Gas infrastructure to play key role in Australia's energy transition: report
As Australia embarks on a journey toward a sustainable energy future, the role of gas pipeline infrastructure emerges as a crucial pillar supporting this transition. A recent report by the Boston Consulting Group (BCG), commissioned by infrastructure companies AGIG, APA Group, and Jemena, sheds light on the significance of gas infrastructure in Australia's evolving energy landscape.
Titled The Role of Gas Infrastructure in Australia’s Energy Transition, the report unveils the role that gas pipelines play in enabling the 'renewification' of the nation's energy system. As the pursuit of net-zero emissions gains momentum, gas infrastructure proves to be a linchpin in realising emissions reductions more swiftly and at a reduced cost.
The study delves into three distinct timeframes that shape Australia's energy evolution: the present energy system, the phase of transition, and the anticipated net-zero emissions era. Through this lens, the report uncovers a range of insights that underscore the significance of gas pipelines.
In today's energy landscape, natural gas stands as a cornerstone, contributing to 27% of Australia's primary energy consumption. Its versatility becomes apparent as it powers various sectors, from industry to residential, commercial, and electricity generation. Particularly suited for applications requiring rapid response and high-energy delivery, natural gas is a driving force behind high-grade heat, peaking generation, and space heating.
Yet, as the nation steers toward reduced emissions, the role of natural gas will inevitably shift. Efforts to 'renewify' the electricity grid gain prominence, prioritising the elimination of coal and electrification of light transport for greater emission reductions and cost savings.
In the energy transition phase, the report emphasises the importance of natural gas. Estimates suggest that it could account for a substantial portion, ranging from 40% to 90%, of Australia's domestic consumption by 2040. While some sectors may opt for electrification due to economic incentives, natural gas remains indispensable for energy-intensive applications that resist easy electrification.
As Australia approaches its net-zero emissions aspirations, existing gas infrastructure is poised for a transformative role. Repurposing these assets to facilitate the distribution of low carbon gases, such as biomethane, synthetic methane, or hydrogen, emerges as a promising strategy. This integrated clean energy system, encompassing both electric and low carbon gas networks, emerges as a potential low-cost pathway to achieving net-zero emissions.
This strategic approach ensures the preservation of vital gas infrastructure, offering a competitive option for select consumers while minimizing the overall transition cost. However, the report underscores that an integrated clean energy system will necessitate meticulous planning, coordinated efforts between electricity and gas networks, and prudent cost-recovery strategies.