Gas Infrastructure Crucial to Australia's Energy Transition
15 August 2023
Gas Infrastructure Crucial to Australia's Energy Transition
Gas pipeline and network infrastructure supporting the rollout of renewable energy can deliver emissions reductions across the energy sector sooner and at lower cost, according to a report released today by Boston Consulting Group (BCG).
The Role of Gas Infrastructure in Australia's Energy Transition finds that gas will remain essential through the energy transition including for industrial heat, peaking power generation and household space heating – especially in cold climates.
It shows that the greatest emissions reduction and system cost benefits are delivered by using new renewable electricity generation to prioritise the removal of coal and light vehicle fuels, not the electrification of gas. As coal is the dominant fuel source across the east coast electricity market, accelerating the electrification of end use gas could result in a period of fossil-fuelled electrification which runs counter to emissions-reduction objectives.
Importantly, the report also finds that if a range of gas end uses are electrified, this could exacerbate peak electricity demand by up to 50 per cent in some regions, putting further pressure on electricity infrastructure reliability and cost.
AGIG’s Chief Executive Officer, Craig de Laine said this demonstrates the critical role of gas infrastructure in a least-cost energy transition, showing we need more, not fewer, energy options.
“Transitioning the electricity sector alone will need incredible amounts of new infrastructure to replace exiting coal – thousands of megawatts of new generation and thousands of kilometres of transmission lines. This will take time and a great deal of investment.
“Renewable electricity currently accounts for only 8 per cent of primary energy used in Australia, despite our first wind-farm being delivered 36 years ago, reflecting the challenges in relying on only one-way forward to decarbonise our economy.
“We don’t need to make the electricity sector transition even harder and more expensive by shifting more energy demand onto a grid that is already challenged.
“The BCG report demonstrates the value of existing gas infrastructure as an option to meet decarbonisation targets at lower cost and risk, especially as renewable gases like hydrogen and biomethane begin to come online. Importantly, our customers, including Australia’s largest employers, are telling us they need renewable gas to deliver their own low carbon objectives.
“Our gas infrastructure is world-class and capable of delivering renewable gases to our customers at little incremental cost. It makes good sense to use existing infrastructure, which Australians have invested in, to deliver renewable energy while keeping our system secure and reliable. It’s why AGIG has been delivering a range of projects to scale up production and deployment of renewable gas blends in our networks.”
Background
AGIG owns, operates and invests in infrastructure which delivers gas to more than two million homes and businesses. It powers generators, mines, manufacturers and household appliances and the combined network makes us one of the largest gas infrastructure businesses in Australia.
We manage over 40,000km of world-class distribution networks, more than 4,300km of transmission pipelines and 60 petajoules of storage capacity, valued at a combined $10 billion, and employ approximately 400 Australians with more than 1,600 contractors working on our business.
We are committed to playing our part in supporting Australia’s climate objectives which are aligned to our own low-carbon goals to deliver 100% carbon-free gas by no later than 2050, with at least 10% renewable gas blends to homes and businesses by 2030.
We believe that gas networks delivering hydrogen, and renewable gas more broadly, will be critical if we are to achieve Australia’s ambitious low-carbon targets. In support of this, we are leading the Australian renewable hydrogen industry, with the establishment of Hydrogen Park SA, the largest electrolyser in Australia; the construction of Hydrogen Park Murray Valley; our Hydrogen Home initiative and other renewable hydrogen and biomethane projects in development.
For Further Information Contact
Rachel Cameron – Head of Corporate Affairs
M 0425 199 184
