Technology Investment Roadmap has implications for gas role

Several reports have been published in the last month or two highlighting the role of gas in both the post COVID-19 economic recovery and helping reduce greenhouse gas emissions over the long term, writes APGA National Policy Manager Andrew Robertson.

However, the Technology Investment Roadmap Discussion Paper had perhaps the most significant long-term implications for the role of gas in the Australian economy.

The discussion paper takes a flexible, technology neutral approach to developing a framework to accelerate low emissions technologies – so if a technology can contribute to lower emissions, then it can be considered under the Roadmap on its own merits. This approach is strongly welcomed by APGA.  It means that the relatively low emissions intensity of natural gas, the strong decarbonisation pathway of gaseous fuels (in their own right or supporting greater renewables uptake) and the economic value of cost-effective, domestic energy resources puts gas in an excellent position to play a strong and positive role in Australia’s energy mix for the foreseeable future.

Two key areas of opportunity for the gas industry that are compatible with the goals of the Roadmap are: the production and distribution of low or net zero carbon gases such as biomethane and ‘blue’ hydrogen; and using gas-fired power generation to support much greater uptake of wind and solar electricity generation in the electricity system (i.e. renewables firming).

T

his is not to say that the discussion paper tells the whole story. For example, often overlooked in discussions around energy investment and initiatives to decarbonise the energy system is the fact that ‘electricity’ is not synonymous with ‘energy’.

Natural gas provides more end-use energy to the Australian economy than electricity, with 943 PJ gas delivered to Australian end-users vs. 835 PJ electricity in 2017-18 (Australian Energy Update 2019). Gaseous energy is used as high-quality heat across all economic activities and is in addition to the 21% of electricity that is generated by gas-fired power generators. It is a critical part of Australia’s energy & manufacturing prosperity mix.

To take another example, it is important that government recognises its role in creating and maintaining a favourable investment environment. Government must get this right so that industry can make the high level of investment that is critical to unlocking the potential of gas to play a key role in accelerating the development and deployment of low emissions technologies in Australia.

One case in point is the pipeline regulation RIS under consideration by the COAG Energy Council. The RIS includes a range of policy proposals, some of which – if adopted – could lead to heavier-handed regulation and a consequent loss of market flexibility, and a less favourable investment climate. The importance of avoiding such counter-productive outcomes and retaining strong incentives for pipeline infrastructure investment and maintaining the flexibility and speed of the commercial investment process cannot be over-stated. 

Read APGA's submission to the discussion paper.