What Role Will Gas Play In Australia By 2050?

What Role Will Gas Play In Australia By 2050?
Image: iStock

Do you still use a gas stove to cook your dinner every night? You’re not alone. Almost 70 per cent of Australian households today use gas to heat their homes, cook their food and provide reliable hot water. But as we move into a dramatically changing energy landscape with increasingly critical environmental concerns to consider, we have to ask: what role will gas play in a renewable-focused future?

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Gas In The Grid

Gas has always been an important energy source for Australia — especially where many remote, off-grid houses have to rely on bottled gas and gas generators. Gas is also an important resource for Australia. We are a gas-rich country — though we send more off for export than we consume here in Australia.

In 2014-2015, the period of the most recent Australian Energy Update by the Office of the Chief Economist, 24 per cent of the energy consumed in Australia was gas generated, and gas consumption increased by 1.3 per cent from the previous year. In fact, it’s increasing at a faster rate than any other type of fuel in Australia.

But will this upward trend continue through this period of change? While electricity prices become unstable and climate change becomes more of a pressing concern, more and more people are calling for a renewable-led energy plan to carry us into the future. Just as we looked at the possible futures of Australia’s energy grid back in 2015, this time we’re looking towards the potential future of gas.

The Problems Facing Gas

Gas is currently plagued by a raft of problems, from a perceived short supply to rising prices and environmental concerns.

Image: Energy Networks Australia

Much of the conversation surrounding gas has been driven by the problems with South Australia’s grid — a state where 45 per cent of electricity is generated by gas plants. Earlier this year, extreme heatwaves caused rolling blackouts across the state when a backup gas-fired power station was not switched on — a move which some have blamed on the rising cost of gas.

Natural gas is one of Australia’s largest energy resources, coming behind only uranium and coal. It’s also a lucrative export industry, meaning much of the gas mined here gets compressed into its liquid form, LNG, and shipped overseas — pushing local prices higher. Some plants even sell as much as two thirds of their gas to Asia on restrictive contracts.

LNG gas storage tanks in Western Australia. Image: Greg Wood/AFP/Getty Images

It’s a problem without a foreseeable solution in the immediate future. The government has all but ruled out the idea of a gas reservation policy that would require a certain amount of gas to be set aside for the local market, and all other solutions involve long-term investment such as the building of new pipelines or exploring new gas reserves.

Another factor likely to push the price of gas higher is the finite nature of this resource. When conventional gas deposits run out the industry will have to look to unconventional sources for supply — which includes coal seam gas, tight gas and shale gas. With these sources, the gas is trapped in rocks with lower permeability than ‘conventional’ gas, which then require techniques like fracking to extract. As gas gets progressively harder to extract, it will inevitably rise in price.

There are also environmental concerns behind processes like fracking. The recent focus on coal seam gas attracted many protesters who fear the process — which involves pushing liquids at high pressure into boreholes to force open existing fissures in the rock, allowing gas to escape — may cause contamination of groundwater, not to mention waste a large amount of water in the process.

But even these problems don’t spell certain doom for gas in Australia, though it does require change. In order to continue to play a part in our lives, gas will have to return to being competitive on price, reliability and sustainability. Luckily for the many Australians who are attached to their gas cooktops, heating and hot water, there are plenty of ways this can be done in both the short and long term.

Gas Going Forward

Though Australia is moving inevitably towards a decarbonised grid, many people still see gas as having a place in a renewable-led future. A report put out by the industry indicates that three main types of technology will need to be further developed and adopted to make gas an economically and environmentally sustainable option — carbon capture and storage, biogas collection and hydrogen gas production.

Image: Energy Networks Australia

You may have heard something about the current Australian government looking into so-called ‘clean coal’ technology as an alternative to a renewable-dependent grid. Clean coal is something of a misnomer, though — as the coal itself is not clean, but rather the emissions produced from burning it are stored underground in a process called ‘carbon capture and storage’.

Carbon capture and storage is already possible with existing technologies, with varying degrees of success. The chief issue with it beyond its overall efficiency in current form is its cost-effectiveness; there is no commercially available carbon capture and storage that’s feasible for energy suppliers to implement while still providing affordable electricity — unless Australia reinstates a carbon price.

If a solution was found for this one major roadblock, it’s feasible that the same carbon capture processes could be used to clean up emissions for gas plants as well, maintaining their energy contribution in even a low-emission grid. But how likely is this outcome?

Making Gas More Efficient

One of the less addressed problems with gas is the high level of obsolescence in the way we use it. Our inefficient use of gas only contributes to the current problems with supply, simultaneously holding it back from being more environmentally friendly. But because the price of gas remained low for so many years, Australians have long been unmotivated to update old systems and find more efficient ways to use gas. Many houses still retain hot water systems running pilot lights, for example, which are an unnecessary waste of energy.

The slow uptake of newer, more efficient technology has plagued industrial installations using gas as well — though in this case the delays have happened due to restrictive regulatory frameworks. In industrial settings, a process called cogeneration can be used to create heat and electricity at the same time, heating the building and feeding some excess electricity back into the grid at the same time. A similar system called trigeneration also adds cooling into the equation, for even further efficiency. These plants can be found in everything from large hospitals to schools to cinemas, and everything in between.

Part of a cogeneration plant at MIT. Image: Frank Hebbert

Cogeneration plants have the potential to be up to 80 per cent more efficient than conventional energy generation, and produce around 60 per cent fewer greenhouse gases. Property managers and owners have long been keen to adopt this technology in their own developments — but for a long time, complex regulatory processes have stood in the way. These regulatory blocks have long made it hard for businesses to connect their cogeneration plants to the grid in order to sell electricity back.

While new rules from the Australian Energy Market Commission changed some of this in 2014, there’s still a long way to go to achieve regulations that actively encourage uptake of these efficient technologies.

Gas As A Renewable

If, instead, Australia turned to a renewable-led grid, natural gas has been pinpointed as an important ‘transitional’ energy source. Less polluting than other fossil fuels, but still with the desirable ability to turn on and off when needed, gas has a number of qualities that qualify it to ‘stabilise’ a transition to renewables. While the grid may be powered by solar while the sun is shining, or wind while the wind is blowing, gas plants can stand by to pick up the slack when these natural resources fail.

This gas-powered ‘backup’ system can be implemented on a much smaller scale as well. Over in Vasse, WA, a small trial has seen a number of houses with solar panels fitted with both battery storage and a gas generator. While the houses are intended to run mainly off stored solar power, the gas generator exists as a backup for when these reserves have run dry and the grid is under strain. Even in the case of a total power outage, the house would remain self-sufficient with both solar and gas-powered electricity generated locally. This kind of dual system could also be useful for houses that want to move off the grid — or are too remote to be connected at all.

Biogas digesters. Image: Mike Steinhoff

Of course, as a non-renewable energy source, natural gas reserves are inevitably finite. In fact, Australia’s known gas reserves are only projected to last until 2050. This is where alternative, renewable sources of gas such as biogas or hydrogen factor in.


Biogas or ‘landfill gas’ is an alternative fuel composed of the gas emissions from decomposing organic matter. These gasses are largely comprised of methane, like natural gas, and can be harvested from industries like waste disposal, sewage treatment and even agriculture. Bioenergy Australia estimates there were around 242 biogas plants in Australia in 2016.

Like cogeneration, biogas is a single solution that solves multiple problems. The biogas created can be used to generate carbon-neutral electricity, but the plants can also solve the waste and odour issues that crop up in agricultural industries.

While bioenergy still has yet to be widely adopted in Australia, contributing just 10 per cent of Australia’s renewable electricity generation and only 1.4 per cent of total electricity generation in 2014, it has a lot of potential. In the UK where the technology has seen wider uptake, biogas projects saw enough gas generated to cover 155,000 homes in 2015, while projections show there is potential to produce enough biogas for over 2.7 million homes by 2035.

Biogas digesters. Image: Mike Steinhoff

Closer to home, a project in Queensland has already started injecting biogas-fuelled power into the grid, as part of a project by Ergon Energy. The Maryborough site hosts a 1MVA gas generator that runs on biogas from an old landfill site. Currently, it’s capable of providing power for around 300 households in the area, and projections have suggested that the site has enough gas to continue generation for another 20 years.

Biogas can even be created on a much smaller scale, such as in backyard projects utilising a household’s food scraps, grass clippings or other organic waste. Houses or small hobby farms with a lot of food scraps or animal manure can potentially generate enough gas to do an hour or two of stove-top cooking a day.


Hydrogen is a clean burning fuel, which emits only water vapor as a byproduct. It’s a desirable type of fuel, producing no emissions, though the main barrier to wider uptake of hydrogen is its relative scarcity. Hydrogen is not found in deposits like natural methane gas and cannot be mined — only created. The process of creating it is unfortunately energy-intensive, however, and also produces emissions of its own.

Image: Energy Networks Australia

The most common method of creating hydrogen is steam-methane reforming, a process which removes the hydrogen from methane gas. This process still releases leftover carbon dioxide as byproducts, meaning it would have to be combined with some kind of carbon capture to remain a zero-emission fuel.

The more promising method of obtaining hydrogen involves splitting it from water — H2O — with electricity in a process called electrolysis. Again this process requires electricity from other sources, but a system using excess energy from other renewable energy sources like wind or solar to create clean-burning hydrogen could be just what Australia’s gas network needs in a zero-emission future.

Such a system is planned in the renewable-focused ACT, where a 1.25MW hydrogen electrolyser — run off entirely renewable energy — is being planned. The project is intended as an alternative energy storage system, where through electrolysis excess renewable energy will be ‘converted’ into stored hydrogen gas in times of plenty, and then burned to generate electricity in times of need. The initiative will also include a refuelling station for hydrogen-fuelled cars — as fossil-fuel burning vehicles are the next emissions source that will need to be tackled once electricity is sustainably generated.

The entire energy industry in Australia, gas included, will inevitably have to change as we adapt to the challenges of climate change and a low-emission grid. It’s highly unlikely that gas will go anywhere fast, however, whether our future sees adoption of carbon capture and storage, renewable gas sources, cogenerated energy going into the grid, or a little bit of everything.