Weighing up our energy options

What would the ‘perfect’ energy source look like? 

In an ideal world, it would be affordable, easy to store, have limited community or environmental impacts, and be instantly and readily available anywhere.

Sounds great, doesn’t it? Unfortunately, the ‘perfect’ energy source does not exist. Instead, we are faced with the challenge of needing to strike a balance between our energy options.  


Coal continues to be the primary source of power generation in Australia. It’s affordable, abundant and powers around 73 percent of Australia’s energy.1 It’s also easy to dig out of the ground, transport and store. Coal is a reliable source of electricity and underpins most of our power requirements. That said, it produces more carbon emissions from generating electricity than other fuels. Coal mining impacts the landscape and surrounding environment, and burning coal contributes to smog and air pollution.

Natural Gas

Gas is plentiful and currently powers around 13 percent of Australia’s energy needs.1 Gas plants are highly responsive meaning they can be turned on and off quickly: they can be used to back-up intermittent renewable energy sources and meet times of heavy demand. Gas is clean-burning and does not contribute to local air pollution. But while gas might be ‘cleaner’ than coal, gas-fired electricity still produces carbon emissions (albeit around half that of coal). There is some community concern about potential environmental impacts of gas extraction, and while gas is relatively cheap, it still costs more than coal.


Hydro (or water) energy doesn’t produce any carbon emissions when used to generate electricity and it currently powers around seven percent of Australia.1 Hydro depends on rainfall, but using large dams means that it is generally reliable. Existing hydro infrastructure makes it a relatively cheap generation option in terms of running cost. On the downside, most viable hydro sites in Australia have already been developed, so construction of new hydro power facilities would be very expensive and could impact the environment. 


Wind energy is another option that doesn’t produce carbon emissions when generating electricity. It powers around four percent of Australia and is generally the cheapest form of large scale new renewable energy.1 However, it still remains more expensive than coal or gas. Wind farms typically cause no long-term environmental damage and can co-exist with farming, but some people don’t like the look of the structures. Also, the energy produced is intermittent, meaning it can’t be relied on to provide power 24/7 or at times of peak (high) demand.


Solar energy powers about two percent of Australia and doesn’t produce carbon emissions when generating electricity.1 Solar panels can be fitted to many buildings and locations around Australia. On the upside, the cost of solar is becoming cheaper (although it’s still expensive when compared to coal or gas). The downside is that solar can’t match our energy needs around the clock, because it only works in daylight. Until we have cost-effective and practical battery storage options, solar is unable to meet base load power needs.


Biomass and biogas are typically a carbon-neutral fuel option and currently powers around one percent of Australia.1 Biomass puts waste material, particularly in rural cropping areas and land fill waste, to good use as a fuel to generate electricity. However, biomass has low energy density (which means you need more of it to produce the same energy output) and costs more than coal and gas to produce electricity. There are also concerns that growing biomass takes resources away from food crops and natural areas. 


Geothermal projects produce significantly less carbon dioxide than coal or gas-fired power plants. Unlike solar and wind energy which are intermittent, geothermal is generally accessible at all times and it is used extensively in countries where it’s available such as New Zealand. However, geothermal is not a widely used source of energy in Australia as we don’t have conventional or shallow geothermal resources. The geothermal sources that we do have are generally located in remote areas and the technology to commercialise these resources is yet to be proven.

As you can see, there’s no easy answer! All of these options have their pros and cons, and unless a perfect fuel source is found it will continue to be a juggling act to balance cost, reliability and environmental objectives. 


  1. All energy generation figures in this post have been calculated with analysis from Origin Energy. The data includes all of Australia: the National Electricity Market (QLD, NSW, Vic, SA, TAS), plus Western Australia and the Northern Territory, but excludes Mt Isa. Embedded generation data sourced from State of energy market report 2014, Australian Energy Regulator, WA FY12 data from Greg Ruthven 2012, Statement of Opportunities Pre-Launch briefing, Independent Market Operator 2012 and NT FY13  data Energy Supply Association of Australia 2012, Electricity Gas Australia 2014.

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