Gas and energy policy

By Jordan McCollum, National Policy Manager, APGA

One Victorian department demonstrates a robust approach to gas industry decarbonisation through its roadmap consultation paper while another agency is making the road to decarbonisation a rocky one.

Following months of strong engagement with gas industry stakeholders, the Victorian Department of Environment, Land, Water and Planning (DELWP) released its consultation paper seeking input into its Victorian Gas Substitution Roadmap (VGSR). Demonstrating a nation leading progressive approach to the future of the domestic gas industry, the VGSR seeks to develop a roadmap to guide the state towards gas use decarbonisation by 2050, actively considering renewable gases as a gas decarbonisation option for Victoria.

DELWP representatives have demonstrated a robust and objective approach to the VGSR, with a clear understanding of the importance of gaseous energy and the interplay between gas, electricity, and Victorian prosperity. But the release of the VGSR consultation paper highlighted DELWP’s challenge – the bulk of available information regarding gas decarbonisation was developed prior to recent developments in renewable gas viability, when the only viable gas decarbonisation solution was electrification.

APGA was keen to ensure DELWP was able to consider all relevant information in developing the VGSR, and our submission aimed to provide it. APGA’s first priority was to reinforce the importance of the impacts of gas use decarbonisation on people and their livelihoods, proposing that the best possible outcome for Victorian households and businesses was the lowest cost, most reliable energy system that delivers net zero emissions by 2050.

The welfare and livelihoods of millions of Victorians is at stake. Next, APGA elaborated on what makes renewable gases, and gaseous energy in general, such a valuable form of energy.

APGA highlighted that gaseous energy is highquality, affordable energy. Gas has innate qualities that make it a highly usable, transportable, storable and ultimately affordable form of energy for a wide range of customers. These qualities are innate to all gases, renewable or otherwise.

Renewable gases themselves are viable carbon neutral energy technologies being developed around the world. Growing at a faster rate than solar PV, renewable gases are predicted to contribute 13 per cent of total global energy consumption in the International Energy Agency’s net-zero emissions 2050 scenario.

A decarbonised energy system represents a huge opportunity for Victoria. Victoria’s gas infrastructure delivers more energy today at lower cost, lower emissions intensity and greater reliability than Victoria’s electricity infrastructure. Existing gas infrastructure represents a greater opportunity than existing electricity infrastructure to deliver lower cost renewable energy to Victorian households and businesses.

This opportunity is due to the cost effectiveness of gas infrastructure. Existing and new gas infrastructure both cost significantly less than equivalent electricity infrastructure on a throughput, maximum capacity, and energy storage basis.

Frontier Economics reflects this in The Benefit of Gas Infrastructure to Decarbonise Australia, which predicts that decarbonising domestic gas demand with 100 per cent renewable hydrogen will cost Australians $12.5 billion less than electrification in 2050.

Renewable gas pathways also offer a more reliable energy future for Victorians, enabling the State access to complementary renewable gas and renewable electricity systems. The gas system also offers superior emissions outcomes in the short term, with Future Fuels CRC research identifying that electrification of gas use in Victoria will result in higher emissions until 2035.

Gas is key to net-zero emission electricity as well. The Gratton Institute and Frontier Economics identify that a net-zero National Electricity Market comprised of 90 per cent variable renewable generation and supported by around 10 per cent gas power generation delivers more affordable decarbonised electricity.

Despite all the above and the robust, objective approach taken by DELWP, it is not all smooth sailing towards the lowest cost most reliable decarbonised gas future for Victoria. Victorian independent government advisory body Infrastructure Victoria has also released its less rigorous and consultative analysis of gas use decarbonisation in Victoria.

In its interim report, Infrastructure Victoria proposes the demolition of 80 to 100 per cent of existing gas infrastructure in Victoria, recommending electrification-based decarbonisation. APGA hopes that Infrastructure Victoria will note the contents of its submission and pivot towards a recommendation which values the safety, economic and social impacts on Victorian households and businesses as highly as it values environmental impacts in its scenarios.

You can find APGA submissions to the VGSR and the Infrastructure Victoria Interim Report in the submissions section of the APGA website.