Australia’s pathway to 100 per cent renewable gas

AUSTRALIA’S PATHWAY TO 100 PER CENT

RENEWABLE GAS

By Jordan McCollum, National Policy Manager, Australian Pipelines and Gas Association (APGA)

Delivering renewable gases through new or repurposed gas infrastructure has attracted increasing interest across Australia, due to its lower cost pathway to gas use decarbonisation.

In the report Gas Vision 2050: Delivering the pathway to net-zero for Australia – 2022 Outlook, the Australian Pipelines and Gas Association (APGA) and Energy Networks Australia (ENA) draw on work produced by DNVGL to consider the steps required to enable the delivery of renewable gases to domestic gas customers.

Gas networks and pipelines are preparing to deliver renewable and decarbonised gases. The report by DNV-GL lays out actions that industry and governments need to take to achieve domestic gas decarbonisation.

While all pathways to net-zero gas require the introduction of hydrogen or a similarly abundant renewable gas, biomethane offers the most technically simple and cost effective early emission reduction opportunity.

Biomethane also has the advantage that it is designed to comply with today’s natural gas standards. This means it is able to be used in the natural gas infrastructure and appliances of today.

On the other hand, current appliance testing regimes in Australia only consider up to around ten per cent hydrogen, and while some infrastructure is hydrogen ready, other infrastructure may require upgrades to enable 100 per cent hydrogen uptake in the future.

Instigating a ten per cent hydrogen blend in today’s gas networks is still an important first step to developing 100 per cent renewable gas networks. This is because delivering hydrogen in a ten per cent blend can help solve the ‘chicken and egg’ problem of developing early hydrogen supply capability by providing early producers a large, receptive market.

This in turn can contribute to hydrogen production cost reductions and investor certainty. Importantly, customer choice is at the centre of all gas use decarbonisation pathways, protecting the rights of energy customers to choose whether gaseous or electrical energy sources are best suited to their individual needs.

Orderly transition towards net-zero gas in Australia requires three key steps to occur. DVN-GL has considered the actions required for each step using the five tenets of customer

focus; safety; security of supply; market development; and supply chain development.

The first step enables blending of at least ten per cent renewable and decarbonised gases into natural gas by 2030. This will help get the carbon neutral gas production industry on its feet.

Considering a blend of both renewable hydrogen and renewable methane, this percentage could be even higher, as only the percentage of hydrogen in gas networks is limited for use in gas appliances.

The next step in enabling a net-zero gas system is the development of 100 per cent hydrogen suburbs. Creating a mosaic of individual suburbs where hydrogen can be used in household hydrogen appliances will help develop the market for these appliances.

Individual suburbs and even individual households could use 100 per cent renewable sources of methane without the need for bespoke infrastructure or appliances as these renewable gases require no changes in infrastructure or appliances.

Individual hydrogen suburbs could then be used to build outwards, converting adjacent natural gas networks to hydrogen once supply can be developed. This leads into step three, which encompasses the ultimate goal: enabling 100 per cent renewable and decarbonised gas adoption.

We do not yet know whether the end solution will be 100 per cent zero carbon hydrogen, 100 per cent zero carbon methane, or a mix of the two. In any case, the necessary changes to networks and appliances will be most seamlessly delivered in a staged manner, ensuring safety and reliability is maintained at each step of the transition.

If sufficient, cost-effective sources of renewable methane are able to be developed, the above pathway for gas use decarbonisation could become substantially simpler, reducing the need to change infrastructure or appliances.

While some progress has been made on this pathway, remaining actions to enable 100 per cent net-zero methane are identified as requiring increased focus, in part due to the significant focus that hydrogen has received despite its greater technical complexity.

However, the pathway to enable 100 per cent renewable or decarbonised hydrogen requires many more actions to achieve each of the three industry development goals. While significant progress has been made with a solid work plan under way, other aspects require increased focus.

DNV-GL identifies the development of 100 per cent hydrogen or hydrogen ready appliances in Australia as receiving limited attention to date. This aspect requires significant focus for successful 100 per cent hydrogen market development, and a lack of attention in this area could jeopardise a future domestic hydrogen industry in Australia.

A range of cross-cutting activities have also been identified within the report. Customer engagement and government regulatory activity will require focus to enable either net-zero gas pathway.

From market access and certification to environmental and technical regulation, more work is required to enable this burgeoning industry to achieve its 2030 goals.

The most notable cross-cutting actions yet to be taken include the development of a Renewable Gas Target to support renewable gas develop in Australia. Having benefited greatly from a Renewable Electricity Target it is surprising that the Australian Government is yet to pursue a Renewable Gas Target as part of its emissions reduction policy agenda.

Ultimately, the market will decide on the least costly solution to gas use decarbonisation. However, the pace of renewable gas market development will have a significant impact on whether the opportunity of a lower cost renewable energy pathway is available at any point in time.

The DNV-GL report shows that the industry is already choosing to develop a net zero gas industry, but more work needs to be done.

It is hoped that by detailing the actions required through this report, the gas industry will act on the tangible actions which are outstanding, and both politicians and customers will see a clear pathway to carbon neutrality through the uptake of renewable and decarbonised gases.

For further information, please visit www.apga.org.au or email apga@apga.org.au.