MEDIA RELEASE Tuesday 29 May 2012

Wind's increasing role in power generation as gas useage drops in March quarter
Lower electricity demand and strong growth in wind power culminated in gas-use for east coast power generation falling by 13 per cent in the March quarter, according to a leading industry report card released today1. Clean energy policies were expected to lead to a boom in gas-use for power generation but so far the opposite seems to be happening, EnergyQuest Chief Executive Dr Graeme Bethune said today. The report by energy economics group, EnergyQuest reveals electricity generated from natural gas fell to 5,677 gigawatt hours (GWh) in the March quarter 2012, down from 6,404 GWh in the corresponding period last year, a fall of 727 GWh2. This led to a 5.9 petajoule (PJ) or 3.8 per cent - fall in total east coast gas consumption. Gas-use for power generation increased in Queensland and Tasmania, but was lower in the other eastern states. The Darling Downs and Braemar gas-fired power stations in Queensland were the only ones to buck the downward trend to any significant extent, Dr Bethune said East coast generation down - but wind and solar up Total east coast grid power generation fell by 1,689 GWh, with the decline also reflected in lower coal-fired generation (a decrease of 598 GWh) and lower hydro generation (drop of 578 GWh). However, wind power increased by 24 per cent (300 GWh). In the March quarter wind contributed 3.1 per cent of east coast generation, with the highest generation in South Australia of 942 GWh - 31 per cent of the States grid generation. In South Australia wind appears to be the new baseload, Dr Bethune said. Another trend we are seeing - and one of the factors driving down grid power generation - is the growth in home photovoltaic power (Solar PV) systems. EnergyQuest estimates that Solar PV generated 476 GWh on the east coast in the March quarter, 0.9 per cent of east coast generation, with the biggest contribution being 139 GWh in NSW, where Solar PV was 0.9 per cent of generation, he said.

The electricity data quoted in this release is available at http://www.energyquest.com.au/insightsandanalysis.php?id=136

2

Unless stated otherwise, all comparisons in this release are the March Quarter 2012 compared with the March Quarter 2011. Level 30 91 King William St Adelaide SA 5000 Telephone (08) 8431 7903 Mobile 0419 828 617 Email gbethune@energyquest.com.au ABN 18 503 484 404 ACN 139 665 295 www.energyquest.com.au

The highest percentage contribution was 3.5 per cent in South Australia. Lower wholesale power prices but higher retail prices Lower demand for grid power and the growth of wind and solar pushed average wholesale electricity prices down between 30-60 per cent to $25-30/MWh in all eastern states, except Tasmania. However, retail electricity prices, as measured by the Consumer Price Index, increased in all eastern capital cities during the quarter, ranging from a 5.4 per cent increase in Melbourne to 17.9 per cent in Adelaide. The cost of renewable energy alternatives such as wind and solar contributes to the increase in retail prices while they push down wholesale prices, Dr Bethune said. Other oil and gas developments Gross Australian LNG production fell by 9.5 per cent to 4.5 million tonnes (Mt) in the quarter due to redevelopment work and cyclonic activity that affected North West Shelf (NWS) production. However when Woodsides Pluto project is in full production, Australia will rival Indonesia and Malaysia, the worlds second and third largest LNG producers. Domestic gas production increased by a meagre 0.9 per cent to 247.3 PJ. West coast production rose by 1.4 per cent but east coast production was flat at 156 PJ. Oil production continued to slide, falling by 3.5 per cent to 21.0 million barrels (MMbbl). Lower production from the Pyrenees oil field in the Carnarvon Basin was the biggest contributor to lower production. Total Australian petroleum production (oil, gas and natural gas liquids) fell by 4.5 per cent to 111.1 million barrels of oil equivalent (MMboe), reflecting lower gas and oil production. BHP Billiton was the largest petroleum producer for the quarter. However its production fell by 16.3 per cent. Santos was one of the few companies to show a significant increase in production.

About EnergyQuest EnergyQuest is an advisory firm focussed on independent energy analysis and strategy.Its oil and gas production and reserves estimates are compiled from a comprehensive database of company reports. Its electricity statistics are primarily sourced from AEMO. EnergyQuests comprehensive energy data is published in the companys EnergyQuarterly. Further details are available at www.energyquest.com.au Media contacts: Dr Graeme Bethune Chief Executive EnergyQuest (08) 8431 7903 (0419) 828 617 Sean Whittington Field Public Relations (08) 8234 9555 (0412) 591 520

Level 30 91 King William St Adelaide SA 5000 Telephone (08) 8431 7903 Mobile 0419 828 617 Email gbethune@energyquest.com.au ABN 18 503 484 404 ACN 139 665 295 www.energyquest.com.au