Sector study

Most of the diesel is on wheels

Sector study 6 August 2026 9-minute read Market sizing · Mine energy · Australia

Australia burns 1,269.9 petajoules of diesel a year. Only about four per cent of it is burned to make electricity — a national ceiling of roughly 551 megawatts of average electrical output, mine sites and remote towns included. Take out the mines and what is left is 45 megawatts, all of it owned by state utilities. If you are sizing a diesel displacement market from the top down, that is the whole of it.

At a glance
  1. Four per cent. Of 1,269.9 PJ of national diesel consumption, roughly 50 PJ goes into electricity generation. Independently, the official generation statistics report 4,823 GWh of oil-fired generation — 551 MW average. Two different sides of the accounts, same order of magnitude.
  2. Forty-five megawatts. Subtract mine sites and the remainder is 148 registered remote power stations totalling 45.4 MW average — Energy Queensland, NT Power and Water, and Western Australia’s regional utility. That is town supply, not facility supply.
  3. Everything else is mobile. Road transport 679 PJ, agriculture 89 PJ, rail 52 PJ, construction 27 PJ. There is no central power station to connect to, no single counterparty, no interconnection point.
  4. Roughly 390 MW of diesel generation is not booked to mining at all. It sits under electricity supply, because at most mine sites the power station belongs to an independent power producer and is reported under the operator’s industry. Two independent calculations land on the same figure.
  5. The one thing that would rewrite all of this is haul fleet electrification — equivalent to 3,900–4,650 MW of new mining electrical load nationally, against Australian mining’s entire current electricity consumption of 5,339 MW. It also forfeits the fuel tax credit on every litre displaced.

Why size it top-down at all

Most target lists for remote energy work are built from the bottom up: find the sites, estimate their load, rank them. That is the right way to find a client and the wrong way to find out whether a market exists. A bottom-up list cannot tell you what it is missing, and it has no denominator — there is no point at which it says this is all of it.

National energy statistics can. Australia publishes consumption by industry division and by fuel, and generation by fuel, from the same statistical spine. Reconcile a bottom-up site list against those totals and you get two things a site list alone never gives you: a ceiling, and a named residual. Everything below comes from that reconciliation, for the 2023–24 financial year.

Four steps and the market is gone

Exhibit 1 Four steps reduce a 1,270 PJ fuel pool to a 45 MW market
1,269.9 PJ National diesel consumption 100%
299.6 PJ Diesel in the mining division 23.6%
~50 PJ Diesel burned to make electricity — 551 MW average 3.9%
~4.3 PJ Still generating once mine sites are removed — 45.4 MW 0.34%

The third step is corroborated from the other side of the accounts: national oil-fired generation is reported at 4,823 GWh, or 551 MW average. It is a ceiling — mine sites, remote town stations and factory standby sets are all inside it. The final bar is drawn wider than scale so it remains visible.

Source: Australian energy statistics (consumption by industry and fuel; generation by fuel), 2023–24; national greenhouse and energy reporting register of designated generation facilities. Analysis by Heliovulcan. Conversion from fuel to electrical output assumes 33 per cent thermal efficiency.

Where the other 96 per cent is

Exhibit 2 One line in the national diesel account is a power station; the rest is engines that move
UsePJShareForm
Road transport679.453.5%Mobile
Mining299.623.6%Predominantly haul fleet
  — Coal mining151.4Qld 95.3 · NSW 53.2
  — Metal ore and quarrying145.4WA alone 120.3
  — Oil and gas extraction2.8LNG plants burn gas, not diesel
Agriculture, forestry, fishing88.87.0%Tractors, harvesters, vessels
Rail transport52.04.1%Mobile
Electricity supply42.13.3%The only generation line in the table
Commercial and services32.12.5%Dispersed small sets
Construction26.52.1%Excavators
Manufacturing13.91.1%Mostly standby
Total1,269.9100%

Source: Australian energy statistics, consumption by industry and fuel, 2023–24. Analysis by Heliovulcan.

One line in that table is a power station. The rest is engines that move.

A market made of vehicles has no interconnection point, no single counterparty, and nothing to put a battery next to.

What is left after mining, line by line

×
Registered remote town power stations 148 sites · 45.4 MW
Energy Queensland 15.2 MW, NT Power and Water 15.1 MW, WA's regional utility 6.2 MW. All three are government-owned regional utilities supplying towns, not industrial facilities — a category that should be excluded from a facility target list rather than counted in it.
×
Agriculture, forestry and fishing 88.8 PJ
Tractors, harvesters and vessels. No central station, no connection point, no counterparty of any size.
×
Construction and commercial services 26.5 + 32.1 PJ
Excavators and dispersed standby sets. Per-site scale sits below the entry threshold of any third-party power contractor operating in this market.
×
Manufacturing 13.9 PJ
Largely standby generation. Manufacturing's real energy story is purchased electricity — 6,159 MW of it, overwhelmingly grid-connected. That is a tariff and contracting question, not a diesel displacement one.

Four categories, four closures. This is not a market that competitors have already taken. It is a market that was never there — and knowing the difference matters, because the two call for completely different responses.

The 390 megawatts that is not booked to mining

The one generation line in the diesel table — 42.1 PJ under electricity supply — is larger than the registered town stations can account for. Subtract them and roughly 37.8 PJ is unexplained, equivalent to about 390 MW of average electrical output.

Approach it from the generation side instead and the same figure appears. Oil-fired generation in the three states where off-grid operation is material — Western Australia, Queensland and the Northern Territory — totals 3,779 GWh, or 431 MW. Remove those states' town stations and 387 MW remains.

Two calculations with no shared inputs, landing within one per cent of each other.

The explanation is structural. At the majority of Australian mine sites the power station is owned and operated by an independent power producer under a long-term power purchase agreement. Its fuel is reported under the operator's industry classification — electricity supply — not the mine's. The generation is real, it serves mining, and it is invisible in any analysis that reads the mining line and stops there. This attribution is an inference drawn from the accounts, not a field in any register.

It has a corollary worth stating plainly: if most mine power station diesel is booked elsewhere, then mining's own 299.6 PJ is almost entirely mobile plant. Haul trucks, dozers, drills, light vehicles. Which is exactly what the cascade above implies, arrived at independently.

The one door that is not closed

Electrifying the haul fleet does not trim this market. It rewrites it.

Exhibit 3 Haul fleet electrification would add more load than Australian mining consumes today
SegmentDiesel todayEquivalent electrical loadFuel tax credit forgone
Australian mining, total299.6 PJ3,900–4,650 MW~A$3.9bn/yr
  — Metal ore and quarrying145.4 PJ1,900–2,250 MW~A$1.9bn/yr
  — Coal mining151.4 PJ1,970–2,340 MW~A$2.0bn/yr

Source: Australian energy statistics, diesel consumption by industry, 2023–24. Electrical equivalents assume diesel end-use efficiency of 35–45 per cent against an electric drivetrain at 85–92 per cent; fuel tax credit at the full off-road rate. Analysis by Heliovulcan.

Set that against the sector's present position. Australian mining consumes 5,339 MW of electricity in total, and the off-grid mine generation fleet we screen sits at roughly 340–525 MW. Electrifying the fleet would raise mining electricity demand by something like seventy to ninety per cent, and in Western Australian metal mining it would multiply off-grid station capacity several times over.

Two things hold it back, and only one of them is technology.

The first is the fuel tax credit. Off-road diesel in Australian mining attracts a full rebate, so an electric fleet is not competing against the pump price — it is competing against a subsidised price, and every litre displaced gives the rebate back. We have written elsewhere about why any mine energy business case has to be net of that credit; at fleet scale the same arithmetic becomes a national-order number.

The second is timing. Haul truck service life and remaining mine life are often the same order, and a mine whose reserve life will not outlast one more fleet cycle will never buy the fleet. The window, where there is one, is an alignment: fleet replacement due, mine life long enough to amortise, and the power purchase agreement approaching its term. Fleet age is not publicly available site by site. Mine life and contract expiry are. That asymmetry should decide the order in which a screen asks its questions.

The largest new load will appear at sites that consume no electricity at all today — which is precisely where a screen keyed on existing generation will never look.

That last point is not hypothetical. On one remote gold operation we screened, the site registers zero generation and zero purchased electricity — it runs on diesel plant. Convert its energy use to an electrical equivalent and it becomes an 8.7–10.4 MW average load, implying an installed station of 25–35 MW: several times the size of a real power station at a neighbouring operation in the same group. A screening layer built on who has a power station today classifies that site as no target at all.

How this was done

A bottom-up site list, tested against a national account built a different way

Heliovulcan maintains a site-level screen of Australian mine on-site generation — 370 sites, with fuel, scale band and grid position established from regulatory filings rather than assumed from industry codes. That screen answers “which sites” but cannot answer “is that all of them”, because a list has no denominator.

The denominator comes from national energy statistics, which publish consumption by industry division and by fuel, and generation by fuel, from the same statistical spine. Building the market from the sites and then testing it against those totals gives two things a site list alone never gives: a ceiling, and a residual that has to be named rather than shrugged off.

One check governs whether any of this counts. Two figures agreeing is only evidence if their inputs do not overlap — a facility’s reported emissions and its regulator-published intensity factor will always agree, because one is built from the other. The 390 MW finding in this note is reported because two calculations reached it from inputs with no shared source: an industry-classified energy balance on one side, contractor project registers and state generation licences on the other.

What this changes in a screen

This note sits in F3 — Microgrid boundary, but its real subject is the denominator. Three disciplines follow from it. Size top-down before you rank bottom-up — a site list with no ceiling cannot tell you when it is finished, and here the ceiling is 551 MW nationally for diesel-fired generation of every kind. Check which industry line an asset is reported under before you attribute its load — roughly 390 MW of mine power generation is booked to electricity supply, and any analysis that reads the mining line alone will miss it. Screen on tomorrow's load, not today's meter — if fleet electrification is in scope, the sites with the largest future load are the ones with no electrical load now. For the adjacent questions, see grants pay for the first one, not the tenth and weak-grid mines do not buy cheap energy.
A negative result reached in days from public data is worth more than a positive one reached in months from hope.
Sources Australian energy statistics 2023–24 (consumption by industry and fuel; generation by fuel and state); national greenhouse and energy reporting register of designated generation facilities; Safeguard Mechanism emissions-intensity determinations; national pollutant inventory; state generation licences and environmental approvals. All publicly published.
Period Financial year 2023–24 throughout, except the generation reconciliation, which uses 2022–23 where 2023–24 was not available. The mixing is deliberate and is flagged where it occurs.
Assumptions Conversion from fuel to electrical output assumes 33 per cent thermal efficiency. Across a 30–38 per cent range the 390 MW figure moves between roughly 340 and 450 MW, without changing the conclusion. Haul fleet electrical equivalents assume diesel end-use efficiency of 35–45 per cent against an electric drivetrain at 85–92 per cent.
Limitations Some state and sub-division cells are suppressed in the official tables for confidentiality, so sub-totals do not always sum to division totals; division totals are the reliable figures. Attribution of the 390 MW to contractor-operated mine power stations is an inference drawn from the accounts, not a field in any register.
Status Screening-level analysis. Not a sizing, connection, procurement or investment result, and not legal, financial or engineering advice. Figures should be independently verified before any commercial decision.