ENERGY ADVISORY AND REGULATORY SERVICES
Energy in Tasmania
Energy use
The demand for electricity in Tasmania has reached the long-term firm capacity of the State's electricity generating system. Furthermore, electricity has been forecast to increase at an average rate of about 1.7% per annum between 2001-02 and 2015-16. Unusually low autumn rain falls in 2002 exacerbated the electricity supply situation and resulted in the Bell Bay Power station being brought into service for the first time since 1990-91.

New sources of energy supply
The Office of Energy Planning and Conservation has worked in close consultation with industry and other government agencies to facilitate the development of new energy supply options for Tasmania. This work has included the development of a regulatory environment appropriate for the establishment of new energy options, including the proposed Basslink cable linking the Tasmanian electricity grid with that of the south-eastern mainland states and the introduction of natural gas via Duke Energy's natural gas pipeline.

Both projects will result in increased diversification of Tasmania's energy supply, attract new industry and allow existing industry in the State to expand. These projects, with a combined investment of over $1 billion, will also introduce competition into the State's energy sector.

A Joint Assessment Panel (JAP) review of the Basslink project has been undertaken and has recommended that the project be given approval by the three governments (Commonwealth, Tasmanian and Victorian). The link will enable Tasmania to join the National Electricity Market (NEM).

Basslink will provide Tasmania with a reliable new source of electricity supply and will also promote major investment in renewable energy projects, such as wind farms, and investment to increase the efficiency of, and output from, Tasmania's existing hydro-electric system. Hydro Tasmania has begun construction on the first stage (10 MW) of a multi-stage wind farm at Woolnorth on the North-West Coast, which is due for completion by late 2002.

Hydro Tasmania and Duke Energy International have entered into a formal agreement to convert the two generating units of the Bell Bay Power Station from oil to gas. Conversion of the first generating unit is close to completion. The conversion of these generating units will provide a means of supplying additional low-cost electricity to meet increased industrial electricity load in the State.

The Office of Energy Planning and Conservation is committed to providing a robust framework for new investment in the Tasmanian energy supply industry.

PROVISION OF ENERGY ADVISORY AND REGULATORY SERVICES
Key clients
The major users of policy advice provided on energy issues, as described in the Energy Coordination and Planning Act 1995, are the Minister for Infrastructure, Energy and Resources, the Government, energy users and the community in general.

The primary users of this Output Group, as it relates to energy market regulations, are domestic, commercial and industrial energy consumers, and potential entrants to the Tasmanian retail market

How this Output Group is delivered
The Output Group is provided by staff of the Office of Energy Planning and Conservation in liaison with community groups, the State's electricity businesses (the Hydro-Electric Corporation, Aurora Energy Pty Ltd and Transend Networks Pty Ltd), private sector energy companies, universities and other governments.

The Department's organisational change program, The Will and the Way, will assist the Office of Energy Planning and Conservation in successfully delivering its key outputs. This will be achieved particularly by focusing on the needs of key clients and end-users. To this end, consultation, collaboration and cooperation with key clients and end-users, including those within the Department, will be essential in determining strategies and measuring performance against those strategies.

Achievements Against Strategies/Issues Identified for 2001-02
Energy Development
The Office continued to provide advice to the Minister and assistance to other agencies and parties involved in the facilitation of energy developments in Tasmania. Once again the major issues covered in this area were Basslink and the preparation of Tasmania's entry into the National Electricity Market, the creation of a regulatory framework in preparation for the advent of natural gas and participation in the facilitation of contestable retail electricity and gas markets.

The Office of Energy Planning and Conservation chairs the Network Planning and Reliability Panel, the Code Change Panel and the Electrical Emergency Management Working Group. The Office also provides comment on the System Controller's Planning Statements to ensure they provide an accurate reflection of the current and proposed outlook for the energy industry in Tasmania.

Natural Gas
The Office has continued to develop a suitable regulatory framework for the establishment of a natural gas industry in Tasmania. The framework has been required to provide certainty to Duke Energy International and other potential investors in the Tasmanian gas industry, as well as providing suitable customer protection mechanisms.

A significant task associated with the development of the natural gas supply industry has been the need to develop an appropriate planning process for developments in the vicinity of high pressure gas pipelines. The OEPC has worked closely with the Department of Primary Industries, Water and Environment to develop a proposed process that is effective and streamlined. The development of this proposal has involved extensive consultation with industry, local government and landholders.

The Office is also working with the Department of Justice and Industrial Relations to develop a comprehensive complaints resolution scheme for the gas supply industry.

The Office has continued to work closely with other departments in facilitating a gas retail market in the State and assisting in the tender process to select a gas distributor and gas retailer. The facilitation of gas distribution and retailing has required the creation of a regulatory framework for the industry downstream of Duke Energy's gas transmission pipelines, and the Office has worked in close association with Workplace Standards Tasmania and other Government agencies to develop a regulatory framework for licensing and setting competency standards for those involved in the installation of gas appliances and equipment.

Greenhouse
The Office has provided support to the Department of Premier and Cabinet in its role in the development of greenhouse policy through:

-  participating in the Government's inter-departmental committee on greenhouse;
-  administration of the Remote Renewable Power Generation Program in Tasmania;
-  introduction of the Forestry Rights Registration Amendment Act 2002, to establish and track ownership of carbon sequestration rights;
-  participation in forums in relation to implementation of the Mandated Renewable Energy Targets; and 
-  participation in Ministerial Council on Energy working groups associated with energy efficiency, renewable energy and greenhouse issues.

National Policy Forums
The office is involved in the following national policy forums:

The Ministerial Council on Energy and its working groups;
Energy Markets Development Working Group;
Energy Efficiency and Greenhouse Gas Working Group;
Strategic Energy Supply and Security Working Group;
Downstream Petroleum Working Group;
National Oil Supplies Energy Committee; and
The National Gas Pipelines Advisory Committee