Undated postcard of Tungatinah Power Station (Tasmaniana Library, SLT)
Tasmania's first European settlers used water to power most of their myriad flourmills for almost a century. Not surprisingly, when they embraced the new technology of electricity in the 1880s (ahead of most of the industrially developing western world) to light their towns, mines and factories, they frequently installed small hydro-electric schemes.
The promise the island's 900-million tonne annual rainfall-fed waterways offered was only recognised after rapid advances in electrical transmission technology prompted the University of Tasmania's Professor of Mathematics & Physics, Alexander McAulay, to design in 1905 a major hydro-electric scheme based on the Central Plateau's Great Lake. Six years later, a Melbourne-based metallurgist-entrepreneur, James Hyndes Gillies, began to build McAulay's Great Lake scheme in order to commercialise a new electrolytic zinc- making process he had invented.
When Gillies' Hydro-Metallurgical Company Pty Ltd went broke in 1914, the Tasmanian government took over the scheme, and its newly created Hydro-Electric Department (HED) completed it in 1916. The capital cost was largely met by a thirty-year bulk power supply contract negotiated with the Broken Hill-based Amalgamated Zinc for the manufacture of zinc at Risdon. The HED also aggressively marketed electricity to Hobart households and shops, Hobart Council and Hobart Tramways. During the 1920s there was a steady growth in demand from industrial and retail consumers, and the HED's distribution system was gradually expanded to include population centres around the state.
In 1929 the HED was reconstituted as the Hydro-Electric Commission (HEC) and given far-reaching powers to exploit the state's waterways, take over municipal schemes, regulate electrical tradesmen, installations and appliances, and raise government-backed loans to fund future capital development. By the late 1930s most households on the mainland of Tasmania were connected to electricity. When several big companies moved into the state to process its rich native timber resources, the HEC was compelled to begin building a second major hydro-electric scheme, based on the waters of the River Derwent system.
The HEC's growth into the only statewide electricity utility (and the most powerful government business in the country) was characterised by a uniform system of retail pricing, the construction of some of the largest civil works projects ever attempted in Australia, the employment of a workforce of thousands, and a policy of hydro-industrialisation which saw a series of bulk electricity metal and timber processors settle in the state. It was also marked by public criticisms of its exploitation of waterways traditionally relied on by farmers for irrigation, the unreliability of parts of its regional retail network, and the low pricing regimens of its bulk industrial supply contracts. However, the Hydro consistently employed world-class engineering in all its generation, transmission and distribution works. It became a world pioneer in rockfill dam building and many of its civil works, like the eggshell-shaped concrete Gordon Dam on the Gordon Power Development, were unique.
By 1940 the HEC's belated efforts to remedy a threatened shortfall in generating capacity by building the Derwent scheme had highlighted problems in its senior administration, which became the subject of a government Board of Enquiry. This resulted in a government subsidy aimed at reducing electricity prices in rural areas and re-uniting the design and construction arms of electrical and civil engineering branches. The Commissioner (whom the Board had mainly blamed for the HEC's ills) survived to sack several of his senior executives. In 1967 another shortfall in capacity caused by a prolonged drought forced the HEC to build its only thermal power station, an oil-fired development at Bell Bay, 1969 (which has since been converted to use natural gas).
At about the same time, a decision to significantly enlarge the hydro-electric system by building a scheme based on the south-west's Gordon River drew widespread protests over the contingent flooding of Lake Pedder and its unique floral and faunal ecosystem. Though the protests proved futile, they engendered a national re-evaluation of the relative merits of exploiting or preserving significant wilderness areas, and led to the formation of the world's first conservationist political party, the United Tasmania Group. In 1980, when the HEC planned to build another big hydro-electric scheme in the south-west and dam the Gordon River, local conservationists mounted a campaign to save 'Tasmania's last wild river' which aroused the emotions of middle-class urban dwellers across Australia and abroad. The campaign won a World Heritage listing for the Franklin and a promise that the incoming Australian Labor government would halt the power scheme. The HEC abandoned the scheme when the High Court found that the External Relations powers enjoyed by the Commonwealth under the Australian Constitution gave it the right to honour its international treaty obligations by preventing the flooding of the Franklin, notwithstanding Tasmania's constitutional land use rights. (See Gordon-below-Franklin.)
In 1994, with the commissioning of the Anthony power scheme on the west coast, Tasmania had seven major power developments and 27 power stations. No further economically or politically feasible major hydro-electric schemes were currently under consideration. However, since 1978, the HEC had been experimenting with another form of renewable energy which suited Tasmania's climate and geography, wind power. In 1998 the HEC commissioned the first stage of its first wind farm – three 250-kilowatt generators sited on Huxley Hill, King Island. In 2004, the first half of a 130-megawatt wind farm at Woolnorth, on the state's far north-west, was commissioned. Tasmania was now producing 60 percent of Australia's renewable energy and had plans to build a 160-megawatt wind farm at Heemskirk on the west coast, a 140-megawatt wind farm at Musselroe in the north-east, a 66-megawatt wind farm at Cathedral Rocks on South Australia's Eyre Peninsula, plus several mini hydro-electric schemes in Tasmania and South Australia.
Meanwhile, in 1998, a decade of commonwealth-state negotiations aimed at increasing competitiveness of Australia's energy industry culminated in the creation of a National Electricity Market, and the HEC disaggregated into three separate businesses so it could participate. Hydro Tasmania (the owner and operator of Tasmania's dams and power stations) remained a Government Business Enterprise, and Transend Networks Pty Ltd (the owner and operator of its high voltage transmission network) and Aurora Energy Pty Ltd (the owner of its low voltage distribution network) became state-owned corporations.
In 2000 Hydro Tasmania commissioned the British transmission company, National Grid, to build a High Voltage Direct Current interconnector across Bass Strait at an estimated cost of $482 million so that it could trade electricity interstate from 2005, selling its attractively priced renewable water and wind power to the mainland during times of peak load and buying back the mainland's fossil-fuelled thermal power as base load, off-peak.
Further reading: Annual reports of HED (1915–30), HEC (1930–1997) and Hydro Tasmania (1998–2003); Report of the board of enquiry on the HEC, 18 March 1941, SLT; K Dallas, 'Water Power in Tasmanian History', THRAPP 8/4, 1960; R Garvie, A million horses, Hobart, 1962; A Scanlon, Water power, Hobart, 1995; A Gillies, Tasmania's struggle for power, Burnie, 1984; P Read, The organisation of electricity supply in Tasmania, Hobart, 1986; R Lupton, Lifeblood, Sydney, 2000.