With domestic gas production set to triple, the Australian Competition and Consumer Commission (ACCC) estimates over 75 per cent of gas reserves and a significant proportion of gas production in Eastern Australia is controlled by LNG joint ventures.
The gas network sector and key stakeholders representing policymakers, consumers, appliance manufacturers and major gas users will gather on Friday, 12 June 2015 for the Energy Networks Association’s (ENA) Gas 2015 Customer, Choices and Challenges.
This seminar will feature government ministers, regulators, industry spokespeople and other key decision makers on the issues facing the future growth and prosperity of the Australian gas market, and the customers it serves.
Australia’s long-life gas networks are critical in delivering convenient and reliable energy for more than 4.3 million households and 133,000 businesses over more than 88,000 km of pipelines. Yet, they face a range of challenges in the form of wholesale gas markets, government intervention, distorting appliance subsidies and changing industrial demand profiles.
Some commentators have used limited analysis to conclude that these forces, combined with increasing competition in appliance markets, have created the potential for gas infrastructure to be rendered obsolete.
There is strong evidence to the contrary, including the role of falling network cost drivers in offsetting wholesale price increases in some jurisdictions. Simplistic projections can also ignore the benefits of a dual fuel network, including reducing the high cost of peak electrical demand and the reduction in greenhouse gas emissions that is supported by gas consumption.
While rational debates are welcome, the long-term interest of consumers are not well served by policy settings or negative commentary, which artificially drive down gas consumption and push up average prices. Consumers are at risk if subsidy schemes continue to exclude the emission benefits of gas appliances or if commentators urge customers to “get out of gas”? by overhyping the impact of wholesale prices.
There is a risk that, by talking down the future of the industry, we may undermine the benefits of domestic gas networks for customers, the economy and the environment.
For residential customers, gas appliances still offer convenient and cost effective solutions for cooking, hot-water and heating.
Gas networks are essential to the function of a strong energy system, complementing the electricity grid. Without natural gas for heating in NSW, the peak demand for electricity in winter could be up to 20 per cent higher. Similarly, gas co-gen and tri-gen plants can support solar and provide localised electrical supply, while commercial applications reduce power bills, with payback periods as short as 2.5 years and greenhouse gas abatement of 1,500 tonnes per annum.
Natural gas offers an energy source with less than one sixth of the greenhouse emissions intensity of current electricity supply. Likewise, vehicles powered by compressed natural gas (CNG) have 20 per cent less CO2 emissions, and 85 per cent less particulate emissions.
There are clear benefits for Australian energy customers, and the economy, in a strong domestic gas market. It is important to separate fact from fiction, and for policymakers to create a “˜level playing field’ in upstream development and supply and downstream markets for appliances and home energy use. This will ensure all energy sources and appliances can compete based on value and effectiveness and that the choices are left in the right hands – our customers.
ENA’s fact sheet, Natural Gas Networks – Valuable Connections is available from the ENA website.