The recently announced Victorian Gas Substitution Roadmap will push consumers onto coal, ignores the cost imposts caused by years of gas development bans in the State, and bizarrely proposes that other States should forego export revenue, according to the Australian Petroleum Production & Exploration Association (APPEA).
Energy Networks Australia acting chief executive Tamatha Smith said the Gas Substitution Roadmap released by the state government should allow for all options to be explored to support renewable gas development or customers could end up paying more.
She said: “Seventy per cent of Victorians rely on gas for heating and cooking.
“Meeting all this demand with electricity instead would be extremely difficult to achieve and more expensive for customers.
“In fact, the ‘Gas Vision 2050 – Delivering a clean energy future’ report demonstrates that net-zero emissions can be reached with hydrogen at half the cost of electrification.
“The best and least- cost way to achieve net-zero is to repurpose the existing gas pipelines and networks that supply these homes to provide clean renewable hydrogen and biomethane and develop our renewable electricity grid.”
Smith said the size of the energy transformation demanded a mix of solutions including electrification and renewable gas.
She continued: “This gives us diversity of energy supply – so we can ride through droughts in renewable generation – and retains customer choice.
“The challenge is to find the right mix of these solutions to reach net-zero emissions in a way that ensures the reliability and security of our energy system and minimises costs to customers.”
Ms Smith said Australia’s gas networks were undertaking renewable gas blending into domestic networks and had ambitious decarbonisation targets.
APPEA acting chief executive Damian Dwyer said the roadmap was philosophy over fact and would not only not achieve the government’s goals, but have the opposite effect.
Dwyer said: “In Victoria, more than 60% of electricity is still generated using higher emissions brown coal, and as has been made abundantly clear in the last month, renewables are simply not yet at high enough penetration to shoulder the load.
“That means encouraging consumers to switch to electricity is effectively switching to coal.
“Not only is a higher emissions option, the widespread failures of coal-fired generation over the past few months has risked reliability and seen costs increase – and ironically it was the very gas this government is trying to substitute that saved the day.
“With gas being “substituted” out of the energy mix, coal being put under even more pressure even as plants close and clear evidence that renewables can’t yet the do the job, this roadmap is heading in the wrong direction.”
Dwyer also said the roadmap was also sent a disappointing message to potential investors in new gas supply – which would simply further exacerbate costs caused by long standing bans on development.
The Australian Energy Regulator has found that gas users in southern states such as Victoria are paying $2 more per gigajoule simply because of the cost of bringing gas down from Queensland.
Dwyer continued: “The industry is keen to build on its massive investment in Victoria.
“This would make sure local gas keeps flowing to manufacturers, homes and businesses, is available to back up ageing brown coal and intermittent renewables, and create more jobs.
“Instead, the Victorian Government is proposing that Queensland forego export revenue from its highly successful onshore gas industry to send it south, while Victoria puts up the closed for business sign again.
“The roadmap claims to be about choice but it tries to pull the wool over consumers’ eyes about the very things that matter to them – cost, reliability and emissions reduction.”
