Gas Infrastructure’s Potential Role in Energy Transition 

New report authored by Boston Consulting Group: The Role of Gas Infrastructure in Australia’s Energy Transition finds retiring coal and liquid fuels as energy sources before gas will have the greater impact in reducing emissions and system costs.

Switching from gas to the coal dominated electricity system risks a period of fossil-fuelled electrification in the short-term.
Renewable gases have the potential to help decrease Australia’s emissions profile while delivering energy system diversity and enabling consumer choice.

Accelerated electrification – in the short-term – inadvertently misses the opportunity for a faster reduction in Australia’s emissions profile – that’s the key finding of a new report from Boston Consulting Group titled: The Role of Gas Infrastructure in Australia’s Energy Transition.

Commissioned by Jemena, Australian Gas Infrastructure Group (AGIG), and APA Group, the report found that for every new megawatt of renewable electricity generation that is produced, the greater emission reduction impact comes if it is used to replace power sourced from Australia’s coal-fired generation fleet as well as electrifying liquid fuels used in light transport, rather than displacing energy delivered by Australia’s gas pipelines and networks.   

Commenting on the report Jemena’s Managing Director, Frank Tudor, said that Australia’s gas networks can enable greater amounts of renewable electricity to be brought online without compromising system reliability in the short-term, while in the long-term renewable gases such as biomethane and green hydrogen (produced using renewable electricity) can be deployed for use across homes, businesses, and hard-to-abate sectors.

“Our goal is the same – delivering net-zero emissions at lowest cost without compromising security of supply. Our concern is that by pursuing accelerated electrification we will only switch energy use from the gas network to the electricity grid, which currently sources upwards of 65 per cent of its energy from coal,” said Mr Tudor.

“If we’re serious about decreasing emissions at the lowest system cost, our focus should be on retiring our coal and liquid fuels first, to do otherwise may have the bizarre outcome of actually increasing Australia’s carbon footprint in the short-term.

“At the same time, our customers are also telling us that they enjoy the benefits of gas and want to continue to be able to access it to cook their food, heat their homes, and for hot water. Renewable gases such as biomethane and green hydrogen are demonstrating that gas, like electricity, can be renewable. What we need now is support, such as a Renewable Gas Target - facilitating a minimum required amount of renewable gas production - to help spur the development of a renewable gas sector.”

Mr Tudor said that Australian homes and businesses are best served if they able to choose how they power their lives.

“We know there are around 30PJs of potential biomethane sources which are in close proximity to our gas distribution network in New South Wales. This is enough gas to meet current residential demand, of circa 27PJs, per annum across our gas network.”

“We also know that there’s no silver bullet; each home and business needs to consider how it will best meet its energy needs, and they should have choice in how they do this. Not only can our gas networks deliver energy system reliability and increasingly renewable gases, but they can maintain customer choice.”

A copy of The Role of Gas Infrastructure in Australia’s Energy Transition is available here.

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Jemena Media Contact
Michael Pintabona
0428 742 804