The Australian gas industry is changing tack from focusing on exporting LNG and is stepping up its efforts to promote the fuel’s potential as a complementary rather than competing technology to renewables in power generation.

The move is a change in rhetoric of sorts for the Aussie gas industry, which has sometimes clashed with the renewables sector over subsidies, the share of the energy mix and the level of governmental support at national and state levels.

Aussie gas industry renews itself for future growth
(Natural Gas Daily: Sally Bogle: 27 Oct 2016)

Reproduced here with permission from
Interfax Energy Natural Gas Daily
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But this is changing, according to Damian Dwyer, director of economics at the Australian Petroleum Production & Exploration Association. He says the time is right to increase the visibility of the issue of gas’s role in the power mix.“Our view in general is about how gas can complement renewables and whether we have the policies in place to support gas and renewables working together,” Dwyer told Interfax Natural Gas Daily.

“We see gas partnering with renewables in the shift to a low-emissions energy mix, with gas providing a firm back-up capacity for times when the sun doesn’t shine and the wind doesn’t blow. It can provide stability of supply and lower emissions,” Dwyer added.

Gas’s role in the power mix has frequently been discussed in terms of the transitional role it can play while clean technologies are developed and become price-competitive on a large scale. But the Australian gas industry sees things differently, expecting gas to have a much longer-term role.

According to a report by the Jacobs Engineering Group for Australia’s Climate Change Authority, gas could account for up to 41% of power generation by 2030 compared with around 12% today, with renewables providing around 46%.

“This shows there is a strong growing role for gas in the coming decade in Australia,” Dwyer said. However, he cautioned that such growth would require the development of investment in onshore CBM fields, where 90% of the east coast’s gas reserves are located.

Exploiting onshore gas through fracking is becoming increasingly contentious in Australia. Victoria has banned the practice altogether, and the Northern Territory is looking to follow suit. The potential impact of fugitive methane emissions associated with fracking was highlighted in a recent report by the Melbourne Energy Institute commissioned by thinktank The Australia Institute. The report found the CBM industry could be significantly underestimating such emissions, potentially overriding the environmental benefits that gas can bring compared with coal.

Renewables and reliability

The need for reliable forms of generation capacity was highlighted in the recent South Australia blackouts. Extreme storms toppled high-voltage power lines and the state’s fleet of wind turbines was shut down to avoid damage, causing the transmission system to fail across the state. South Australia has upped its renewable generation capacity in recent years to replace mothballed coal-fired facilities.

The outages have generated significant debate at the state and federal level, as well as within the industry, on the merits of relying on renewables to supply a larger share of the power mix, and the discussion has become polarised in some areas.

But the incident also highlighted the lack of clear policy direction on the future of Australia’s energy mix and the role gas, renewables and other forms of generation can play to provide security and help Australia meet its emission reduction targets under the COP21 climate agreement.

Not everyone agrees there is a need for gas in Australia’s future generation mix. In a report released on Thursday by pressure groups Beyond Zero Emissions (BZE) and Sustainable Energy Now (SEN), Australia has the resources to become entirely fossil-fuel free.

“Australia could become entirely dependent on renewables to meet its power needs within 10 years, so there is no need for a transition fuel,” BZE Chief Executive Michael Lord told Interfax Natural Gas Daily, adding there is a compelling argument for severing the link with fossil fuels, including gas. “Relying on the volatility of an internationally traded commodity like oil and gas does not make sense for Australia when we have a huge wealth of renewable resources. Let’s prepare for the future now,” Lord said.

The BZE/SEN report predicts that renewable energy and energy efficiency will attract more investment over the next 20 years than the development of coal, gas and oil combined. It also says Australia’s economic renewable energy resource potential is much greater than its combined coal, gas, oil and uranium resources.

Around US$28 trillion is expected to be invested worldwide in renewable energy and efficiency equipment by 2035, BZE and SEN believe. “This investment pie is up for grabs and how much we want to take advantage of this is up to policymakers,” Lord said.

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