Decarbonisation is a gradual process
Published Thu 14 Jul 2022
The Australian Financial Review | Ian Grayson
There is broad agreement within Australia’s industrial sector that renewable gas has a role to play in the nation’s decarbonisation process.
Bearing this in mind, attention is being focused on how renewable options can be injected into the national network to reduce reliance on natural gas.
Speaking at the recent AFR roundtable event, general manager of energy at Brickworks, Melissa Perrow, pointed out that her company is already making use of a blended supply to support parts of its operations.
“We have experience using raw biogas from two landfill facilities at two of our Sydney plants,” she says. “So, we already have experience using a form of renewable gas and we’re actively conducting a feasibility assessment around co-locating a biomethane renewable gas facility at our brick plants.
Perrow says her company’s focus on renewable gas stems from the fact that it is one of the largest gas consumers in Australia. The company has wholesale gas agreements in place and so has essentially become its own retailer.
“The issue for us going forward around decarbonisation comes from the fact that we are a business that cannot electrify,” she says. “You cannot electrify the brick kilns because they’re burning at temperatures of over a thousand degrees.
“So, we have a very strong interest in decarbonising the gas network. We know it will take some time, but we see that this is something that we really need to do as we head towards net zero.”
Roundtable participants agreed that renewable gas has an important part to play in Australia’s march towards net-zero emissions and introducing it into the national network was a good initial step.
Energy consultant Matthew Warren told the roundtable there will always be industries where electrification of certain processes is simply not practical. For this reason, there will continue to be demand for gas.
“So, there are specific applications where high temperature and flame-based consumption of energy will continue and they need to be zero emissions,” he says. “I think they will far exceed the supply you could possibly bring just with biomethane, which is where (options such as) hydrogen come in.”
Perrow agreed, saying there are many options that need to be explored as part of the overall decarbonisation process.
“However, when you look at trying to decarbonise the gas network, you’re quite limited,” she says. “So, to the extent that we have biomethane, it should be prioritised to be injected into networks to start that decarbonisation process.”
While taking such as step will help reduce overall emissions, the roundtable participants agreed that cost reduction would not be an initial benefit. While prices are likely to come back from the unnatural highs caused by recent supply constraints, they are unlikely to fall below longer-term averages.
Perrow says renewable gas does currently come at a premium when compared with the cost of natural gas. For this reason, the process needs to begin with the addition of small amounts that are gradually increased over time.
“It will be more expensive in the short to medium term, but if we’ve got small amounts coming into the network, it starts the process,” she says. “It starts reducing the cost down the cost curve and that’s how we progress forward.
“It’s a long-term strategy. People really need to remember that the decarbonisation of electricity grid has been occurring for more than 20 years, so this is going to be a gradual process. From an end-user perspective, what we want from the policy side is for all options to be included.”