The Victorian government has requested Infrastructure Victoria to advise them on how the existing network of gas pipelines fits with our net zero emissions future and investigate challenges and opportunities of ‘maximising the use’ of gas infrastructure.
The focus should be on the best and quickest way to get to zero emissions, not protecting fossil fuel infrastructure from becoming a stranded asset. That means we should power the transition away from gas with clean energy and electrifications, rather than hoping that gas or hydrogen from brown coal will deliver results.
How to make a submission:
Infrastructure Vic developed 4 Scenarios to decarbonise the gas sector:
While we welcome that 3 of the 4 scenarios focus on renewable energy, it is worrying that most scenarios see limited action before 2030 leaving the bulk of action for after 2030. Scenario D should be immediately rejected as it would heavily rely on hydrogen made from brown coal and on the failing technology Carbon Capture and Storage.
On top of that Scenario D or brown coal to hydrogen costs are 4 times of the other scenarios and would produce much more GHG emissions despite the massive investment on CCS!
After looking at the 4 scenarios our main concerns are:
1. The regulatory framework for buildings is outdated and is still locking Victorians into gas.
2. Cut gas consumption in half by 2030. Victoria should be aiming to substitute at least 50% of existing gas consumption with a particular focus on replacing inefficient and expensive gas space heating.
This will not only reduce Victoria’s greenhouse gas emissions, but also rapidly reduce our reliance on gas, helping to increase energy security and give some time for those industries that cannot (yet) move away from gas. To reach this target tried and tested technologies should be adopted for the next decade (with a focus on electrification) rather than waiting for alternatives which are not technologically mature or commercially viable.
Analysis by Northmore Gordon has already mapped out a series of steps that will cut gas consumption by at least 50% by 2030.
3. Any transition plan should aim to alleviate energy poverty in Victoria.
We encourage the Victorian government to see the gas transition as an opportunity to tackle energy poverty in Victoria. The Victorian Government has already addressed this point in existing energy efficiency and heater replacement programs, but much more can be done. Alternatives such as biogas and green hydrogen are expensive and projected to remain expensive for decades and the impact on Victorians should be properly assessed.
4. Help Victorians prepare for a rapid shift away from gas.
There is an information gap that exists for many Victorians, and the government should take steps to fill this information gap. It should also support any upskilling of the installation workforce and a transition for gas extraction workers and appliance manufacturers.
Q1. Do you have any further information, evidence, or concerns that you wish to raise in relation to the scenario design and analysis?
Scenario design and analysis aids the evaluation of potential pathways for Victoria to move away from gas but they should still be seen as ‘in development’.
Evidence shows certain uses such as household gas consumption could be better be served by electrification, while others such as hard to abate industries might need zero emissions fuels.
One thing that is not openly addressed in the pathways is the impact of fuels on consumers. As the Scenario Analysis reports indicate, Bio-methane tends to cost 20 to 40 $/GJ. That is several times higher than current gas prices, on the other hand green hydrogen is not expected to be competitive with fossil gas until 2050. Replacing an expensive fuel with other even more expensive fuels will negatively impact vulnerable Victorians who would be better served with efficient electric appliances. This should be considered when choosing a pathway above the value of extending the life of existing gas infrastructure.
Q2. Do you have any further information or evidence that can help identify an optimum scenario for a net zero emissions gas sector in 2050?
Renew’s (then called Alternative Technology Association) report Household Fuel of Choice1 showed that efficient electric appliances were already cheaper than gas. This gap is expected to grow as biogas and green hydrogen are expected to be more expensive than fossil gas and should be accounted for when identifying an optimum scenario for a net zero emissions gas sector in 2050.
Q4. What is your view on the best ways to maintain the reliability and affordability of Victoria’s gas supply if natural gas use declines?
It is important to have a managed transition. We encourage the Victorian government to have targeted retirement of sections of gas pipelines (further incentives to replace gas appliances could be geographically bounded) to reduce system and customer costs.
Targeted or zonal electrification to reduce the gas distribution infrastructure could ameliorate the impacts of the gas transition on users, but further research would be needed to comprehend the scope, scale, speed and challenges of trying to manage gas distribution system costs though a gas phase out.
Q6. How can the use of Victoria’s existing gas infrastructure be optimised during the transition to net zero emissions, over the short (10 years), medium (20 years) and long-term (30+ years)? How can the Victorian Government assist in this?
As stated before, focusing on a managed transition could provide the best of both worlds by allowing for a fast transition while minimizing the costs on the system and users. This would also allow for optimising the use of existing gas infrastructure during the transition in zones where strategic gas consumption exist.
Nevertheless, it is crucial that the importance of optimizing the use of existing gas infrastructure is not prioritised over ensuring a fair and rapid transition.
Q7. What principles should apply or what measures will be needed to manage the impacts of gas decarbonisation on households and businesses?
Just transition. It is crucial that the transition improves the standing of vulnerable Victorians to reduce energy poverty in the state.
A key measure would be to carry on an education campaign, so Victorians learn about the impacts of gas on their budgets, health and on the environment, and the advantages of other sources of energy such as electrification.
Q8. What polices, programs and/or regulations should the Victorian Government consider or expand to encourage households, commercial buildings and small businesses to reduce their gas use?
Firstly, the Victorian government should update planning schemes and building codes as soon as possible. The regulatory framework for buildings is outdated and is locking Victorians into gas, an expensive and polluting fuel. Specifically:
Secondly, programs such as the replacement of inefficient heaters for heat pumps could be expanded to target ducted gas heating.
Finally, the Victorian government should consider launching a new version of the Environment and Resource Efficiency Plans Program which was administered by the EPA until 2013. This program was compulsory for our 200 largest users of gas, electricity and water. A key measure of this program was the mandatory implementation of efficiency measures that have a payback period of 3 years of less.