Energy debate searching for middle ground

The Australian Financial Review | Mark Eggleton

The Australian Financial Review co-hosted the recent Energy Solutions roundtable with Jemena and Australian Gas Networks on how the nation can speed up our energy transition.

With Australia’s energy markets in turmoil, consumer confidence in the market is down to just 40 per cent, according to the June 2022 Report of the Energy Consumer Sentiment Survey (ECSS), released last week by Energy Consumers Australia.

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Moreover, 88 per cent of Australians are highly concerned or somewhat concerned that energy will become unaffordable for them over the next three years.

Adding to this mix is 94 per cent of consumers are concerned that energy will become unaffordable for others during the next three years.

The Financial Review co-hosted the recent Energy Solutions roundtable with Jemena and Australian Gas Networks on how the nation can potentially hasten our energy transition Photo: Jeremy Piper

There are many factors driving this latest sentiment and a lot of it is due to larger issues such as the current global energy crunch, but it would seem other parts of the world are acting a little faster to mitigate against the effects of geopolitical turmoil as well as continue the transition to a cleaner energy future.

For example, back in March, the European Commission released the REPowerEU Plan designed to reduce Europe’s dependence on Russian fossil fuels while also accelerating the transition to cleaner energy.

The plan was further augmented in May with a commitment to invest over $55 billion to “support the development of new capacity and infrastructure to accommodate biomethane into the gas grid and create energy communities” the chief executive of the European Biogas Association, Harmen Dekker said at the time.

Let’s start developing all of them and see how technology develops, says Andrew Dillon. Photo: Jeremy Piper

Bearing this in mind, The Australian Financial Review co-hosted the recent Energy Solutions roundtable with Jemena and Australian Gas Networks on how the nation can potentially hasten our energy transition without exacerbating the current unease in energy markets.

Speakers at the roundtable agreed the debate around Australia’s energy transitions has always been a binary one and we continue to argue along the same lines whether it be solar or wind and, on the storage front, batteries or pumped hydro. The key is to get beyond binary debates and find a sensible middle ground.

Roundtable participant, Andrew Dillon, chief executive of Energy Networks Australia, said most in the energy industry realise our energy future is going to be a combination of many technologies.

“We don’t know how much of each technology but let’s start developing all of them and see how technology develops,” Dillon says.

We have to get the energy transition debate back in the middle from extremes, says Charles Rottier. Photo: Jeremy Piper

He says we should be developing electrification and renewable gas technologies and see how they evolve.

“And importantly, customers then get to choose what they want to do and what sort of de-carbonisation path they want to go on.”

The chair of the Future Fuels CRC, Charles Rottier, agrees and says, “we have to get the (energy transition) debate back in the middle from extremes”.

“To do that we need government regulatory support to introduce renewable gases into the system and help supply reliable energy for the future.

“Gas and electricity in combination is a solution and probably the long-term solution.” Rottier says.

Fellow roundtable participant, Kristin Raman, acting executive general manager people and strategy, Australian Gas Infrastructure Group, says “renewable gas be it via biomethane or renewable hydrogen has enormous potential”.

Renewable gas has enormous potential, says Kristin Raman. Photo: Jeremy Piper

“Gas, as an energy source, plays a really important role. It has certain characteristics about its storage, about its high temperature that makes it incredibly important,” she says.

Raman agrees the current binary argument doesn’t help and government and industry need to help educate consumers that our decarbonisation journey doesn’t go down one particular path.

And those multiple paths include renewable gas which is biomethane or green hydrogen that’s not going to contribute to incremental carbon emissions.

“It’s typically in the form of hydrogen, green hydrogen, biomethane and synthetic methane,” Gabrielle Sycamore, general manager, renewable gas, Jemena, says.

Matthew Warren, principal of Boardroom Energy, points out the renewable gas industry is made up of two tribes — hydrocarbons, which has a carbon molecule and there’s hydrogen which does not have a carbon molecule.

Matthew Warren says the hydrocarbon side of renewable gas uses existing waste. Photo: Jeremy Piper

“They’re two separate families, they’re two completely different things that can do a similar or same job,” Warren says.

Of those two tribes the hydrocarbon side or biomethane side is utilising existing waste and taking methane out of the atmosphere and reusing it.

“When we start talking about bioenergy, biomethane in particular, that is an existing form of carbon from a waste product, landfill gases, wastewater.

“Where there’s humans, there’s waste. It’s about grabbing that waste and using it, upgrading it and using it to displace fossil fuel,” Sycamore says.

“What’s important is ensuring we educate people on why it is a renewable gas.”

Bioenergy can be an effective replacement for all fossil fuels, says Shahana McKenzie. Photo: Jeremy Piper

Fellow roundtable participant, Shahana McKenzie, chief executive of Bioenergy Australia, says bioenergy can be an effective replacement for all fossil fuels.

She says the challenge is bioenergy could be anything from liquid fuels, gases, electricity, bioplastics by-products as well as chemicals and more.

According to McKenzie, the challenge is having so many options make it difficult to focus the narrative so what Bioenergy Australia has done is develop a bioenergy road map.

Developed in consultation with the last federal government, the road map focussed on three areas.

“The first being decarbonisation of the gas network showing that 23 per cent of Australia’s domestic gas use could be delivered by biomethane by 2030. The second, sustainable aviation fuel indicated 19 per cent and the third was renewable industrial heat being 33 per cent and that was all by 2030,” McKenzie says.

John Falzon says the easy wins in decarbonisation have been exhausted. Photo: Jeremy Piper

Unfortunately, nothing much has been done since the road map was developed.

McKenzie says the beauty of biomethane is its ability to operate within the existing distribution infrastructure.

“We’ve done some work recently that showed we could be injecting 5 per cent by 2025 into the energy network and we currently have 45 projects that could actually be injecting within the next 18 months — if there was a favourable policy environment for that to take place,” she says.

John Falzon, chair of specialist biogas renewable energy firm LMS Energy, says his company takes 25,000 tonnes of methane out of the atmosphere every hour of every day so they’re playing a major role in decarbonising the energy sector.

He says thus far the electricity sector has been very successful in its decarbonisation efforts without plunging the nation into darkness, but all the easy wins have nearly been exhausted.

“We’re now starting to enter the areas of difficult abatement,” he says.

“Now it’s the turn of the gas industry and in sectors such as agriculture and transport, biomethane and renewable hydrogen have a role to play in helping decarbonise.

“It can’t do it all, but the gas industry has a very important role in making sure it abates in very hard-to-abate areas,” Falzon says.

For Falzon, people need to understand that right now the energy industry must work together and it that entails co-existing with coal and gas.

“This means we must make sure we work together if we’re going to decarbonise successfully going forward and understand it does come at a cost.

“The cost is what’s missing out of the whole debate and the more that that’s out in the open and the community understands that I think the better off we all will be,” Falzon says.

We need better incentives, says Scott Turner. Photo: Jeremy Piper

For Warren, bioenergy will play a very valued role in our transition, but we need to get organised quickly as there is “a time imperative” when it comes to our energy transition.

“It’ s a sector clearly both in its infancy in Australia and has enormous potential, as a partial replacement for natural gas and because it will perform roles that no other fuel can.

“Biogas is one of a few clean energy vectors we need to develop and bring to market as cost-effectively, as quickly as possible,” Warren says.

Scott Turner, who heads up energy markets, strategy & regulatory affairs at locally grown but global producer of sustainable and renewable energy EDL, says we need to build better incentives to decarbonise.

He says incentives exist in all the countries where it has operations including the US, UK, Canada and Greece.

“Here in Australia the classic example is rooftop solar where government incentivised people to put roof top solar in.

“We can have green gas — it’s new and the resources and technology are there. We just need the right incentives to make it happen.

“It’s happening today all over the world and it plays a real role in providing fuel security and importantly, decarbonising gas and it utilises the existing infrastructure.

“They’re all really strong, powerful things and we shouldn’t throw away the things we have already today,” Turner says.