Written by Sarah McNamara, chief executive of the Australian Energy Council.
Published in the Sydney Morning Herald, 27 August 2020
Gas is rapidly becoming the new battleground in the climate wars. Depending on your position, gas can be a climate fix or agitator. Switching from coal to gas has helped bring down emissions globally and gas-powered generation’s flexibility makes it suited, along with technologies such as batteries and pumped hydro, to bolster intermittent renewables like wind and solar.
Australia's Chief Scientist, Alan Finkel, correctly identified that gas was likely to play a critical role in enabling the increasing integration of renewables.
Coal-fired generators have been the backbone of Australia’s electricity supply for the past century, but they will gradually leave the market. Major energy companies are moving away from coal and will continue to do so as existing power stations reach the end of their operating lives, and Australia transitions towards greater renewable energy generation.
It’s a similar story with older gas-fired plants. There is also work under way to explore how to reduce emissions from gas.
The Australian Energy Market Operator’s Integrated System Plan reinforces what the energy industry already knows – we are going through a major transformation at an unprecedented rate. The other is that coal and gas plants do have a role to play as we develop more renewable sources of generation.
The market operator has flagged the need for new flexible, dispatchable resources such as pumped hydro and large-scale battery storage. Synchronous generation such as gas-fired power stations can provide the kind of support needed to stabilise the grid. This support has traditionally been provided by coal-fired power stations.
Ultimately, the National Energy Market will draw on a diverse range of technologies, some of which are still emerging, such as hydrogen. The key to managing supply security alongside affordability, while meeting climate objectives, will be having a well-designed market – because that will determine the optimal mix.
It is not one size fits all. We will need that mix as we continue to make the transition. The ultimate blend will be driven by costs, availability and suitability of different technologies.
Unfortunately, we risk being too caught up fighting in our corners to allow the best solutions for the climate and consumers to emerge.
The Australian Energy Council has welcomed the release of the Energy Security Board's options paper,which is the result of a substantial consultation process.
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