewable energy by 2020, and subsequently the target set in
2014 of 50 per cent renewable energy generation by 2025. The former government's focus on renewable energy is perhaps most clearly
demonstrated by the agreement it reached between French renewable energy
company Neoen and US company Tesla on the installation of the world's largest lithium
ion battery at a Neoen-owned wind farm.
- The Australian Capital Territory has a target of 100 per cent
renewable energy by 2020.
The Queensland Government has set a target of 50 per cent
renewable energy by 2030.
In response to extreme weather threats, the Council of Australian
Governments (COAG) Energy Council is developing a strategy 'to improve the
integrity of energy infrastructure and the accuracy of supply and demand
forecasting'. This strategy responds to the concerns expressed in the Finkel
Review's report that increasing and more intense extreme weather events will
make forecasting and managing the electricity system prior to and during these
events more difficult. The COAG Energy Council is also considering the National Energy Guarantee
referred to above.
Some of the risks presented by ageing infrastructure are also being
addressed. For example, in response to the final report of the Royal
Commission into the 2009 Victorian Bushfires, the Victorian Government
established the Powerline Bushfire Safety Program. This is a ten year, $750
million program of works to improve electricity assets and controls.
New infrastructure is also assessed for resilience. The Northern
Territory Government explained that networks in its jurisdiction 'have been engineered
to deliver a high level of resilience'. To illustrate, the Government advised
that 'transmission lines are built to withstand Category 4 cyclones, and
regulated network assets including distribution transformers and ring main
units are located so they are above a 1 in 100 year flood level'.
Despite this, it was argued that investment will be required to improve
the resilience of assets in response to the risks presented by heat, coastal
inundation and bushfires. CSIRO advised that preliminary modelling indicates that 'it could cost every
consumer an additional 2.8 cents per kilowatt hour by 2050 to adapt the current
electricity supply chain to climate change'.
As part of a response to climate change and the significant developments
occurring in the electricity system, CSIRO's submission indicated that various
measures across the electricity system need to be considered to facilitate
demand management. It explained that demand management 'to enable more
flexible capacity is an important way of adapting to a more variable supply and
load'. CSIRO advised that greater demand management could be achieved through:
battery energy storage;
- heat storage in various materials, such as molten salts;
- incentives to reduce electricity use at periods of peak demand,
such as bill discounts or rebates for customers who use efficient air
conditioning that can operate in economy mode when the network is under stress;
- pricing reform for distribution networks and retail that establishes
'greater opportunities for small customers or their agents to provide a range
of demand management services to different parts of the grid'.
On the generation component of the electricity system, AGL Energy
submitted that in the longer-term, decarbonisation of the generation sector 'is
likely to provide an opportunity for growth and value creation'. AGL has
committed to closing all of its existing coal-fired power stations by 2050
while continuing to invest new renewable and near-zero emissions technologies.
A specific example is the planned retirement of AGL's Liddell Power Station
in 2022. After announcing the planned retirement, AGL subsequently announced
that the generators at Liddell would be converted into synchronous condensers.
In addition, the lost generation would be supplemented with 'a mix of
high-efficiency gas peakers, renewables, battery storage and demand response,
coupled with an efficiency upgrade at Bayswater Power Station'. AGL stated that
an analysis of this plan estimated the levelised cost of energy for the
replacement generation at $83/MWh, compared with extending Liddell at $106/MWh.
Also in relation to generation, a collection of Melbourne-based local
governments comprising the Eastern Alliance for Greenhouse Action (EAGA) argued
that it would be beneficial to promote solar PV in households, particularly
among low‑income households. The EAGA submitted:
...low income households are particularly vulnerable to climate
change, with high power prices and outages during heatwave events and other
extreme events leading to higher morbidity and mortality risks, particularly
for the aged. There is mounting evidence to demonstrate that the installation
of solar PV supports greater capacity for cooling in households where energy
costs represent a large proportion of ongoing living costs. The ability of
the technology to provide low cost energy throughout the day means these
householders can cool their homes without fear of 'price shock'.
The EAGA advised that it is leading a program involving 21 local
governments to 'deliver solar PV for low income households'.
It was also observed that, given the age of existing infrastructure, it
would be timely to start planning replacement infrastructure that is more
resilient in the face of climate change. The EAGA submitted:
As much of Victoria's electricity infrastructure is
approaching the end of its lifecycle in the next 10 years, now is an important
time for the policy settings to help drive this transition in a least cost,
equitable way. [We consider]...that Victoria has an enormous opportunity to
strategically upgrade its grids to ensure a decentralised and decarbonised
energy system going forward, and one that is resilient to the impacts of
The Climate Council argued that there is a need for an overarching
national transition plan for Australia's electricity system. It argued that
such a plan should:
increase the utilisation of renewable energy, energy efficiency
and storage technologies to enable electricity generation using fossil fuels to
end by 2040;
- achieve a minimum of 50 per cent electricity generation by
renewables by 2030;
ensure the system can be 'secure and robust' when faced with
extreme weather events; and
- ensure that net zero emissions are reached 'well before 2050, aiming
Finally, a recent study that considered how to transition the
electricity sector to a clean energy future called for a comprehensive overhaul
of the NEM. The study argued that:
- the National Electricity Objective should be amended to include a
commitment to achieving 100 per cent clean energy;
a public interest retailer that would provide clean energy
services (such as energy efficiency upgrades and solar PV) for low-income
- local energy trading should be facilitated—the study suggested
that the aim should be to 'make the electricity market act more like the
internet', such as by establishing a website that enables users to purchase
electricity from local clean energy sources.
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