Carbon tax helps cut emissions in Australia's power generation

The carbon tax has helped to cut emissions intensity of Australia's power generation with the closing of coal-fired stations, their mothballing and driving down sale of electricity.

With Victoria's Yallourn brown-coal-fired power station becoming the latest to announce a production cut, experts said falling demand for electricity, more renewables including wind farms and solar, and the carbon price were driving Australia's coal-fired stations out of the market, leading to cleaner generation.

An analysis of figures compiled by the Australian Energy Market Operator showed, electricity sold into the east coast market in the three months since the tax was introduced on average created 7.6 per cent less carbon dioxide for each megawatt hour of power.

New data showed a marked decline in power usage from carbon emitting coal as compared with the same three months last year, with the decline of around 6.3 per cent following the ironing out of seasonal differences.

Climate change minister Greg Combet talked up the role of the $23-a-tonne carbon price in the shift. He said it was significant that the emission intesity of the electricity generation system had fallen in the first quarter of the carbon price.

It was also significant that around 3000 MW of high-polluting electricity generation had closed or had been phased out.