Pivotal role for gas in manufacturing
Gas will continue to play a pivotal role underpinning the success of the Australian manufacturing sector over the long term, APGA said in a submission to the Modern Manufacturing Strategy.
The $1.5 billion Modern Manufacturing Strategy was announced in the Federal Budget and the Technology Investment Roadmap Taskforce sought comment on the plan.
APGA said the key long-term advantages of gas for the manufacturing sector included:
- Direct burn gas for the purpose of supplying industrial heat is priced more competitively than electricity – with the delivered price of gas for commercial and industrial users standing at just over one-quarter the equivalent electricity price ($39 per MW/h vs. $137 per MW/h – in Victoria).
- Gaseous fuels are an indispensable energy source for some manufacturing processes requiring high-quality heat and cannot be practically substituted by electricity.
- Direct burn gas is the low carbon option for supplying heat for industrial processes in Australia (lower carbon intensity than the NEM average for electricity generation). The carbon intensity of direct burn gas is 52 kg CO2 equivalent per GJ (187 kg per MW/h), whereas the average carbon intensity of the NEM in 2019 was around 205 kg CO2 equivalent GJ (738 kg per MWh).
- The use of direct burn gas for industrial heat therefore has a carbon intensity around 25 percent of that of NEM delivered electricity (where the substitution of gas with electricity is practical).
- Gas has its own cost-effective decarbonisation pathway: see the updated Gas Vision 2050 report.
- Government and industry are working constructively together on policies to make domestic gas prices internationally competitive (e.g. the National Gas Infrastructure Plan).
Read the submission.