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What category best describes your interest in gas? You can tick more than one.
1. Do you use any international and/or domestic forecasts to inform your outlook of the gas market?
• APA uses forecasts for both domestic and international gas demand (LNG) as well as domestic gas supply data that is developed in combination with an external advisor.
• Forecasting GPG demand is particularly difficult with global climate patterns (such as El Nino/La Nina), seasonal and even daily/weekly weather events (dunkelflaute) leading to significant fluctuations in GPG and therefore gas demand.
2. What role do you see gas-fired generators playing in supporting Australia’s 82% renewable energy targets and beyond?
• See Section 1.2 of our Submission
• Gas infrastructure will play a key role in helping Australia meet its net zero targets.
• GPG will help ‘unlock’ renewables and ensure sufficient electricity supply during periods of low wind and solar generation
• While natural gas’ overall contribution to the energy mix is anticipated to decrease, gas generation will rise in peak period e.g., during winter when there is less direct sunlight and wind
3. How will the expected trends in demand from gas-fired generators impact other gas users?
• GPG demand is very difficult to forecast and increasingly driven by significant weather events and outages at coal power plants.
• Peak gas demand currently occurs in winter months. Peak events in electricity markets are expected to become more common in winter, due to low solar and wind output. This will put greater pressure on winter gas supplies.
• The impact on other gas users is difficult to predict. With sufficient gas support and fit-for-purpose infrastructure, GPG should be able to dispatch and support peaking demand.
4. What should government do to consider managing these impacts and to mitigate energy peaks caused by regional or seasonal variations?
• See Sections 1.3 and 1.4 of our Submission.
• Governments should work closely with industry partners to support and fast-track the development of new gas reserves. The Beetaloo Basin, in particular, is a natural gas resource of significant scale and can help offset the very significant gas supply shortfalls that are forecast to emerge later this decade.
• As outlined in Section 1.3, it is currently unclear whether there are sufficient market signals to bring enough GPG into the system.
• Energy Ministers should consider whether alternative arrangements are required to ensure we bring GPG into the NEM to maintain a reliable energy system
5. How feasible, and at what scale, are alternatives to natural gas for the electricity sector?
• We agree that alternatives to natural gas need to be developed (see responses to questions 8, 42 and 43).
• The Western Australia Renewable Hydrogen Target (RHT) is a good example of a scheme looking to support the development of hydrogen.
• However, in the long term, natural gas will play a critical role in supporting Australia decarbonising.
• The CSIRO GenCost Report indicates that the lowest system cost will be when renewable generation is supported by gas.
6. How much longer will you continue using gas as a fuel source or feedstock for your business? Do you think your consumption of gas will decline over time, and if yes, at what rate?
• APA’s 15,000km of gas pipelines are our largest source of emissions.
• These arise when gas in combusted in our compressor units.
• Many of these compressors are in very remote locations and therefore cannot be electrified easily.
• As outlined in our Climate Transition Plan, we have a target of net zero operational emissions by 2050.
• We expect our consumption of gas will reduce over time, mainly through compressor efficiency and compressor electrification.
7. Are there alternatives that your business can use instead of gas (for example electrification, hydrogen, biomethane or circular economy inputs)? What barriers exist to using these alternatives? How can the substitution of gas be accelerated?
• Yes, electrification of compressors is an alternative to gas powered compressor units.
• Compressors can also run on biomethane.
• The cost of electrification and biomethane are barriers to these alternatives.
8. What factor/s influence your willingness to adopt electric appliances or processes? How could governments support small businesses to decrease gas consumption?
• See Question 7. The cost of electrification is a barrier to adoption.
• Government support for a market based renewable gas scheme will help drive the development of renewable gases such as hydrogen and biomethane.
• Having biomethane as a viable and cost effective alternative to natural gas would help reduce commercial customers’ carbon emissions.
9. What role might carbon capture, utilisation and storage (CCUS) and negative emissions technologies (NETs) (for example direct air capture and carbon dioxide removal) play in decarbonising industrial processes that are hard to abate in your business or industry?
• See Section 1.11
• We expect CCUS to play a key role in achieving net zero.
• APA was a consortium member of the Mid West Blue Hydrogen Project that confirms the Mid-West region as suitable for blue hydrogen production and CCS.
15. What measures will increase the transparency of LNG supply chains, including their environmental, social and governance impacts?
• We do not consider that there needs to be additional reporting about LNG supply chains.
• Existing reporting from AEMO, the ACCC, the AER, and other Government bodies as well as information provided to the Gas Bulletin Board provide sufficient transparency.
16. Does current gas transport and storage infrastructure support the changing role of gas in the residential and commercial sector? If inadequate, what is needed and who should provide the change?
• Yes. Refer to section 1.6 of our submission.
• Gas infrastructure operators have a strong track record of delivering the necessary infrastructure to ensure customers have sufficient gas in the locations they need it.
• To date, the incremental expansion of existing infrastructure has been the most efficient, timely and lowest cost solution to ensure that gas is delivered when and where it is needed.
• This means that the incremental expansion of the East Coast grid is the most efficient solution to transport more gas from Queensland and the Northern Territory to residential and commercial customers in southern markets.
17. What role will LNG – and Australian LNG in particular – play in your country’s energy transition?
• We expect Australian LNG to support the decarbonisation of many economies across the world.
• Similar to its role in the NEM, as coal power stations retire across the world, LNG will help support the reliability of energy systems dominated by renewables.
23. What are the major barriers and opportunities for new supply? How can the Australian Government prioritise, mitigate or manage these?
• See Section 1.4 of our Submission.
• Government policies looking to restrict or reduce natural gas use are increasing uncertainty for investors in gas assets.
• Policy support in areas such as acreage releases, allocation of exploration licences, support for environmental approvals and land access, will help mitigate some of these barriers.
24. What are some of the opportunities for gas production in Australia in the medium (to 2035) and long‑term (to 2050)? How could these necessary developments support decarbonisation consistent with achieving emissions reductions goals?
• See Section 1.4 of our Submission.
• The Beetaloo Basin, is a natural gas resource of potentially significant scale and can help offset the very significant gas supply shortfalls that may commence later this decade.
• Governments should work closely with industry partners to support and fast-track the development of new gas reserves, including the Beetaloo Basin.
• Given GPG emits approximately half the carbon emissions of coal, ensuring there are adequate gas supplies will avoid the extension of coal power stations.
25. How can the Australian Government better communicate and provide more transparency to local communities regarding gas projects?
• Unless the Australian Government is a partner in a project, we do not see the Australian Government having a role in communicating and providing transparency to local communities.
• Project proponents should be responsible for communications and developing social licence in local communities.
• However, we do see a role for Government in supporting a more genuine debate about the importance of gas in supporting the energy system during the transition.
26. What opportunities exist to improve engagement and consultation processes with industry?
• We see a role for the Commonwealth Government taking a national leadership approach on the future of gas with industry and state governments.
• We see an opportunity for the Commonwealth to work with states to align on strategic objectives, the need for gas to support domestic industry, and the reality that both natural gas and renewable gases are essential for Australia’s decarbonisation and keeping Australian industries internationally competitive.
27. How can all levels of governments better support the industry to engage with First Nations people and community groups?
• Project proponents should be responsible for engagement with First Nations people and community groups.
• APA recently launched its inaugural Reconciliation Action Plan which aims to support our journey in building better relationships with First Nations peoples in order to strengthen communities through responsible energy – this is a key focus of APA’s sustainability strategy.
28. How can Australia support the potential for cost-effective, safe, and verifiable CCS projects, including for the gas sector, other industries and our region?
• Scaling CCS operations in Australia in timeframes that can contribute to net zero means there should be a portfolio of considered policy approaches which reach every aspect of the CCS value chain. There are specialised, diverse and often Government-funded technologies needed to efficiently operate CCS facilities.
• Given the nascent state of CCS in Australia, government support and incentives are needed to scale CCS to its full potential. Support can be seen in different forms, including government auctions, large-scale project partnerships, and major grants for eligible CCS projects.
29. How can the Australian Government better communicate and provide more transparency to local communities regarding CCS projects?
• Unless the Australian Government is a partner in a project, we do not see the Australian Government having a role in communicating and providing transparency to local communities.
• Project proponents should be responsible for communications and developing social licence in local communities.
30. How fit for purpose is Australia’s gas transmission and distribution network?
• See response to Question 16
31. What changes should be made to the transmission and distribution network to prepare for the changing profile of gas demand in Australia? What risks and opportunities would this entail?
• See Section 1.7 of our Submission.
• In the long term, the extent of any changes to the transmission and distribution networks will depend on the type of gases that need to be transported.
• Many commercial and industrial users will continue to rely on gaseous fuels.
• Both transmission and distribution networks are capable of transporting biomethane without modification.
• The extent to which assets are capable of carrying hydrogen will depend on the nature of the assets.
32. Could the construction of LNG import terminals contribute to improving energy security in Australia?
• See Section 1.6.1 of our Submission.
• The development of new LNG import terminals is likely to represent an inefficient, higher cost option compared to investment in infrastructure to deliver domestic gas.
• Gas retailers’ appetite to invest in new gas developments in eastern Australia may also be impacted should an LNG terminal be sanctioned. This is because retailers will have less of an incentive to contract long term, impacting mid-stream and pipeline infrastructure owners’ confidence to invest in gas infrastructure. In turn, this will risk bringing new domestic gas supplies to market.
39. What are the risks to Australia’s domestic gas security in the medium (to 2035) to long-term (to 2050) for your industry and how can these be addressed?
• See responses to Questions 23 and 24
40. What do you see as the biggest risk to the ongoing affordability of Australia’s domestic gas supply? For example, what are risks to affordability in the wholesale or retail market?
• See Section 1.4 of our Submission
• Failure to bring online new gas supplies is the biggest risk to the ongoing affordability of domestic gas supplies.
41. What reforms can be made at a Commonwealth, state, territory, or industry level to allow gas supply to be more responsive to domestic demand signals?
• Extremely lengthy approval processes mean that gas supplies take many years to response to demand signals.
• Expediting approval processes will make the industry more responsive and bring future gas supplies online.
42. What actions are available to lower gas costs, including substitution and new supply, to provide certainty to consumers? How would these actions further the Australian Government’s decarbonisation goals?
• See Section 1.4 of our Submission
• Bringing new gas supplies online will place downward pressure on gas costs.
• In the long term, developing a renewable gases industry will help drive down costs and further the Australian Government’s decarbonisation goals.
43. What opportunities exist in your industry to decarbonise supply chains?
• The development of renewable gases is expected to support the decarbonisation of gas supply chains.
• As outlined in Sections 1.8 to 1.10 of our submission, a market based policy similar to the Renewable Energy Target will best support the development of renewable gas industries.
• Recent changes to the National Energy Objectives and subsequent changes to the National Gas Rules expenditure criteria are also expected to support projects which help reduce the emissions from gas infrastructure.
44. Do you use any forecasts of gas supply to inform your outlook of the gas market? If so, what are they?
• See our Response to Question 1.
Upload 1
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
APA Submission
Future Gas Strategy Consultation
November 2023
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
Department of Industry, Science and Resources
Lodged online
13 November 2023
RE: APA Submission to the Future Gas Strategy Consultation
Dear ,
Thank you for the opportunity to comment on the Commonwealth Government’s Future Gas
Strategy Consultation Paper (Consultation Paper).
APA is an ASX listed owner, operator, and developer of energy infrastructure assets across
Australia. Through a diverse portfolio of assets, we provide energy to customers in every state and territory. As well as an extensive network of natural gas pipelines, we own or have interests in gas storage and generation facilities, electricity transmission networks, and
681 MW of renewable generation infrastructure.
We are actively involved in the energy transition taking place across Australia. In August 2022, we published our inaugural Climate Transition Plan which outlines APA’s pathway to net zero operations emissions by 2050.
As outlined in the Consultation Paper, the Government recognises that gas will play a key role in the energy transition. Regulatory settings must therefore support continued investment in gas infrastructure and new gas supplies. This will ensure that consumers continue to receive both reliable gas and electricity as the energy market transitions.
Renewable gases will be critical to achieving emissions reductions in many sectors of the economy. Similar to the success of the existing Renewable Energy Target (RET), a market based renewable gas scheme will help drive the development of renewable gases such as hydrogen and biomethane. Policy decisions should encourage the market to find the best opportunities for renewable gas commercialisation, and not explicitly rule out any use cases while the market is developing.
We would welcome the opportunity to discuss our submission in more detail. Should you have any questions or queries, please contact
.
Regards,
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
1 Submission
Key points
• Gas will play a key role in the energy transition. As coal power stations retire and
become less reliable, gas-powered generation (GPG) will have an increasingly
important role in supporting the security and reliability of the energy system.
• Governments should work closely with industry partners to support and fast-track the
development of new gas reserves. The Beetaloo Basin, in particular, is a natural gas
resource of potentially significant scale that, if proven, can help offset the very
significant gas supply shortfalls that may commence later this decade.
• The development of new LNG import terminals is likely to represent a less reliable,
higher cost and higher emissions option compared to investment in new gas fields and
infrastructure to deliver domestic gas.
• Gas infrastructure has an essential role to play in helping Australia achieve least cost
decarbonisation. As experience in Europe is showing, repurposing gas transmission
pipelines is a cost-efficient and safe option to transport renewable gases.
• Similar to the success of the RET over the past 20 years, a technology neutral, market
based renewable gas scheme will help drive the development of renewable gases such
as hydrogen and biomethane.
1.1 APA as a partner of choice in Australia’s energy transition
APA is a leading Australian Securities Exchange (ASX) listed energy infrastructure business.
Consistent with our purpose to strengthen communities through responsible energy, our
diverse portfolio of energy infrastructure delivers energy to customers in every state and
territory on mainland Australia.
Our 15,000 kilometres of natural gas Figure 1
pipelines connect sources of supply
and markets across mainland
Australia. We operate and maintain
networks connecting 1.4 million
Australian homes and businesses
to the benefits of natural gas. And
we own or have interests in gas
storage facilities, gas-fired power
stations.
We also operate and have interests
in 681 MW of renewable generation
infrastructure, while our high
voltage electricity transmission
assets connect Victoria with South
Australia, New South Wales with Queensland and Tasmania with Victoria.
3
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
In 2022, we completed the acquisition of Basslink Pty Ltd, which owns and operates the 370km
high voltage direct current electricity interconnector between Victoria and Tasmania. The
acquisition adds a third electricity interconnector to APA’s energy infrastructure portfolio and
is consistent with our strategy to play a leading role in the energy transition.
Most recently, we announced the acquisition of Alinta Energy Pilbara, an energy infrastructure
business in Western Australia (WA) with gas and solar generation, battery storage and
electricity transmission assets. Alinta Energy Pilbara also has an extensive pipeline of wind,
solar, gas and electricity transmission projects. The acquisition is consistent with our strategy
to play a leading role in the energy transition.
APA actively supports the transition to a lower carbon future. In August 2022, we published
our inaugural Climate Transition Plan which outlines our commitments to support Australia’s
energy transition and pathway to achieve net zero operations emissions by 2050. We recently
launched our inaugural Reconciliation Action Plan which aims to support our journey in
building better relationships with First Nations peoples in order to strengthen communities
through responsible energy – this is a key focus of APA’s sustainability strategy.
As a national and leading energy infrastructure business, we take a customer-led approach to
the development of new energy infrastructure, working to meet our customers’ needs by
delivering reliable, affordable and low emissions energy solutions. APA can support Australia’s
net zero ambitions through the timely delivery of supporting infrastructure. We also have
recent experience developing and connecting renewable generation assets to the national
electricity grid. Our ownership and operation of generation assets means we are well placed
to help facilitate the energy transition. We have:
• extensive experience working with communities
• a track record of partnering with governments in financing and managing delivery
contracts and interfaces
• trust from stakeholder groups as a national operator of complex energy infrastructure
• a proven social licence to operate
1.2 Gas is essential for energy security during the energy market transition
This section relates to questions 2, 3, 4, and 5.
The Consultation Paper highlights that gas is expected to play a key role in navigating the
energy market transition and helping Australia meet its net zero ambition targets as the
electricity sector moves to renewable energy sources.1 The transition Australia faces in
displacing ageing thermal generation with large volumes of renewable energy is not without
its challenges and ‘gas, alongside electricity storage, will support electricity grid firming’.2
1
Commonwealth Government, Future Gas Strategy Consultation Paper (Consultation Paper, September 2023) 7.
2
Ibid 7.
4
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
As recent experience in South Australia has shown, periods of low wind and solar availability require significant volumes of long duration dispatchable resources to be available to support the reliability and security of the system. Without GPG providing long duration dispatchable generation, South Australia is unlikely to have developed its renewable energy capacity to the extent that it has in such a short time frame.
Absent replacement dispatchable resources in other states, issues are likely to be experienced as coal power stations retire. The role of dispatchable generation such as GPG will become even more critical if there are delays in building the necessary electricity transmission and other forms of long duration storage to support renewable energy projects.
Despite the introduction of synchronous condensers in South Australia, GPG remains critical in ensuring sufficient electricity supply, including system strength and long duration firming, during periods of low wind and solar generation. For example, in the period from 28 April 2023 to 2 May 2023, GPG was critical to supply adequacy due to periods of low wind and solar generation. As shown in Figure 2, on three out of five days, GPG provided over 65% of peak electricity consumption at 7pm.
Figure 2: GPG supporting energy reliability in South Australia
Source: OpenNEM
Events in Queensland and Victoria over recent years have also demonstrated the flexibility and security offered by gas pipelines and GPG:
• Flexibility and energy security
On 25 May 2021, a failure of one of the generation units at Callide Power Station in
Queensland caused 477,000 customers to lose power.
In mid-June 2021, Yallourn Power Station in Victoria reduced electricity generation to
approximately 20% capacity due to the threat of floodwater from the Morwell River.
5
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
Following both these events, GPG stepped up to help provide crucial electricity
generation in both Queensland and Victoria. GPG doubled its output while not
increasing overall emissions. The ability of gas turbines to quickly ramp up and provide
long duration dispatchable generation shows they will be a critical part of the energy
system for many years to come.
• Addressing shortfalls through the gas network
In mid-July 2021, the Longford gas plant in Victoria suffered a reduction in production
due to technical problems, significantly reducing the amount of gas being supplied to
the Victorian market. This led to AEMO issuing a notice of threat to system security.3
In response to this event, it was the flexibility of APA’s 7,500 kilometres of
interconnected gas transmission pipelines that form an East Coast Gas Grid that
enabled APA to get gas from the north to the south, helping to rapidly address these
shortfalls.
On this occasion, APA’s customers were able to utilise their inventory position (known
as ‘Park’) on the Moomba to Sydney Pipeline (MSP) to support supply to the markets
through this event. Further additional capacity was available during this event should
the market have required it. The recent MSP capacity upgrade has ensured additional
flows from the MSP into southern markets can be accommodated should a similar
issue arise.
The gas network is a flexible, affordable and safe store of energy, making it ideal to help
support energy supply during extreme weather or periods of reduced supply. Locating GPG
close to major demand centres also reduces exposure to electricity transmission capacity and
frequency constraints often experienced by the overconcentration of renewable generation in
common areas of the grid. This advantage may become critical if there are delays in building
the necessary transmission investment to support renewable energy.
Gas infrastructure will play an important role for many decades to come, and therefore
regulatory settings must support continued investment in our gas infrastructure. This will
ensure that consumers continue to receive both reliable gas and electricity as the energy
market transitions.
1.3 Maintaining investment in GPG
This section addresses questions 2, 3, and 4.
It is well documented that the economics of thermal generation (coal and GPG) are under
pressure due to the lower marginal cost of wind and solar generation and the reduced flexibility
of such plant. This is leading to announcements about the closure of thermal assets:
• In February 2022 Origin submitted notice to AEMO for the potential early retirement (in
2025) of Eraring Power Station. Origin stated that this decision reflected the continuing,
3
AER, AER gas weekly report – 20-26 June 2021 (14 July 2021) .
41
APA, ‘Consortium to investigate delivery of low cost hydrogen’ (Media Release, 4 November 2021).
18
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au complete and confirms that the Mid West region is suitable for blue hydrogen production and
CCS.42
International developments have also informed our position on CCS’ potential role in
Australia’s decarbonisation journey. There are CCS facilities that are already operating at a commercial scale or on schedule to be operating in the very near future. For example, in 2020, the Norwegian Government awarded a licence for CO2 storage to the Northern Lights project as part of its wider CCS initiative called Longship. Longship is the Norwegian full-scale CCS project in which the Norwegian Government provides financial support, facilitation, and risk mitigation.
42
Pilot Energy, ‘APA Group, Warrego Energy, and Pilot extend mid-west consortium (Media Release, 19 September 2022).
19
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
Appendix A – Consultation Questions
CHAPTER 1 - DEMAND
Consumers (domestic)
1. Do you use any international and/or • APA uses forecasts for both domestic and
domestic forecasts to inform your international gas demand (LNG) as well as
outlook of the gas market? We want domestic gas supply data that is developed
your views on which scenarios best in combination with an external advisor.
reflect the demand outlook. Are • Forecasting GPG demand is particularly
there any limitations or additional difficult with global climate patterns (such
factors impacting the demand as El Nino/La Nina), seasonal and even
outlook you would like to note? daily/weekly weather events (dunkelflaute)
leading to significant fluctuations in GPG
and therefore gas demand.
2. What role do you see gas-fired • See Section 1.2 of our Submission
generators playing in supporting • Gas infrastructure will play a key role in
Australia’s 82% renewable energy helping Australia meet its net zero targets.
targets and beyond? • GPG will help ‘unlock’ renewables and
ensure sufficient electricity supply during
periods of low wind and solar generation
• While natural gas’ overall contribution to the
energy mix is anticipated to decrease, gas
generation will rise in peak period e.g.,
during winter when there is less direct
sunlight and wind
3. How will the expected trends in • GPG demand is very difficult to forecast
demand from gas-fired generators and increasingly driven by significant
impact other gas users? weather events and outages at coal power
plants.
• Peak gas demand currently occurs in winter
months. Peak events in electricity markets
are expected to become more common in
winter, due to low solar and wind output.
This will put greater pressure on winter gas
supplies.
• The impact on other gas users is difficult to
predict. With sufficient gas support and fit-
for-purpose infrastructure, GPG should be
able to dispatch and support peaking
demand.
4. What should government do to • See Sections 1.3 and 1.4 of our
consider managing these impacts Submission.
20
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
and to mitigate energy peaks caused • Governments should work closely with
by regional or seasonal variations? industry partners to support and fast-track
the development of new gas reserves. The
Beetaloo Basin, in particular, is a natural
gas resource of significant scale and can
help offset the very significant gas supply
shortfalls that are forecast to emerge later
this decade.
• As outlined in Section 1.3, it is currently
unclear whether there are sufficient market
signals to bring enough GPG into the
system.
• Energy Ministers should consider whether
alternative arrangements are required to
ensure we bring GPG into the NEM to
maintain a reliable energy system
5. How feasible, and at what scale, are • We agree that alternatives to natural gas
alternatives to natural gas for the need to be developed (see responses to
electricity sector? You may wish to questions 8, 42 and 43).
consider renewable gas alternatives • The Western Australia Renewable
for peaking generation, for example, Hydrogen Target (RHT) is a good example
biomethane and low-emissions of a scheme looking to support the
hydrogen and other forms of grid- development of hydrogen.
firming technologies like batteries • However, in the long term, natural gas will
and pumped hydroelectricity. What play a critical role in supporting Australia
barriers exist to using these decarbonising.
alternatives? • The CSIRO GenCost Report indicates that
the lowest system cost will be when
renewable generation is supported by gas.
6. How much longer will you continue • APA’s 15,000km of gas pipelines are our
using gas as a fuel source or largest source of emissions.
feedstock for your business? Do you • These arise when gas in combusted in our
think your consumption of gas will compressor units.
decline over time, and if yes, at what • Many of these compressors are in very
rate? remote locations and therefore cannot be
electrified easily.
• As outlined in our Climate Transition Plan,
we have a target of net zero operational
emissions by 2050.
• We expect our consumption of gas will
reduce over time, mainly through
compressor efficiency and compressor
electrification.
21
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
7. Are there alternatives that your • Yes, electrification of compressors is an
business can use instead of gas (for alternative to gas powered compressor
example electrification, hydrogen, units.
biomethane or circular economy • Compressors can also run on biomethane.
inputs)? What barriers exist to using • The cost of electrification and biomethane
these alternatives? How can the are barriers to these alternatives.
substitution of gas be accelerated?
8. What factor/s influence your • See Question 7. The cost of electrification
willingness to adopt electric is a barrier to adoption.
appliances or processes? How could • Government support for a market based
governments support small renewable gas scheme will help drive the
businesses to decrease gas development of renewable gases such as
consumption? hydrogen and biomethane.
• Having biomethane as a viable and cost
effective alternative to natural gas would
help reduce commercial customers’ carbon
emissions.
9. What role might carbon capture, • See Section 1.11
utilisation and storage (CCUS) and • We expect CCUS to play a key role in
negative emissions technologies achieving net zero.
(NETs) (for example direct air • APA was a consortium member of the Mid
capture and CO2 removal) play in West Blue Hydrogen Project that confirms
decarbonising industrial processes the Mid-West region as suitable for blue
that are hard to abate in your hydrogen production and CCS.
business or industry?
Community
10. If your home or small business gas • No response
appliances (stove, heating, or hot
water system) stop working, would
you prefer to keep using gas or
switch to an electric appliance?
11. If you are unsure, what would help • No response
you decide? What factors influence
your willingness to switch to electric
appliances?
Producers
12. What do you see as the role of gas • No response
in Australia’s net-zero
transformation?
13. What action is your industry or • No response
company taking to reduce
greenhouse gas emissions and does
gas use have a role to play?
22
APA Group Limited ACN 091 344 704
Level 25, 580 George Street, Sydney NSW 2000
PO Box R41, Royal Exchange NSW 1225
P: +61 2 9693 0000 | F: +61 2 9693 0093
APA Group | apa.com.au
14. How can Australian LNG accelerate • No response
global decarbonisation without
compromising energy security or
affordability?
15. What measures will increase the • We do not consider that there needs to be
transparency of LNG supply chains, additional reporting about LNG supply
including their environmental, social chains.
and governance impacts? • Existing reporting from AEMO, the ACCC,
the AER, and other Government bodies as
well as information provided to the Gas
Bulletin Board provide sufficient
transparency.
16. Does current gas transport and • Yes. Refer to section 1.6 of our submission.
storage infrastructure support the • Gas infrastructure operators have a strong
changing role of gas in the track record of delivering the necessary
residential and commercial sector? If infrastructure to ensure customers have
inadequate, what is needed and who sufficient gas in the locations they need it.
• To date, the incremental expansion of
should provide the change?
existing infrastructure has been the most
efficient, timely and lowest cost solution to
ensure that gas is delivered when and where
it is needed.
• This means that the incremental expansion
of the East Coast grid is the most efficient
solution to transport more gas from
Queensland and the Northern Territory to
residential and commercial customers in
southern markets.
Consumers (international)
17. What role will LNG – and Australian • We expect Australian LNG to support the
LNG in particular – play in your decarbonisation of many economies across
economy’s energy transition? the world.
• Similar to its role in the NEM, as coal power
stations retire across the world, LNG will
help support the reliability of energy systems
dominated by renewables.
18. What is your economy’s current LNG • No response
demand and how do you predict this
will change through to 2035 and
beyond to 2050?
19. What options should the Australian • No response
Government consider to ensure
international investment in
Australian LNG projects remains
competitive?
20. What value do you place on low or • No response
net zero emissions LNG production?
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CHAPTER 2 - SUPPLY
Producers
21. What is the role of offshore acreage • No response
releases in the context of consumer
demand and emissions targets?
What factors should the Australian
Government consider when
releasing acreage?
22. How could the offshore petroleum • No response
regime be improved to meet the
objectives of the strategy?
23. What are the major barriers and • See Section 1.4 of our Submission.
opportunities for new supply? How • Government policies looking to restrict or
can the Australian Government reduce natural gas use are increasing
prioritise, mitigate or manage these? uncertainty for investors in gas assets.
• Policy support in areas such as acreage
releases, allocation of exploration licences,
support for environmental approvals and
land access, will help mitigate some of these
barriers.
24. What are some of the opportunities • See Section 1.4 of our Submission.
for gas production in Australia in the • The Beetaloo Basin, is a natural gas
medium (to 2035) and long term (to resource of potentially significant scale and
2050)? How could these necessary can help offset the very significant gas
developments support supply shortfalls that may commence later
this decade.
decarbonisation consistent with
• Governments should work closely with
achieving emissions reductions industry partners to support and fast-track
goals? the development of new gas reserves,
including the Beetaloo Basin.
• Given GPG emits approximately half the
carbon emissions of coal, ensuring there are
adequate gas supplies will avoid the
extension of coal power stations.
Community
25. How can the Australian Government • Unless the Australian Government is a
better communicate and provide partner in a project, we do not see the
more transparency to local Australian Government having a role in
communities regarding gas communicating and providing transparency
projects? to local communities.
• Project proponents should be responsible
for communications and developing social
licence in local communities.
• However, we do see a role for Government
in supporting a more genuine debate about
the importance of gas in supporting the
energy system during the transition.
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26. What opportunities exist to improve • We see a role for the Commonwealth
engagement and consultation Government taking a national leadership
processes with industry? approach on the future of gas with industry
and state governments.
• We see an opportunity for the
Commonwealth to work with states to align
on strategic objectives, the need for gas to
support domestic industry, and the reality
that both natural gas and renewable gases
are essential for Australia’s decarbonisation
and keeping Australian industries
internationally competitive.
27. How can all levels of governments • Project proponents should be responsible
better support the industry to engage for engagement with First Nations people
with First Nations people and and community groups.
community groups? • APA recently launched its inaugural
Reconciliation Action Plan which aims to
support our journey in building better
relationships with First Nations peoples in
order to strengthen communities through
responsible energy – this is a key focus of
APA’s sustainability strategy.
Producers
28. How can Australia support the • Scaling CCS operations in Australia in
potential for cost-effective, safe and timeframes that can contribute to net zero
verifiable CCS projects, including for means there should be a portfolio of
the gas sector, other industries and considered policy approaches which reach
our region? every aspect of the CCS value chain. There
are specialised, diverse and often
Government-funded technologies needed to
efficiently operate CCS facilities.
• Given the nascent state of CCS in Australia,
government support and incentives are
needed to scale CCS to its full potential.
Support can be seen in different forms,
including government auctions, large-scale
project partnerships, and major grants for
eligible CCS projects.
Community
29. How can the Australian Government •
Unless the Australian Government is a
better communicate and provide partner in a project, we do not see the
more transparency to local Australian Government having a role in
communities regarding CCS communicating and providing transparency
projects? to local communities.
• Project proponents should be responsible
for communications and developing social
licence in local communities.
Distributors and LNG import terminal project proponents
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30. How fit for purpose is Australia’s gas • See response to Question 16
transmission and distribution
network?
31. What changes should be made to • See Section 1.7 of our Submission.
the transmission and distribution • In the long term, the extent of any changes
network to prepare for the changing to the transmission and distribution networks
profile of gas demand in Australia? will depend on the type of gases that need
What risks and opportunities would to be transported.
• Many commercial and industrial users will
this entail?
continue to rely on gaseous fuels.
• Both transmission and distribution networks
are capable of transporting biomethane
without modification.
• The extent to which assets are capable of
carrying hydrogen will depend on the nature
of the assets.
32. Could the construction of LNG • See Section 1.6.1 of our Submission.
import terminals contribute to • The development of new LNG import
improving energy security in terminals is likely to represent an inefficient,
Australia? higher cost option compared to investment
in infrastructure to deliver domestic gas.
• Gas retailers’ appetite to invest in new gas
developments in eastern Australia may also
be impacted should an LNG terminal be
sanctioned. This is because retailers will
have less of an incentive to contract long
term, impacting mid-stream and pipeline
infrastructure owners’ confidence to invest in
gas infrastructure. In turn, this will risk
bringing new domestic gas supplies to
market.
33. Under what conditions would LNG • No response
import terminals be commercially
viable in Australia?
Producers and LNG facilities
34. Are you able to attract and retain the • No response
workforce and skills you need? How
will these shift as we transition to net
zero emissions?
35. What are your long-term business • No response
and investment plans beyond 2035?
How might these affect local
economies, employment and
communities?
36. Describe the projects or best • No response
practice examples of industry
engagement with the local
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community, as well as the benefits
these projects bring to the people
and regional economy.
Community
37. How has the oil and gas industry • No response
impacted the local economy and
employment opportunities in your
region?
38. What actions will assist workforce • No response
retention, upskilling and mobility in
your community as the economy
transitions to net zero emissions?
Consumers (domestic)
39. What are the risks to Australia’s • See responses to Questions 23 and 24
domestic gas security in the medium
(to 2035) to long term (to 2050) for
your industry and how can these be
addressed?
40. What do you see as the biggest risk • See Section 1.4 of our Submission
to the ongoing affordability of • Failure to bring online new gas supplies is
Australia’s domestic gas supply? For the biggest risk to the ongoing affordability
example, what are risks to of domestic gas supplies.
affordability in the wholesale or retail
market?
41. What reforms can be made at a • Extremely lengthy approval processes mean
Commonwealth, state, territory, or that gas supplies take many years to
industry level to allow gas supply to response to demand signals.
be more responsive to domestic • Expediting approval processes will make the
demand signals? industry more responsive and bring future
gas supplies online.
42. What actions are available to lower • See Section 1.4 of our Submission
gas costs, including substitution and • Bringing new gas supplies online will place
new supply, to provide certainty to downward pressure on gas costs.
consumers? How would these • In the long term, developing a renewable
actions further the Australian gases industry will help drive down costs
and further the Australian Government’s
Government’s decarbonisation
decarbonisation goals.
goals?
43. What opportunities exist in your • The development of renewable gases is
industry to decarbonise supply expected to support the decarbonisation of
chains? gas supply chains.
• As outlined in Sections 1.8 to 1.10 of our
submission, a market based policy similar to
the Renewable Energy Target will best
support the development of renewable gas
industries.
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• Recent changes to the National Energy
Objectives and subsequent changes to the
National Gas Rules expenditure criteria are
also expected to support projects which help
reduce the emissions from gas
infrastructure.
44. Do you use any forecasts of gas • See our Response to Question 1.
supply to inform your outlook of the
gas market? If so, what are they?
You may also wish to consider
whether these forecast scenarios
consider the technical and
commercial uncertainties associated
with gas reserves and resources.
Which scenarios do you consider
best reflect the supply outlook?
45. Are there any limitations or caveats • No response
associated with these scenarios?
How do you address these
limitations?
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