The Victorian Government has released its Gas Security Statement, outlining its comprehensive plan to secure long-term gas supply for gas-powered generation and the businesses and industries that need it.
For decades, Victoria has produced most of Eastern Australia’s gas and still uses more gas than any other state. However, the State Government said with gas from elsewhere more expensive than Victoria’s past supplies, decisive action is needed to shore up supply.
The Victorian Government’s comprehensive response combines a gradual reduction in household demand for gas with new supply and storage, all with a strong emphasis on ensuring supply for the businesses and industry that require gas.
The Gas Security Statement details the action the Victorian Government has undertaken, the work it is currently doing and what comes next.
Upstream supply
While the Gas Substitution Roadmap sets a strategic direction to move away from fossil gas in the long term, the State Government said gas still provides essential services to Victorian households, businesses and industry.
The key actions outlined in the statement to bolster gas supply include:
- Consulting on the design of the Industrial Renewable Gas Guarantee (IRGG), which will deliver renewable gas into the system, ensuring the availability of high heat gas and methane feedstock to industries that need it, with a target of 4.5PJ by 2035 under consideration.
- Supporting large businesses to improve their energy efficiency and explore electrification, shoring up supply for gas-reliant industries and developing green industry skills and jobs.
- Further reducing gas demand in homes by requiring Victorians to replace gas hot water systems with electric appliances and make the switch to energy efficient electric appliances.
Networks and storage
As the way Victorians consume energy evolves and gas supply sources change, the State Government said the way Victoria uses its gas networks and storage will evolve too.
While electrification is expected to gradually reduce long-term consumption, Victoria’s pipeline and storage network must remain resilient through the transition. Investment is required in storage facilities and existing pipeline infrastructure to maximise its efficiency.
The key actions the State Government will take to build a flexible, resilient system include:
- Targeted investments to ensure Victoria’s infrastructure remains fit for purpose, delivering capacity and storage in the right places at the right times.
- Working with partner jurisdictions to review the regulatory regime for gas distribution networks to deal with challenges of declining demand as the transition proceeds.
End use policy
The Victorian Government said reducing household gas usage through improved energy efficiency, electrification, and renewable gases will unlock new supply for industry.
In total, Victoria’s gradual demand reduction efforts cumulatively are expected to save up to 19.2PJ by 2029 – equal to around nine per cent of Victoria’s industrial demand, and 205PJ by 2035, effectively representing a new source of the lowest cost gas in the country.
The State Government said by reducing the level of demand for gas in the market, it is putting significant downward pressure on gas prices for Victoria’s industrial base.
Actions to achieve this include new building electrification and minimum energy efficiency standards, which the Victorian Government said will be the final gas appliance reform in this term of government.
The Victorian Government said in combination, its pragmatic and comprehensive actions will reduce demand and increase supply fast enough to overcome the east coast gas market’s forecast shortfalls.
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