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Natural gas essential for net zero – report

A report commissioned by the Australian Gas Industry Trust (AGIT) has confirmed that natural gas will have a significant role to play in a cleaner energy economy as Australia moved towards a net-zero future.

The report, undertaken by Frontier Economics, reinforced the value of flexible and dispatchable gas-powered generation in the electricity system as the energy mix continues to shift further towards renewables.

The report noted that for an electricity system increasingly transitioning to intermittent renewable generation, gas-powered generation (GPG) is the least cost way to add capacity to the predicted mix of generation and storage in 2025.

“This finding holds when we include a carbon price equal to either the average Australian or average European price of carbon credits in 2020/21,” the report stated.

The finding was based on our estimates of the Whole of Electricity System Cost (WESC), which accounts for the characteristics of generation and storage capacity that the system needs to maintain reliability and stability.

Unforeseen events, such as the recent closure of Hazelwood power station in Victoria, in addition to various power outage events, result in the need for greater gas-powered generation to meet the demand, and this is a trend that is set to continue in the National Electricity Market even as the electricity mix changes.

Gas-powered generation offers a flexible, on-demand response to meet necessary demand during periods of fluctuation, which makes it a perfect partner for renewable energies such as wind and solar, the report stated.

“On all the measures we consider, gas is maintaining its role as a bulk energy provider to help meet the ongoing demand for energy,” report author and Frontier Economics director Andrew Harpham said.

“Gas also offers a flexible solution when there are unanticipated events and problems with supply from renewable energy sources.’’

The Australian Petroleum Production and Exploration Association (Appea) said on Wednesday that as Australia continued to move away from coal-fired power and install more renewables to meet Paris Agreement targets, natural gas, which emits around half the emissions of coal, would provide on-tap energy to ensure the continued stability of the electricity grid.

Appea CEO Andrew McConville said gas is the perfect partner to renewable energies as it produces only half the emissions of coal when used in power generation.

“Gas is the natural choice for cleaner electricity and as we rely less on coal and more on renewable energy there is still a need for gas-fired power to ensure the stability of our electricity system,” he said. (Mining Weekly)

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