NATURAL GAS - WHY SO LITTLE RECOGNITION?

Transcription

1 NATURAL GAS - WHY SO LITTLE RECOGNITION? Steve Davies Policy Adviser Australian Pipeline Industry Association

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3 Overview Natural Gas in Australia Real energy contribution Natural gas can help in many ways Issues for the Australian Gas Market Government Policy

4 Natural Gas in Australia Source: Energy White Paper

5 Australian Energy Flows

6 Making sense of the numbers Primary energy consumption: 1382 PJ of gas is consumed; and 2230PJ of coal is consumed. Electricity generation: 390PJ of gas is consumed to produce 154PJ of electricity; and 1984PJ of coal is consumed to produce 525PJ of electricity. Direct energy use (no feedstock): 620PJ of gas is used directly for energy purposes in the economy; and 130PJ of coal is used directly. Useable energy: Gas provides 774PJ of energy to the economy; and Coal provides 655PJ.

7 Gas, GDP and employment

8 Gas three ways it can help Emissions Reductions in Electricity Sector Electricity sector produces 35.3% of Australia s emissions 194M of 551M tonnes 242TWh New Gas CCGT 357kg/MWh Current Coal fleet average around 900kg/MWh 1TWh Coal switch to Gas saves 543,000 tonnes CO2 Switch full coal load to gas Reduce emissions by around 100M tonnes 18% total national emissions

9 Gas three ways it can help Reduce electricity peaks Driven by urban air conditioner demand Urban gas peaks tend to be cold weather dependant Can be utilised in times of high electricity demand Gas-fired air conditioning Distributed generation Fuel cells Reduce reliance on imported transport fuel CNG and LNG viable transport fuels

10 My Power Bills Electricity Daily supply charge - $1.25 Usage c/kWh, equivalent to 8.7c/MJ Gas Daily supply charge - 55c Usage 2c/MJ

11 Issues for gas market East coast export industry Impacting demand, supply and price Will gas be priced out of electricity generation? Market development New market structures developed for industry No recognition of Australian circumstances Investment based on long term contracts Growth of networks Residential and commercial demand flat

12 The Australian Energy Market Agreement The overarching objective of the Australian Energy Market Agreement is the promotion of the long-term interests of energy consumers, with regard to price, quality and reliability of electricity and gas services. This objective is supported by the subordinate objectives of the National Electricity, Gas and Energy Retail Laws. The agreement also sets out a framework for further energy market reform, which includes: promoting the long-term interests of consumers strengthening the various aspects of the energy market to improve the climate for investment streamlining and improving economic regulation, including reducing the costs and complexity of existing regulation and lowering barriers to competition improving the planning and development of electricity transmission networks enhancing the participation of energy users in the markets, including through demand-side management increasing the penetration of natural gas as a way to lower energy costs, improve services and reduce greenhouse gas emissions further addressing greenhouse gas emissions from the energy sector.

13 Gas in the Energy White Paper address impediments to the development of our onshore and offshore gas resources identify ways to improve market information consider the merits of reviewing pipeline capacity trading, including potential mechanisms for utilising unused (but contracted) capacity explore a development path for establishing a gas supply hub market that expands upstream trading opportunities and allows gas and capacity to be traded separately. monitor gas market conditions, particularly the emergence of potential impediments to adequate supply, and work with the gas supply industry to identify ways to improve market liquidity.

14 Commonwealth Energy Policy $4 billion on clean coal and CCS technologies $3.9 billion on renewable energy $10 billion finance for clean energy through the Clean Energy Finance Corporation Renewable Energy Target $1 billion funding direct to coal-fired power generators as compensation for the carbon tax impact, not directed to closures

15 Conclusion Natural gas is a Plentiful Affordable Low emission source of energy. Why aren t policy makers acting to increase the penetration of natural gas as a way to lower energy costs, improve services and reduce greenhouse gas emissions

16 THANK YOU, QUESTIONS?