The tail end of 2023 has seen substantial consultation from governments on the future for gas customers, with a focus on customer electrification. Jordan McCollum, APGA National Policy Manager talks about a stalled electricity sector transition.
Additional funding announced for the national Capacity Investment Scheme in late November 2023 confirmed what energy industry experts had been saying for some time: the electricity system isn’t on track to achieve 82 per cent renewable electricity by 2030.
But adjacent policy consultation hasn’t appeared to have caught up with this reality just yet. From the Senate Inquiry into Residential Electrification to the Victorian Renewable Gas Consultation and the Future Gas Strategy, most consultation considering gas use decarbonisation assumes electricity will decarbonise it.
The Senate Inquiry into Residential Electrification terms of reference is founded on the preconception that households will electrify. Despite this, the terms of reference do consider many of the challenges of an “electrify everything” approach.
As can be seen in APGA’s response to this consultation (available in the submissions section on APGA’s website), this was a perfect opportunity to discuss the benefits of parallel renewable gas and renewable electricity pathways for households.
Based on recent years of research, APGA made the case that electrification is not the only option to decarbonise households. We proposed that pursuing household electrification as the only decarbonisation solution introduces unnecessary social and economic risks, and that allowing households to choose both electrification and renewable gas accelerates the transition.
In the meantime, new renewable electricity can deliver cheaper decarbonisation elsewhere in the economy, such as in achieving the Federal Government’s pledge to achieve 82 per cent renewable electricity by 2030.
Alongside this, the Victorian Government took a strong step in the right direction by consulting on a renewable gas target. Focusing on incentivising both biomethane and hydrogen uptake via a percentage-of-gas-use style target, the paper appeared to be a positive change of heart from the typically electrification-focused state.
Unfortunately, Victoria’s typical electrification focus was still at the heart of even this process. The consultation paper concluded that only customers which physically could not electrify should be allowed to decarbonise via renewable gas, excluding commercial and residential customers from inclusion in the scheme.
Worse, the paper insinuated that residential and commercial customers could be economically liable for the scheme and considered ways to shield low-income households from additional cost burden. This is despite the fact that the scheme would prohibit households from benefiting from the scheme.
Another policy which dehumanises gas customers, this comes alongside moves by the Victorian Energy Minister to drive up gas appliance and connection costs through prohibiting distribution network funded appliance discounts and amortisation of connection charges.
There is hope however in the federal consultation on the Future Gas Strategy. This multi-decadal strategy in development under the resources ministry seeking to both ensure security of gas supply while delivering decarbonisation of gas users.
While the strategy consultation paper wrestles with the need to achieve both ends simultaneously, it currently only considers natural gas supply. This provides an opportunity for expansion of the strategy to include renewable gases as well as natural gas, therein introducing the solutions to its most challenging goals.
By expanding the Future Gas Strategy to cover natural and renewable gases, the means to secure supply and reduce demand come into the remit of the strategy. Just like electricity supply under Minister Bowen’s plan to achieve 82 per cent renewable electricity is managed as all electricity, fossil and renewable, gas supply can be managed, secured and decarbonised in exactly the same way.
And this is the great benefit of the scale of the energy decarbonisation challenge. We can learn from what worked in one sector – electricity decarbonisation – and apply it to another – gas decarbonisation.
This is at the core of the gas infrastructure industry’s call for a renewable gas target. Setting targets for renewable gas as a per cent of all gas consumed in Australia, much the same as was done in electricity, can deliver both decarbonisation and increased gas supply.
It is hoped that the Federal Government will take up this opportunity for the Future Gas Strategy across the coming years, and in doing so secure decarbonisation and gas supply for all gas customers, be they industrial, commercial, or residential – even in the great state of Victoria.
This article featured in the January edition of The Australian Pipeliner.
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