Abstract
Extensive economic analysis of the Gordon-below-Franklin hydro-electric scheme by conservation groups in the early 1980s pointed to the economic risks of constructing further hydro-electric schemes. The Hydro-Electric Commission of Tasmania nevertheless proceeded with the construction of the King and Anthony schemes, and now finds itself in some financial difficulties as a result. The main problem is that the Commission overestimated demand growth by a factor of three, and now has substantial excess capacity. This extra capacity must be paid for whether or not it is used. This article examines the Tasmanian electricity system over the past decade, and points out the low risk nature of energy conservation and wind energy as “new” sources of electricity. This is because “new” capacity becomes available in small blocks, allowing close matching between demand and supply.
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