Executive Summary

The Australian Pipelines and Gas Association (APGA) welcomes the opportunity to comment on the Economics References Committee’s inquiry into residential electrification.

APGA encourages the Committee to consider this inquiry as one into residential decarbonisation, rather than residential electrification.

Residential gas use is responsible for around 2% of emissions in Australia and represents one of the most costly and challenging sectors to decarbonise. The gas infrastructure sector can play a major role in supporting least cost decarbonisation of household energy use.

In many circumstances, individual households will face lower decarbonisation costs by using renewable gas to replace their natural gas use rather than electrifying their gas demand.

Beyond individual household costs, it is apparent that a future integrated energy system delivering renewable electricity and renewable gas to meet Australia’s energy needs is highly likely to be lower cost than a single energy system delivering only electricity.

APGA makes the following points within its submission:

Electrification is not the only option to decarbonise households.

Renewable gas can be used to decarbonise gas supplied to homes rather than replacing it, and doing so would be cost competitive with electrification.

Pursuing household electrification as the only decarbonisation solution introduces unnecessary social and economic risk.

Restricting households to one decarbonisation option compounds existing socioeconomic inequalities, exposes some households to very high costs, impedes economy wide decarbonisation, and reduces energy system stability –all of which can be avoided if household customers are allowed to choose renewable gas as well as electrification.

Allowing households to choose electrification and renewable gas accelerates the transition.

Australia can secure a more stable, lower cost and more rapidly transitioning energy system by supporting both renewable energy pathways for households and all energy customers.

Renewable electricity can deliver cheaper decarbonisation used elsewhere in the economy

Using Australia’s next 177 terawatt hours (TWh) of renewable electricity supply to decarbonise coal fired generation and light vehicles delivers lower cost decarbonisation – decarbonisation which could occur at the same time as renewable gas starts to decarbonise the gas supply chain.

Unfortunately, the first point above is contentious. There is a prevailing narrative that the low cost of renewable electricity generated by solar and wind means energy will be much cheaper in the future. Low-cost variable renewable electricity (VRE) has to be supplied via high-cost electricity infrastructure, firmed by high-cost electricity storage, and used in high-cost electricity appliances. Higher cost (today) renewable gases are transported via low-cost pipeline infrastructure, stored in low-cost gas storage, and used in low-cost gas appliances.

Considering the full cost of each energy system, it is apparent that firm renewable electricity and firm renewable gas can be cost competitive for household use. This is true today, despite the differing levels of technological maturity between renewable electricity and renewable gas. It is highly likely that, as renewable gas technologies mature, the renewable gas system of the future will be lower cost that the renewable electricity system.

Sitting between upstream natural and renewable gas producers and downstream energy consumers, APGA and its members take into consideration the full energy supply chain as part of determining its policy positions. APGA works constructively with all gas supply chain participants and governments to advocate for and implement expeditious and economical emission reduction in Australian households and industry.

Considering the interconnected nature of the integrated energy system, decisions regarding the electrification of Australian homes cannot be made in a vacuum. An isolated approach to considering residential electrification comes with significant risk of unintended consequences being felt by household and beyond the scope of the Terms of Reference – including emission increases in households and industry, amplified risk of energy insecurity, and significantly higher costs.

APGA’s submission does not put forward a case to diminish residential electrification. On the contrary, the electrification of personal transport has been found to be one of the most economically efficient avenues to rapidly decarbonise the broader economy, with 90 per cent of residential energy cost savings coming from EVs rather than electrification of gas demand. It is also apparent that residential electric appliances are one of multiple valid pathways toward decarbonising the built environment.

Electrifying households draws upon Australia’s pipeline of renewable electricity production projects – a pipeline which already face infrastructure and storage constraints. There is a merit order for the uses of energy to which the next wave of renewable electricity should be applied to achieve the greatest emission reduction as early as possible. Recent analysis shows that the next 177 TWh of renewable electricity generation is best targeted towards reduction in coal fired generation and light vehicle fuel use (Figure E1).

APGA highlights to the Inquiry that all forecasts setting out cost savings of electrification rely on future energy costs being much lower than today, often lower than historical levels. While renewable electricity is generated from wind and solar at low-cost, an energy system based on wind and solar is very unlikely to be a low-cost energy system. The renewable electricity system of the future requires unprecedented investment in transmission and storage infrastructure. Australia is only at the very beginning of the investment cycle to deliver this infrastructure and it is apparent that the costs are most likely to be much higher than forecast.

APGA encourages the Committee to consider the evidence to chart a dual pathway to net zero energy in the home, using both electrification and renewable gases, to ensure consumer choice, competition, and energy security for all Australians.

Figure E1: Grid-connected renewable electricity vs decarbonisation of current energy pathways

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

Recommendations

This submission identifies the opportunity to decarbonise households through dual electrification and renewable gas pathways. The social and economic risks of 100 per cent electrification are also considered alongside the added benefits to the Australian economy of dual renewable electricity and renewable gas pathways.

The following recommendations are cross cutting, supporting the benefits and mitigating the risks of all topics discussed within this consultation. They each address no one aspect – rather, each supports better social, economic and emissions outcomes for households and the Australian economy in general.

Household electrification

Do not take away customer choice by endorsing electrification as the sole solution to household gas use decarbonisation. Doing so would act in opposition of the best interests of customers, forcing some customers to pay for higher cost options, and in opposition to Australia’s national decarbonisation ambition.

Support a GreenPower Accreditation for retail gas bills. Based on the GreenPower Accreditation program for retail electricity, such a program can build upon existing gas plus carbon offset programs with a requirement for retailers to transition to purchasing 100 per cent renewable gas to cover all GreenPower gas demand over the coming decade.

Nation-wide decarbonisation of households and all gas users

Consider direct policy levers that enable renewable gas to contribute to sector-wide decarbonisation. There are several policy leaves that governments can apply to unlock the decarbonisation opportunity of renewable gas within the gas supply chain. These include:

• Establish a Renewable Gas Target. This target can be modelled on successful renewable electricity initiatives like the Renewable Energy Target (RET). A Renewable Gas Target will stimulate development of renewable gas supply which gas retailers could provide to their household and commercial gas customers instead of natural gas.
• Establish a national Renewable Gas Certification Scheme. Nation-wide renewable gas certification based on the GreenPower Prototype Renewable Gas Certification Pilot will encourage market-driven solutions, allowing consumers, suppliers, and industries to make decisions based on clear economic signals while achieving decarbonisation goals. The current prohibition for Renewable Gas Certification Pilot certificates to be used for household decarbonisation would need to be lifted for a successful national scheme.
• Establish a renewable gas Market-Based Method in NGER. Given the potential of renewable gases to serve as cost-effective decarbonisation options, lawmakers should prioritise the creation of a robust market-based method under National Greenhouse and Energy Reporting (NGER) similar to that provided for renewable electricity. This would reinforce the market-based decisions-making from the national Renewable Gas Certification Scheme through federal emission accounting recognition.
• Adapt existing policies promoting the adoption of efficient electric appliances to also encourage the use of efficient hydrogen-ready appliances. An increase in gas appliance fleet efficiency reduces emissions immediately, while increasing appliance hydrogen readiness reduces the challenge of transitioning to 100 per cent hydrogen in the future. This would signal to the Australian gas appliance manufacturing industry that investment in new high efficiency hydrogen ready appliance development is valued.

Prioritise enhancing public awareness regarding the role of gas, including renewable gas, in Australia's energy transition. This will ensure that the broader population is genuinely informed on their decarbonisation options, helping the Australian public to engage in the transition towards cleaner energy sources.

Prioritise high-impact emission abatement areas: While residential decarbonisation is important, policymakers should also focus on sectors that offer the most significant opportunities for emission reduction, such as transportation, industrial processes, and agriculture. Directing resources to these areas might yield greater emission reduction per dollar spent, thus ensuring a more efficient use of public funds and a lower-cost pathway to net zero.

About

APGA represents the owners, operators, designers, constructors and service providers of Australia’s pipeline infrastructure, connecting natural and renewable gas production to demand centres in cities and other locations across Australia. Offering a wide range of services to gas users, retailers and producers, APGA members ensure the safe and reliable delivery of 28 per cent of the end-use energy consumed in Australia and are at the forefront of Australia’s renewable gas industry, helping achieve net-zero as quickly and affordably as possible.

APGA and its members strongly support the Federal Government’s net zero by 2050 target and its commitment to reducing emissions by 43 per cent from 2005 levels by 2030.[1] As set out in Gas Vision 2050,[2] APGA sees renewable gases such as hydrogen and biomethane playing a critical role in decarbonising gas use for both wholesale and retail customers. APGA is the largest industry contributor to the Future Fuels CRC,[3] which has over 80 research projects dedicated to leveraging the value of Australia’s gas infrastructure to deliver decarbonised energy to homes, businesses, and industry throughout Australia.

To discuss any of the details within this submission further, please contact APGA’s National Policy Manager, Jordan McCollum, on +61 422 057 856 or jmccollum@apga.org.au.

1        Introduction

Renewable gases such as biomethane and hydrogen can be used by all gas customers. Practically speaking, biomethane can be used by all gas customers today with zero change save the source of gas. Some modifications are needed to use 100 per cent hydrogen. Importantly the scale of these modifications is anticipated to be fewer than those required to electrify Australia. Recent research increasingly demonstrates fewer modifications to households and network infrastructure are required to transition to hydrogen than previously understood.[4]^,[5]

There is no practical barrier to either biomethane or hydrogen. In fact, blended biomethane and hydrogen are being supplied to homes today, decarbonising their gas use while this inquiry unfolds (Appendix 1). This submission will expand upon analysis which shows that renewable gas is a cost competitive option to decarbonise gas use in the home, as well as for commercial and industrial customers.

While Australia is a global leader in renewable electricity, it is a laggard in renewable gas. The European Union has hydrogen and biomethane targets that amount to over 20 per cent of total gas use by 2030.[6]^,[7] Denmark has expanded gas supply from biomethane from 10 per cent in January 2020 to 39 per cent in August 2023, and is expected to achieve 70 per cent decarbonisation of gas consumption by 2030 (Appendix 2).

Australia’s underperformance in renewable gas industry development is not due to a lack of resource. Australia has access to 2,600 petajoules per annum (PJpa) of biomass feedstock from waste streams, around 500 PJpa of which is well suited to biomethane production.[8] Australia’s world class renewable electricity resource can be applied to green hydrogen production which can be delivered, stored, and used in infrastructure and appliances which cost less than their electricity alternatives.[9] This production potential is compared to around 1,000 PJpa worth of domestic gas consumption in Australia today – a demand level similar to electricity use.[10]

Instead, Australian households and other gas customers are being let down by the lack of supportive policy for renewable gas. Retailers and wholesale electricity customers can purchase Large Generation Certificates (LGCs) and have these considered in emissions reporting under NGER. Retailers and gas customers do not have this option for renewable gas. A pilot Green Gas Certificate Scheme only commenced in August 2023, and this is still not recognised under NGER.

This lack of supportive policy has coincided with a disparity of fact-based research about forms of renewable energy beyond renewable electricity. Without the facts, the lack of policy support has been understandable.

This submission discusses some of the publicly available data in support of decarbonising household and other gas use through renewable gas. APGA makes its recommendations based on this data and seeks policy support for a quicker, cheaper and more secure energy transition for Australian energy consumers, household or otherwise.

2        Electrification is not the sole decarbonisation option

Electrification is considered by many to be the only option to decarbonise household gas demand. This is not the case. This section highlights that renewable gases are a cost competitive option for decarbonising gas use in the home. This becomes important from a decarbonisation perspective when electrification in fact increases emissions in the short to medium term, while renewable gas uptake reduces emissions as soon as households are provided the option to use them through supportive government policy.

This section addresses the following Terms of Reference:

(c) the total upfront cost and longer-term benefits of household electrification and alternative models for funding and implementation;

(d) the marginal cost of abatement for household electrification compared to alternative sectors and options to decarbonise the economy;

(h) solutions to the economic barriers to electrification for low-income households;

2.1    Cost competitive household gas decarbonisation options

While the inquiry is framed around electrification, the Terms of Reference indicates that the intent of the inquiry is to understand options for delivering household gas decarbonisation at least cost.

Renewable gases and electrification are both cost-competitive options to decarbonise gas use in the home.

New research published by Boston Consulting Group (BCG) in June 2023 demonstrates the cost competitiveness of renewable gas use in the home.[11] Renewable gases – green hydrogen and biomethane – by definition produce zero Scope 1 carbon dioxide emissions, and better than 99 per cent less carbon dioxide equivalent emissions than natural gas.[12] Renewable gases being cost competitive for gas use decarbonisation in the home means that household customers have greater choice, greater opportunity, and greater capacity to decarbonise their household gas demand.

Figure 1 considers combined energy and appliance costs for household gas users which decarbonise through electrification, hydrogen or biomethane pathways. Each energy option includes a possible range of cost outcomes for different households considering the range of different potential appliance costs, and the range of different potential energy costs.

Figure 1: Cost comparison for electricity, green hydrogen and biomethane for residential users in 2040, at different points of appliance replacement

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

One observation from the analysis is that the low end of the all-electric cost ranges for Existing house: EOL appliance and New builds are lower than the low value on the hydrogen and biomethane cost ranges. It can be concluded from this observation that it is possible for some homes to achieve lower cost outcomes with the all-electric option. While this is a possible outcome for some households, it provides an incomplete picture of outcomes for all households.

A broader interpretation of this data considers the overlap of the cost ranges for the three household decarbonisation options (Figure 2). While it may be possible for some household energy customers to achieve the lowest all-electric appliance buildout and access the lowest cost electricity, the range indicates that this is not the rule for all households.

Figure 2: Overlap of the cost ranges for new build dwellings

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

In reality, households which electrify will experience costs along the range, and some households will experience costs at the top of the electrification cost range. At the same time, households will experience costs across the ranges for hydrogen and biomethane – costs which will be equal to or lower than the electrification cost for many households.

Overlapping combined cost ranges for all-electric, hydrogen and biomethane options indicates that there is a range of household gas customers for which renewable gas and renewable electricity both pose cost competitive gas use decarbonisation options. Further, this indicates that there is a range of household gas customers for which renewable gas is a cheaper option than renewable electricity to decarbonise gas use in their home (Figure 3).

Figure 3: Cost comparison for electricity, green hydrogen and biomethane for residential users in 2040, at different points of appliance replacement with cost competitiveness ranges

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition with APGA cost competitive range analysis

Beyond creating more choice and opportunity for household decarbonisation, renewable gas being cost competitive with renewable electricity for gas use decarbonisation in the home helps address many of the challenges of 100 per cent household electrification:

• Low-income households can avoid spending tens of thousands of dollars which they cannot afford to purchase electric appliances and electricity connection upgrades.
• Renters can choose to contract renewable gas when their landlords do not pay tens of thousands of dollars to replace their gas appliances with electric appliances, avoiding increased rents due to higher appliance costs in the process.
• Apartment complexes can contract renewable gas instead of facing the cost of replacement of central systems and potentially the cost of repurposing valuable real estate within buildings to allow for electric alternatives in extreme cases.
• Where government funding can only subsidise a small portion of more costly electric appliances, expanding funding to high efficiency, hydrogen-ready gas appliances can achieve greater decarbonisation impact for every government dollar.

This is just the beginning of the benefits of enabling dual household gas use decarbonisation pathways in Australia. Household energy customers deserve access to all cost competitive energy decarbonisation options, be they electrification or otherwise – renewable gas firmly fits this description while reducing the overall burden of household decarbonisation.

It is worth noting that this analysis has been performed excluding consideration of government appliance subsidies. This is because appliance subsidies are a choice which could be applied to appliances which use either electricity or renewable gas. While this is explored further in Section 3.1 below, undertaking analysis which excludes appliance subsidies produces genuine balanced outcomes to which the application of subsidies can be more accurately considered. With high-efficiency hydrogen ready appliances costing less than high-efficiency electric appliances, applying subsidies equally across both can enable more household decarbonisation for every government dollar spent subsidising the hydrogen ready option.

2.1.1   How renewable gas can compete with renewable electricity

Decades of research and reporting on low VRE generation costs will leave some wondering how the above analysis could possibly be true. These outcomes can be better understood when considering what needs to go into supplying and using firm renewable energy.

Wholesale production of renewable gas is generally equal or higher cost compared to VRE generation. Once produced, gas and hydrogen pipelines cost less than powerlines when transporting the same quantity of energy over the same distance.[13] These same pipelines can typically be designed to store energy for under $20 per megawatt hour, and in many cases under $10 per megawatt hour – a cost beaten by underground gas storage capable of seasonal storage. Gas and hydrogen appliances also cost much less than electric appliances.[14]

This firm renewable gas supply chain compares favourably to the supply chain required to supply firm renewable electricity based upon VRE generation. Higher cost powerlines and higher cost electricity storage are required to deliver lower cost VRE generation for use in higher cost electric appliances, but at lower quantities where heat pumps can be used.

It is through these supply chain and appliance differences that it is possible for firm renewable gas and firm renewable electricity to be cost competitive for use in the home. In addition, all gas and hydrogen pipelines are designed as underground infrastructure under Australian safety standards, minimising impacts on rural landholders and delivering higher reliability outcomes as they are less exposed to extreme weather and bushfire events.

2.1.2   Why renewable gas isn’t used in the home today

Firstly, renewable gas is used in homes in Australia today. As detailed in Appendix 1, thousands of households around Australia have had their gas combustion emissions reduced through renewable gas demonstration projects delivered by the gas sector. But the larger question remains – why is renewable gas use in the home not more prevalent considering the cost competitiveness of the option?

There is an imbalance in legislation enabling decarbonisation through forms of renewable energy other than electrification. This impedes all gas users, including household users, from using renewable gas to decarbonise their gas use.

In the electricity sector, energy retailers and wholesale electricity customers have the option to purchase LGCs or GreenPower electricity certificates and have these certificates considered in emissions reporting under NGER. This option allows provides a direct economic incentive for paying for renewable electricity supply deliverer to customers via existing electricity infrastructure.

Retailers and gas customers do not have the same option to access renewable gas. There is currently no legislative framework to allow renewable gas use to be recognised if it is delivered via existing gas infrastructure – the least cost option for delivering renewable gas. A pilot Green Gas Certificate Scheme only commenced in August 2023, but this is not widely available or recognised under NGER despite certificates also being produced by GreenPower – the same entity recognised for renewable electricity accounting.

It is in no way insignificant that the RET only supported the uptake of renewable electricity supply. This policy measure supported the renewable electricity industry to grow leaps and bounds, driving market share up the diffusion of innovation curve far enough to secure a mature renewable electricity market (Appendix 3). Had the same support been provided to renewable gas at the time, we may already have dual renewable energy pathways available in Australia. It is worth noting that the RET did incentivise biogas production for use in generators to generate renewable electricity, leading to over 100 facilities around Australia using biogas for onsite electricity generation today.

There is no reason for retailers to sell renewable gas to household customers when legislation ignores emissions reduction from using renewable gas delivered via existing infrastructure. This is why households are not being offered retail renewable gas today. Legislation must be changed to enable recognition of decarbonisation through renewable gas use in the home and by all other gas users which contract delivery of renewable gases via existing infrastructure.

2.2    Emission impacts of electrification and renewable gas

2.2.1   Reducing emissions from electrification

Premature electrification of households, especially in regions reliant on coal for electricity, can inadvertently contribute to an increase in greenhouse gas emissions in the short-to-medium term. Contrary to popular rhetoric, and in opposition to the Federal Government’s aims to rapidly decarbonise Australia’s economy, it is broadly accepted that household electrification will increase greenhouse gas emissions over the short-to-medium term[15]^,[16]. This is due to the aggregated emissions intensity of generators supplying the National Electricity Market (NEM).[17]

This was quantified in a 2021 study by the University of Melbourne for the Future Fuels CRC, which modelled the effect of residential electrification on Victoria’s emission reduction plans and found emissions increased by up to 15 per cent.[18] This remains true even when considering the efficiency advantage of heat pumps and induction cooktops, and is in large part due to the state’s reliance on brown-coal generation.

The analysis found that natural gas in residential settings will remain the lower emitting option until 2035, acknowledging that the transition has accelerated since the publication of the initial research in 2021. However, Victoria’s reliance on brown coal, with an emissions intensity twice as potent as natural gas, will continue for the medium term due to challenges in connecting new renewable generation to the NEM – a fact reinforced by the Victorian Government reaching agreements to financially support the operation of Loy Yang A and Yallourn brown coal generators until 2035 and 2028 respectively.

While transitioning to renewable energy sources is essential for a sustainable future, rushing to electrify households using a majority coal-fired grid fails to achieve the desired outcome. Instead, a careful and measured approach that incorporates natural and renewable gases and acknowledges their lower emissions is necessary.

Electrification of gas use in the home will reduce emissions in all cases – one day. But it is not the rule today. The University of Melbourne's findings underscore the importance of this nuanced in the energy transition.

2.2.2   Reducing emissions through renewable gas

Today, the 166 PJ per annum of residential gas use accounts for around 17 per cent of total domestic direct gas consumption and less than two per cent of Australia’s total emissions. Despite this, residential gas use has been a specific target for recent government decarbonisation strategies, especially in Victoria and the ACT. These have been undertaken without considering the decarbonisation potential of gas use itself, and that gas networks have decarbonisation pathways.

Most studies setting out the long-term emission benefits of residential electrification do not assume any direct decarbonisation of gas. However, gas networks can, should and are evolving in alignment with decarbonisation efforts, most notably by enabling renewable gas uptake by their customers. This focus on renewable gases is because they are considered to produce zero carbon dioxide emissions when combusted, and better than 99 per cent less carbon dioxide equivalent emissions compared to natural gas.[19]

Beyond Scope 1 emissions of combustion, green hydrogen and biomethane also have equivalent lifecycle emissions to common forms of renewable electricity (Figure 4). The analysis by BCG found lifecycle emissions of renewable gases range between 12 to 110 kgCO2e per kilowatt hour compared to renewable electricity ranging from 6 to 147 kgCO2e per kilowatt hour. This is why using renewable gas working alongside electrification has been found to be able to reduce emissions from domestic gas by 16 to 50 per cent by 2030,[20] taking advantage of the existing gas network transmission and distribution infrastructure to do so.

Figure 4 : Consuming low-carbon gases results in similar lifecycle emissions as renewable electricity

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

2.2.3   Renewable gas cost of abatement

The most immediately available renewable gas which could decarbonise homes today is biomethane. Biomethane requires no change in infrastructure or appliances, nor does low level hydrogen blending. Abatement cost for renewable gases which can be used in existing appliances is simply a factor of how much more renewable gas costs compared to natural gas.

Using one gigajoule of renewable gas in place of one gigajoule of natural gas reduces emissions by 51.4 kilograms of carbon dioxide. This means that every dollar per gigajoule of biomethane premium equates to $19.46 per tonne CO2 equivalent carbon abatement cost. From this relationship, the carbon abatement cost relationship seen in Figure 5 can be produced.

Figure 5 is a useful tool for comparing household electrification costs of abatement to their renewable gas alternatives. Theoretical production capacity of renewable gases which can be considered in this way accounts for enough supply to decarbonise half of all direct gas use in Australia, residential or otherwise.

Figure 5: Carbon abatement cost as a function of renewable gas premium

Source: APGA analysis of NGER Measurement Determination data

3        Unnecessary social and economic risks of an electrification-only pathway for households

100 per cent electrification of households is hard. The upfront cost to customers; the risks to low-income Australians; the practical challenge of non-like-for-like appliance replacement; the space issue in high density living; the customer choice challenge – these are all broadly recognised. What isn’t always recognised alongside these is the risk of higher network costs forcing commercial and industrial gas customers off gas and the increasing decarbonisation burden this and households add to the challenge of achieving secure 82 per cent renewable electricity in Australia.

None of these risks have to be accepted if renewable gas is an option to decarbonise gas use in the home.

APGA may not be best placed to fully articulate each of these risks. However, we do understand a solution which can mitigate each of these risks. Let this inquiry be a catalyst for bringing together experts who understand the risks with experts who can provide solutions – including solutions beyond 100 per cent electrification off household energy.

This section addresses the following Terms of Reference:

(b) the macro-barriers to increasing the uptake of home electrification;

(f) the impacts and opportunities of household electrification for domestic energy security, household energy independence and for balance of international trade;

(g) the impacts of household electrification on reducing household energy spending and energy inflation as a component of the consumer price index;

(h) solutions to the economic barriers to electrification for low-income households;

(i) the effectiveness of existing Australian Federal, state and local government initiatives to promote and provide market incentives for household electrification;

3.1    Social risks of 100 per cent household electrification

Many of the social risks of mandating 100 per cent household electrification are well documented.[21]. Efficient electric appliances are costly, as is installing them in existing homes, especially when considering high-density homes. This costliness is most challenging for low-income households, including renters which either don’t have the choice to change or have to bear appliance costs through increased home rental costs.

These costs risk amplifying existing social inequalities. They risk low-income households having to choose between heating and eating and reduce rental markets for low-income families by increasing rental costs, in turn increasing risk of homelessness. As such, the upfront cost of electrification risks deepening social inequality at a time where cost of living is driving ever further social inequality. This is especially the case where households could have achieved lower upfront and overall energy costs through renewable gas uptake.

This risk is only made worse by the last user challenge of energy network abandonment. As more users leave gas networks, those who remain will likely incur the greater cost of less people paying for the same infrastructure. Through 100 per cent electrification policies, households which cannot afford or are physically incapable of electrifying are most likely to carry the ‘last user’ cost network burden. To date, no Australian state or federal government has planned to mitigate the consequences of this looming additional cost front for households.

Others are much better placed to further elaborate on the significant social costs and implications of 100 per cent household electrification. Instead, this submission will focus on how to mitigate these risks. While some reach for appliance subsidies to solve this challenge, there is another option – renewable gas.

3.1.1   Renewable gas mitigates the social risk of 100 per cent electrification

Almost all social risks of 100 per cent electrification are mitigated by allowing gas customers the option to choose between electrification and renewable gas decarbonisation options. This is due to the simplicity of using renewable gases in gas and hydrogen appliances:

• A significant proportion of anticipated renewable gas supply can be used in existing gas appliances; and
• Conversion to new hydrogen appliances where necessary entails lower upfront cost and complexity than installing equivalent electric appliances.[22]

This means that renewable gases can be used at no or lower upfront appliance cost compared to electrification, and with lower complexity where conversion is required.

This immediately removes or significantly reduces the following social risks:

• The upfront economic hurdle for low-income homeowners.
• The increased rental cost risk for low-income renters.
• The access to appliance conversion risk for all Australians who rent.
• The upfront cost, space, and complexity risk for Australian high-density households
• The risk of last network user costs for all Australians.

3.1.1.1                   Appliance subsidies

Where the combined appliance and energy cost of renewable gas use is equal to or less than that of electrification, the ability to pay less upfront reduces the economic hurdle of decarbonisation. But it does not always completely remove it. Appliance subsidies could be used to completely remove economic costs or renewable gas readiness for less than the cost of electrification subsidies – or to put this another way, more decarbonisation can be enabled for every government dollar put towards subsidising high efficiency hydrogen ready appliances.

3.1.2   The elephant in the room – customer choice

The household decarbonisation debate focuses on economically efficient choices to reduce emissions. However, people are not perfectly rational. People have imperfect preferences for a range of reasons, so much so that an entire field of research, behaviour economics, has arisen in an attempt to understand how rationally irrational people can be.

One risk which society introduces to the transition is customer choice. All research shows that a significant proportion of Australians, in particular Australian from diverse cultural backgrounds, prefer to use gas.[23] This is a challenging and unfortunate truth if 100 per cent electrification is the only solution to household decarbonisation. The risk that customer choice poses to decarbonisation disappears if customers can choose renewable gas.

3.2    Risk of costlier commercial and industrial decarbonisation

Any decision to restrict Australian households from gas connections will also have broader implications for businesses and commercial users who depend heavily on the gas network. This dependency covers both the immediate supply of gas, and the broader principle of economies of scale.

When a system or service, like the gas network, loses a significant portion of its user base (in this case, all households), the costs and efficiency of maintaining that system can increase for the remaining users until it become untenable.

Australian governments appear to largely expect that gas networks will continue to operate as they do today, supplying commercial and industrial users for equivalent cost. But unless urgent steps are taken to ensure the long-term viability of these networks, commercial decisions may precipitate the early decommissioning of gas infrastructure assets.

Gas networks can likely support the loss of some household customers without substantial impact. Gas bill breakdown data published by the Australian Energy Regulator indicates that network costs account for around 40 per cent of residential gas bills nationally (

Figure 6).[24] This percentage increases – for households and other network customers – as the residential share decreases.

Figure 6. Composition of residential gas bills

Source: AER, 2022, Chapter 6: Retail energy markets, State of the Energy Market 2022

This will have far-reaching effects across the broader Australian economy. The domestic enabled economic activity of gas as an energy source was approximately $470 billion in 2019-20, with the gas supply chain directly underpinning more than 46,800 businesses and 165,500 full-time equivalent jobs.[25]

For businesses that are geographically spread across metropolitan areas, and where electric alternatives are not viable or cost-effective, a reliable gas supply can be a necessity. If the gas networks were to be decommissioned due to reduced viability, these businesses could be compelled to consider relocating their operations to regions where they can secure more reliable and cost-effective energy solutions – or, alternatively, to cease trading. These economic impacts, coupled with the potential for carbon leakage, have already begun to be felt, with some major employers investigate offshoring energy-intensive operations.

The discussion around residential electrification is often set within the larger narrative of decarbonising energy infrastructure. Rather than focusing solely on electrifying energy use, global governments and organisations are becoming cognisant there can be no least-cost pathway toward the decarbonisation of households and businesses without embracing renewable gases.[26] These carbon-neutral gases provide a viable and sustainable way to utilise the existing gas infrastructure while meeting environmental objectives.

While the idea of restricting gas connections to Australian households may seem like a step towards decarbonisation, it's essential to consider the broader implications on commercial sectors and the economy. A more nuanced approach would be to transition to renewable gases, leveraging existing infrastructure and ensuring a sustainable and reliable energy supply for both households and businesses.

Retaining household gas demand for renewable gases would have the additional benefits of preserving the economies of scale, maintaining the viability of the gas network for commercial entities. Additionally, businesses linked directly to the gas industry, from installation to maintenance, would be poised to benefit from a transition to these greener gases, ensuring job security and spurring further innovation in the sector.

As discussed in Section 4.2, a transition to renewable gases can help maintain energy security for Australian businesses. The energy mix, robust due to its diversity today, can maintain this robustness while reducing carbon intensity with the inclusion of biomethane and green hydrogen. Instead of becoming dependent on electricity or energy imports, Australia could continue to have a balanced, secure energy portfolio based on its own energy supply chains.

3.3    Risk of a less stable renewable energy system

Australia’s electricity system faces a monumental challenge to decarbonise. Ambitious federal targets of 82 per cent renewable electricity by 2030 face headwinds of transmission buildout delays, massive and already prolonged electricity storage buildout, and steadily decreasing electricity system security beyond limits set by AEMO. With high emitting coal fired generation as the backstop, failure is not an option.

And this is all before we add 100 per cent of household gas demand to Australia’s electricity system. All of the work required to achieve 82 per cent renewable electricity in the existing electricity system is amplified by adding household gas use to the challenge. Further, success in achieving 82 per cent renewable electricity is put at genuine risk if 100 per cent household electrification starts to force other gas customers onto the electricity system as well (see Section 3.2 above). Add electric vehicles (EVs) and the challenge amplifies again.

Luckily there is another option. Allowing households to decarbonise through renewable gas uptake reduces the immediate burden of household electrification on the electricity system. This further reduces the risk of other gas customers being force onto the electricity system through higher gas infrastructure costs. And a strong domestic hydrogen sector can even reduce EV demand on the grid by supporting hydrogen electric vehicles.

Unnecessarily pursuing 100 per cent household electrification risks further undermining grid stability unnecessarily. This in turn risks undermining the energy transition. All can be avoided by providing customers with the choice to use renewable gas in the home.

3.3.1   The electricity grid stability challenge

The National Electricity Market (NEM) faces the most significant transformation since its inception nearly 25 years ago. As highlighted in the Australian Energy Market Operator’s 2023 Electricity Statement of Opportunities[27] (ESOO), up to 62 per cent of the coal fleet is anticipated to be shuttered before 2033. This signals the need for imminent and substantial investment in the energy sector to ensure system’s reliability, and the necessity of considering the implications of pushing for widespread residential electrification without adequate preparation.

The reliability standard measures the percentage of total energy consumption not served due to a shortage of capacity or energy. Exceeding this standard indicates the potential for power outages, in both households and industry, underscoring the urgency of addressing the predicted reliability gaps.

The ESOO assessment regarding the reliability of energy supply in the coming decade anticipates reliability gaps as soon as the 2023-24 summer in Victoria and South Australia. These states, New South Wales and Queensland are expected to breach reliability standards throughout the following decade by a significantly higher degree than previously forecast.

There are a multitude of reasons behind these projection findings, but observable delays and cost blowouts in the delivery of new energy projects are a significant contributor. This includes delays to major projects such as the Snowy Hydro 2.0, and challenging electricity transmission projects like HumeLink and VNI West. These projects are necessary to deliver renewable electricity to the grid.

The reliability outlook also now factors in increased generator unplanned outage rates, refined weather data, and higher energy consumption forecasts driven by the electrification of households and businesses. As Australia moves towards a greater reliance on electricity the need for a stable, reliable dual-fuel energy system becomes more pressing. As AEMO outlines, electrification efforts will increase electricity demand at the times where it will be difficult to meet that demand, and if the grid is unprepared or lacks sufficient renewable sources, this could lead to electricity shortages. These scenarios not only have economic implications but also endanger public health and welfare.

Government initiatives to promote electrification – from consumer adoption of electric vehicles, to the well-intentioned but short-sighted policies to transition from residential gas heating to electric heat pumps – are also driving electricity consumption upward before renewable sources are integrated into the NEM. This has forced state governments to make arrangements to extend the lives of increasingly unreliable and higher emitting coal-fired generators at major taxpayer cost to ensure the NEM remains dependable.

As the grid shifts away from baseload and towards variable electricity, the intermittency imposed on the NEM poses greater challenges. As ESOO notes, there are higher forecast occurrences of low wind and high demand conditions in regions like Victoria during peak periods. Without adequate storage solutions, this will contribute to reliability risks.

3.3.2   The Victorian problem

As the state with the highest proportion of residential gas use, it is worth considering the Victorian context and the challenges it faces in electrification. Natural gas accounts for 23 per cent of all energy consumed in Victoria, while 34 per cent is accounted for by coal, and 6 per cent from renewables.

It is notable that the state will ban new gas network connections from 1 January 2024. At the same time, it has committed to increase its long-term reliance on coal-fired generation by signing deals to ensure Loy Yang A and Yallourn power plants keep burning coal. This is in spite of the fact that the brown coal burnt at Loy Yang A and Yallourn is more than twice as emissions intensive as natural gas.

Recent analysis by energy consultancy EnergyQuest has found that accelerating the electrification of all gas use will significantly worsen Victoria’s already concerning reliability outlook (Figure 7).[28] AEMO also acknowledges this in the 2023 ESOO, stating the projected electrification of traditional gas loads, particularly heating loads in Victoria, increases forecast consumption and maximum demands in winter.[29]

Throughout the 2023 winter, this analysis found that to replace coal-fired generation during peak periods to meet current demand, Victoria would require 233 per cent more renewable output than is currently available.

If the Victorian Government were to press further and shift all gas demand to renewable electricity, output would need to rise by a further 206 per cent to ensure electricity supply remained reliable – even if assuming a 71 per cent electric appliance efficiency benefit.

In total, EnergyQuest found replacing non-renewable generation and total gas use with renewables would require 539 per cent more output than has been observed during peak demand periods this winter. The analysis does not include the major uplift in electricity demand that will be required for charging EVs.

Figure 7: Victorian energy supply – gas winter system demand profile, 20 June 2023

Source: EnergyQuest, 2023, Victorian peak demand analysis

Maintaining residential gas connections offer an effective counterbalance in this scenario. By promoting renewable gases for heating and cooking while prioritising electricity as the most economically efficient decarbonisation avenue for residential transport, it's possible to mitigate the potential demand surges on the electricity network. Residential gas connections both act as a direct energy source and reduce immediate demand on the central grid, thereby lowering risk of network reliability events.

4        Economic benefits of dual decarbonisation pathways

Providing dual renewable electricity and renewable gas decarbonisation pathways for all energy customers allows the market to deliver least cost decarbonisation outcomes for each individual customer – household and otherwise. Australia has the opportunity to pick up the pace of its energy transition by decarbonising dual energy pathways in parallel with one another, applying different skillsets and supply chains to each sector while not wasting tens of billions of dollars’ worth of renewable energy capable gas infrastructure.

Doing so can also deliver a more secure energy system, both from international price shocks and instability within either system. There is genuinely no downside for customers in allowing households to decarbonise through dual renewable energy pathways.

This section addresses the following Terms of Reference:

(f) the impacts and opportunities of household electrification for domestic energy security, household energy independence and for balance of international trade;

(h) solutions to the economic barriers to electrification for low-income households;

(k) any other matters.

4.1    More rapid decarbonisation for Australia

4.1.1   Renewable gas can reduce emissions from natural gas while renewable electricity is deployed to reduce emissions from coal

When considering the decarbonisation opportunities of renewable gases, recent government positions have largely centred on ‘reserving’ renewable gas supplies for ‘high value’ uses, namely industrial. In some respects, this is due to the perceived high cost and low availability of both renewable gases as a product, the high cost or feasibility of electrifying industrial uses, and the perceived value of electrification.

Once like for like analysis is performed however, we see that the true cost of electrifying households is very high. The same is true for much commercial and industrial gas demand.

The capital directed towards electrifying residences could instead be channelled into sectors where the potential for emission reductions is both higher and more cost-effective. Coal fired generation, transportation and agriculture all account for a significant proportion of emissions – and as shown by a recent BCG report, cost less to reduce than electrifying homes.

Figure 8 shows that while some aspects of the economy via renewable electricity is cost effective, there are cost competitive and cheaper options for other aspects of the economy. By allocating disproportionate funds to residential electrification, governments and investors continue to neglect more impactful emission-reducing opportunities elsewhere.

Figure 8: Grid-connected renewable electricity vs decarbonisation of current energy pathways

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

This data can be built upon to consider a merit order for applying scarce renewable electricity resource to the sectors as seen in Figure 9.This figure shows that the most cost-effective decarbonisation comes from applying the next 174TWh of renewable electricity to decarbonisation of coal fired generation and light vehicle use before applying this energy to any other sector. Furthermore, the next 166TWh of renewable electricity decarbonisation could be achieved through other forms of renewable energy for equal or lesser cost.

Figure 9: Decarbonisation by renewable electricity priority stack

Source: BCG, 2023, The role of gas infrastructure in Australia’s energy transition

More than an observation, this analysis indicates that there is a quicker and lower cost way to decarbonise all sectors considered within the analysis compared to full electrification. As seen in Figure 10, the latter portion of decarbonisation could be pursued in parallel with the first 177 TWh of electrification by applying renewable gas and other renewable fuels instead of electrification. Importantly, the white and grey backgrounds indicate that this wouldn’t only be quicker but would be achievable at equal or lesser cost to full electrification. Residential and commercial heating and cooking sits right on the boundary of the cost competitive and lower cost portions of the decarbonisation priority stack.

Pursuing parallel renewable electricity and renewable gas decarbonisation can double the pace of decarbonisation while reducing cost. Pursuing 100 per cent electrification of households acts in opposition to this end.

Figure 10: APGA analysis of accelerating decarbonisation considering the renewable electricity priority stack

Source: APGA analysis of BCG, 2023, The role of gas infrastructure in Australia’s energy transition

4.2    Increased energy security overall

The value of renewable gas extends beyond cost effective decarbonisation of gas consumers. National energy security can be improved through deployment of parallel and complimentary renewable gas and renewable electricity supply chains. Improvements include but are not limited to:

• Improved vehicle fuel supply chain security of supply
• Improved electricity supply chain security of supply
• Improved gas supply chain security of supply

4.2.1   Vehicle fuel supply chain security

Australia’s greatest national energy security risk is in its liquid fuel supply chain. Predominantly supplied from overseas, Australian energy security is at the whims of international producers. A return to nationally produced vehicle fuels in particular would go a long way towards addressing Australian exposure to this energy security risk.

A robust renewable gas supply chain, and in particular, a robust hydrogen supply chain, can support domestic supply of decarbonises vehicle fuel. By pursuing this opportunity alongside residential, commercial and industrial hydrogen uptake, economies of scale can be leveraged in hydrogen production and infrastructure investments. An example of this is the opportunity to develop hydrogen pipelines along Australia’s major highways between major demand centres.

Rather than developing bespoke hydrogen supply for industry, residential and vehicle customers, lower cost hydrogen can be produced and transported via larger production facilities larger pipelines along highways. Doing so would achieve economies of scale in energy production, transport and storage while securing domestic supply for each energy customer segment. Australian energy security stands to markedly improve by decoupling vehicle fuel demand from international markets via a transition to a hydrogen vehicle fleet.

4.2.2   Electricity supply chain security

Development of a robust renewable gas supply chain can support the grid in much the same way as natural gas does today. Firm dispatchable renewable generation can be provided through renewable gas power generation, allowing the electricity sector access to low cost biomethane and hydrogen pipeline energy storage. This low cost energy storage can also be accessed through electrolysis demand response reducing grid load in times of need.

Grid load can further be reduced by simply supplying potential electricity customers with renewable gas instead, allowing for combined renewable electricity and renewable gas system optimisation. Also, grid constraints can be avoided altogether with VRE upstream of grid constraints able to be turned into hydrogen and used either directly or to generate firm dispatchable renewable electricity closer to demand centres.

By providing alternative energy storage, transport and firm generation solutions, renewable gas supply chains reduce national reliance on international lithium, copper, and other precious metal supply chains, as well as potentially constrained electric appliance supply chains. In doing so, renewable gases diversify the options for energy generation in Australia, improving national energy security.

4.2.3   Gas supply chain security

Decades of state and federal legislation impeding investment in gas production has influenced the Australian gas market towards becoming short in supply[30]. This has increased gas prices and opened the country to potentially needing to import Liquified Natural Gas (LNG). This would make Australia dependant on other gas producing nations for its energy supply, reducing energy security.

Prompt support for an Australian renewable gas market can deliver increased production into the gas supply chain. As natural gas supply further reduces, replacing supply with domestically produces renewable gases ensures that national energy security is maintained at the same time as renewable electricity is used to reduce our reliance on coal fired generation.

5        Appendices

Appendix 1: Renewable gases are already decarbonising gas use in Australia

The first renewable gas programs are already underway in Australia, with lower-carbon blends already being transported through domestic gas networks to properties in South Australia, Western Australia and New South Wales, while further projects are under development in Victoria and Queensland.

One such project is the Malabar Biomethane Injection Plant, a collaboration between Jemena and Sydney Water with funding from ARENA.[31] This pioneering venture is converting biogas from organic waste at the Malabar Water Resource Recovery Facility into biomethane for the gas network. This waste recovery facility is one of several in NSW, turning wastewater's organic waste into biogas. Jemena, owning the NSW gas network, has identified enough biomethane within range of its assets to make Sydney’s residential gas use carbon neutral.

Another innovative project, Australian Gas Infrastructure Group’s Hydrogen Park SA (HyP SA), is Australia's maiden initiative producing renewable hydrogen gas.[32] With the South Australian Government's backing, providing a $4.9 million grant towards the total $14.5 million cost,[33] the HyP SA project aligns with the state's ambitions of capitalising on its abundant renewable resources to be a global leader in renewable hydrogen and achieve net-zero emissions by 2050.

Since beginning production in May 2021 and expanding in 2023, HyP SA has provided a 5 per cent renewable gas blend to over 4000 customers in southern Adelaide, covering residents, businesses, and educational institutions. Additionally, hydrogen is supplied to industries via tube trailers, and now provides green fuel for Adelaide’s first two hydrogen buses. Expansion plans are underway, targeting a 10 per cent hydrogen blend in regions like Gladstone,[34] and Albury and Wodonga.[35]

Appendix 2: Renewable gases in other jurisdictions

Internationally, Europe already harnesses biomethane extensively, both for industrial/commercial and residential use as it directly injected into the natural gas grid. The European Green Deal’s REPowerEU program aims to cease European reliance on natural gas from Russia by 2030, with steep targets designed to send a strong price signal to investors and producers.[36]

Under the REPower EU program, the European Commission has proposed to produce 35 billion cubic metres (approximately 1230 PJ) of biomethane by 2030.[37]

• In France, Engie SA is targeting 36 PJ of biomethane production per year by 2030.[38]
• Denmark has expanded gas supply from biomethane from 10 per cent in January 2020 to 39 per cent in August 2023,[39] and is expected to achieve 70 per cent decarbonisation of its gas infrastructure assets by 2030.

Figure A1. Existing biogas plants and biomethane production to the gas system.

The REPowerEU program also provides strong green hydrogen production targets, produce 10 million tonnes of renewable hydrogen and import 10 million tonnes by 2030.

In 2021, France announced a fairly ambitious target of 6.5 gigawatts (GW) of green hydrogen electrolysers by 2030. To date, the French government has invested in an overall potential capacity of around 1 GW by 2026.[40]

The UK has an even larger target, of up to 10 GW of low carbon hydrogen production by 2030, with at least 5 GW of this being green hydrogen produced using electolysers.[41] It is also currently consulting on whether to strategically support blending of up to 20 per cent hydrogen by volume into existing gas distribution networks.[42]

In 2023, Germany doubled its green hydrogen electrolyser capacity target from 5GW to 10GW by 2030.[43]

Appendix 3: Diffusion of Innovation and renewable gases

Originally appeared in The Australian Pipeliner, May 2023[44]

As advocates for the transition to renewable gases, we often talk about the ability to reach net zero gas in Australia by 2050. But what does reaching net zero gas actually mean?

Having come leaps and bounds in researching the production, transport, storage and utilisation of renewable gases like hydrogen and biomethane, we know that we have the tools necessary to achieve a net zero gas system domestically in Australia. However, the path ahead of us is still a little less clear.

Luckily, renewable gases aren’t the first new technology to embark on a gradual takeover of an existing market. Thanks to the experience of the motor vehicle, the internet, smart phones and even renewable electricity before them, the pathway of renewable gases to transition Australia’s gas supply chain to net zero gas isn’t as murky as one may think.

Like new technologies past, renewable gases are anticipated to follow what is referred to as Diffusion of Innovation Theory. The Theory observes that most new technologies will follow, at least approximately, a normal distribution s-curve when taking over an incumbent market –referred to as the Diffusion of Innovation Curve.

Figure A2. Diffusion of Innovation curve and Diffusion of Innovation curve examples

Approximations of the Diffusion of Innovation Curve have been seen across most new technologies which have developed across the past century. This is also true of the Australian renewable electricity industry. With 20% adoption by 2020 under the Renewable Energy Target (RET), this positions the renewable electricity industry on the curve to achieve net zero for the existing electricity market by 2050 (Fig 3).

Whether by accident or design, targeting 20% uptake played a significant role in putting renewable electricity firmly on the trajectory to full market takeover. The 20% mark is well above the combined Innovators (first 2.5% of uptake) and Early Adopters (next 13.5% of uptake). By ensuring uptake enters the Early Majority portion of the Diffusion of Innovation Curve, the RET ensured that renewable electricity uptake would continue even after the target had been met.

Renewable gas advocates can take advantage of this knowledge to plan out the renewable gas Diffusion of Innovation Curve required to achieve net zero gas by 2050. As per the electricity sector, targeting 90% renewable gas production by 2050 will be considered equivalent to achieving net zero, and 2025 can be considered as a reasonable point in time to start targeted renewable gas development.

The application of a Diffusion of Innovation Curve between 2025 and 2050 can be seen in Figure 4. By following this renewable gas uptake trajectory, rather than a straight line or some other form of trajectory, Diffusion of Innovation Theory suggests Australia should deliver net zero gas by 2050.

Figure A3. Diffusion of Innovation curves for renewable electricity and renewable gas

Now that we know that this is the trajectory that the renewable gas industry must meet to achieve net zero gas by 2050, the question that remains is – how do we get on this trajectory? While we know that the renewable gas industry will develop in line with the Diffusion of Innovation Curve, what is not certain is the timeframe in which this will unfold.

This is why a Renewable Gas Target is so critical to gas use decarbonisation in Australia. A Renewable Gas Target of 3.5% by 2030 and 20% by 2035 can ensure that renewable gas deployment develops beyond the Innovators and Early Adopters phases of the Diffusion of Innovation Curve prior to 2035. By doing to, renewable gas deployment will be on a trajectory which aligns with net zero gas by 2050.

By observing how new technologies diffuse into existing markets and how the RET ensured that this occurred in a timely manner for renewable electricity, we have the opportunity to ensure that renewable gas deployment doesn’t just follow the Diffusion of Innovation Curve, but that a Renewable Gas Target is set that aligns with achieving net zero gas by 2050 in Australia.

6        Attachments

Attachment 1: Boston Consulting Group, 2023, The role of gas infrastructure in the energy transition

[1] APGA, Climate Statement, available at: https://www.apga.org.au/apga-climate-statement

[2] APGA, 2020, Gas Vision 2050, https://www.apga.org.au/sites/default/files/uploaded-content/website-content/gasinnovation_04.pdf

[3] Future Fuels CRC: https://www.futurefuelscrc.com/

[4] ARENA, 2023, Knowledge Bank Resources for the Australian Hydrogen Centre, accessed September 2023, https://arena.gov.au/knowledge-bank/?keywords=Australian+Hydrogen+Centre

[5] APA Group, 2023, Parmelia Gas Pipeline Hydrogen Conversion Technical Feasibility Study,
https://www.apa.com.au/globalassets/our-services/gas-transmission/west-coast-grid/parmelia-gas-pipeline/3419_apa_public-pipeline-conversion_v6.pdf

[6] European Commission, 2023, Hydrogen, accessed September 2023, https://energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en#:~:text=The%20ambition%20is%20to%20produce,in%20energy%2Dintensive%20industrial%20processes

[7] European Commission, 2023, Biomethane, accessed September 2023, https://energy.ec.europa.eu/topics/renewable-energy/bioenergy/biomethane_en#:~:text=The%20Biomethane%20Industrial%20Partnership%20(BIP,of%20its%20potential%20by%202050

[8] ENEA Consulting and Deloitte Australia, 2021, Australian Bioenergy Roadmap, https://arena.gov.au/assets/2021/11/australia-bioenergy-roadmap-report.pdf

[9] Boston Consulting Group, 2023, The role of gas infrastructure in Australia’s energy transition, https://jemena.com.au/documents/reports/the-role-of-gas-infrastrcuture-in-australia-s-ener

[10] DCCEEW, 2022, Australian Energy Update 2022, https://www.energy.gov.au/sites/default/files/Australian%20Energy%20Statistics%202022%20Energy%20Update%20Report.pdf

[11] BCG, 2023, The role of gas infrastructure in Australia’s energy transition.

[12] See the National Greenhouse and Energy Reporting (Measurement) Determination 2008, https://www.legislation.gov.au/Details/F2023C00815

[13] GPA Engineering, 2022, Pipelines vs Powerlines: A Technoeconomic Analysis in the Australian Context available at https://www.apga.org.au/sites/default/files/uploaded-content/field_f_content_file/pipelines_vs_powerlines_-_a_technoeconomic_analysis_in_the_australian_context.pdf

[14] Frontier Economics, 2022, Cost of switching from gas to electric appliances in the home: A report for the Gas Appliance Manufacturer's Association of Australia, https://gamaa.asn.au/wp-content/uploads/2022/07/Frontier-Economics-Report-GAMAA.pdf

[15] Climate Council, 2022, Switch and save: how gas is costing households, https://www.climatecouncil.org.au/wp-content/uploads/2022/10/CC_MVSA0323-CC-Report-Switch-and-Save-Gas-vs-Electricity_V6-FA-Screen-Single.pdf

[16] Wood T quoted in Baxendale R, Andrews Government gas ban to increase emissions, The Australian, https://www.theaustralian.com.au/nation/andrews-governments-gas-ban-to-increase-emissions/news-story/bd58cee775a7b5f74a070fb16a39461c

[17] Clean Energy Regulator, 2023, Emissions and Energy Reporting System release 2022-23, https://www.cleanenergyregulator.gov.au/OSR/EERS/eers-current-release

[18] Future Fuels CRC, 2021, Integrated Electricity and Gas Systems Studies: Electrification of Heating, https://www.futurefuelscrc.com/wp-content/uploads/FF-CRC-Integrated-Electricity-and-Gas-Systems-Studies-Electrification-of-Heating-for-public-release.pdf

[19] See the National Greenhouse and Energy Reporting (Measurement) Determination 2008, https://www.legislation.gov.au/Details/F2023C00815

[20] ENEA, 2022, 2030 Emission Reduction Opportunities for Gas Networks, final report prepared for Energy Networks Australia, https://www.energynetworks.com.au/miscellaneous/2030-emission-reduction-opportunities-for-gas-networks-by-enea-consulting-2022

[21] Grattan Institute, 2023, Getting off gas: Why, how, and who should pay?, https://grattan.edu.au/wp-content/uploads/2023/06/Getting-off-gas-why-how-and-who-should-pay.pdf; also see Frontier Economics, 2022, Cost of switching from gas to electric appliances in the home; ACT Government, 2023, Developing an ACT Integrated Energy Plan, https://hdp-au-prod-app-act-yoursay-files.s3.ap-southeast-2.amazonaws.com/1216/9138/6293/Integrated_Energy_Plan_Position_
Paper_ACCESS_FA2.pdf , Chandrashekeran S, de Bruyn J, Bryant D and Sullivan D, 2023, Enabling electrification: Addressing the barriers to moving off gas faced by lower-income households, Brotherhood of St Lawrence, https://library.bsl.org.au/bsljspui/bitstream/1/13361/2/
BSL_LCC_Enabling_electrification_2023v2.pdf

[22] Frontier Economics, 2022, Cost of switching from gas to electric appliances in the home.

[23] APGA, 2023, Media Release: Victorians welcome new gas supply to unlock a net-zero renewable future, https://www.apga.org.au/sites/default/files/uploaded-content/field_f_content_file/media_release_-_gas_sentiment_-_april_5.pdf

[24] Australian Energy Regulator, 2022, Chapter 6: Retail energy markets, State of the Energy Market 2022, https://www.aer.gov.au/system/files/State%20of%20the%20energy%20market%202022%20-%20Chapter%206%20-%20Retail%20energy%20markets.pdf

[25] Australian Economic Advocacy Solutions, 2022, Economic and Employment Contribution of the Australian Gas Industry Supply Chain: 2020-21, https://www.gfcq.org.au/wp-content/uploads/2022/02/APPEA_AGIT-SUPPLY-CHAIN-REPORT-FINAL_Feb-2022.pdf

[26] International Energy Agency, 2022, World Energy Outlook 2022, https://iea.blob.core.windows.net/assets/830fe099-5530-48f2-a7c1-11f35d510983/WorldEnergyOutlook2022.pdf; International Renewable Energy Agency, 2022, World Energy Transitions Outlook 2022: 1.5C pathway, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Mar/IRENA_World_Energy_Transitions_Outlook_2022.pdf?rev=6ff451981b0948c6894546661c6658a1 ; International Renewable Energy Agency, 2022, Expert insight: Renewables and Green Gas: The Only Viable Antidote to High Fossil Fuel Prices, https://www.irena.org/News/expertinsights/2022/Feb/Renewables-and-green-gas

[27] AEMO, 2023, 2023 Electricity Statement of Opportunities, https://aemo.com.au/-/media/files/electricity/nem/planning_and_forecasting/nem_esoo/2023/2023-electricity-statement-of-opportunities.pdf?la=en

[28] EnergyQuest, 2023, Victorian peak demand analysis, https://www.apga.org.au/sites/default/files/uploaded-content/website-content/energyquest_-_victorian_peak_demand_analysis_report_august_2023.pdf

[29] AEMO, 2023, 2023 Electricity Statement of Opportunities.

[30] APGA, 2023, Submission: Reliability and supply adequacy framework for the east coast gas market, https://www.apga.org.au/sites/default/files/uploaded-content/field_f_content_file/230721_apga_submission_-_dcceew_stage_2_supply_adequacy.pdf

[31] Australian Renewable Energy Agency, 2023, Malabar Biomethane Injection Project, accessed 28 September 2023, https://arena.gov.au/projects/malabar-biomethane-injection-project/ Jemena, 2023, Malabar Biomethane Injection Plant, accessed 28 September 2023, https://jemena.com.au/about/innovation/renewable-gas/key-projects/malabar-biomethane-project

[32] Australian Gas Infrastructure Group, 2023, Hydrogen Park South Australia, accessed 28 September 2023, https://www.agig.com.au/hydrogen-park-south-australia

[33] Department of Energy and Mining, 2023, Australian Gas Networks – HypSA, accessed 28 September 2023, https://www.energymining.sa.gov.au/industry/modern-energy/hydrogen-in-south-australia/hydrogen-projects-in-south-australia/australian-gas-networks-hypsa

[34] AGIG, 2023, HyP Gladstone, accessed 28 September 2023, https://www.agig.com.au/hydrogen-park-gladstone

[35] AGIG, 2023, HyP Murray Valley, accessed 28 September 2023, https://www.agig.com.au/hydrogen-park-murray-valley

[36] European Commission, 2023, REPowerEU Program, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en

[37] European Commission, 2023, Biomethane, https://energy.ec.europa.eu/topics/renewable-energy/bioenergy/biomethane_en

[38] Engie SA, 2023, Accelerating our sustainable growth, https://www.engie.com/en/group/our-vision/our-strategy

[39] Energinet, 2023, Biomethane, https://en.energinet.dk/gas/biomethane/

[40] Government of France, 2023, Industry: towards a new hydrogen strategy for France, https://www.economie.gouv.fr/industrie-nouvelle-strategie-hydrogene-pour-la-france

[41] Government of the United Kingdon, 2021, UK Hydrogen Strategy, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1175494/UK-Hydrogen-Strategy_web.pdf

[42] Government of the United Kingdom, 2023, Hydrogen blending into GB gas distribution networks, https://www.gov.uk/government/consultations/hydrogen-blending-into-gb-gas-distribution-networks

[43] Government of Germany, 2023, National Hydrogen Strategy Update, https://www.bmwk.de/Redaktion/EN/Publikationen/Energie/national-hydrogen-strategy-update.pdf?__blob=publicationFile&v=3

[44] McCollum J, 2023, Why a renewable gas target is critical to gas use decarbonisation, The Australian Pipeliner 197, https://www.pipeliner.com.au/why-a-renewable-gas-target-is-critical-to-gas-use-decarbonisation