Focusing on Victorian gas:�Role for Federal Government in strengthening the Gas Substitution Roadmap

Presentation by Jim Crosthwaite and Ann Sanson

For Darebin Climate Action Network

to �the Hon Ged Kearney MP

6 June 2024

Gas Substitution Roadmap Update (Dec ‘23)�Pillar 1: Invest in energy efficiency & electrification �

Bold Italic – role for Commonwealth

​

• Vic Energy Upgrades expanded - incentives up to $3,600. Gas removed.
• New homes - all-electric if need planning permit
• Disconnect from gas – fee capped at $220
• SEC exploring options for a trusted ‘one stop shop’
• Reg Impact Statement - electrify buildings, replace appliances at end of life, standards for rental properties

​

OUR CONCERNS

• Barely a mention of energy efficiency in existing homes except rentals
• Govt role largely limited to creating markets (VEU) and regulation – also need direct grants, rebates, incentives - on a large-scale

​

​

​

It’s happening - falling gas demand in Victoria �– accounting for warmer 2023 winter (blue line)

Graph and analysis by John Godfrey,

retired Exxon-Mobil engineer

Expected warm winter in 2024 and further electrification will have another double whammy impact on gas demand

Data & experts contest the claim of “stable demand” made in Future Gas Strategy (p.14)

​

​

Low income, big-gas using households �(more data needed for targeting)

The lowest-income households usually occupy the most draughty, least insulated dwellings and are least able to afford to replace polluting, inefficient appliances.

​

(CGRR p.20)

Prepared by energy expert Alan Pears AM

Action with households �Very tough versus eminently doable

Future Gas Strategy paints a tough picture

• “Australia’s east coast would need to disconnect, or provide low-emission gases to, around 144,000 houses each year for the next 20 years”

Why don’t we focus on this

• “Australians are installing an estimated 940,000 new gas appliances and 800,000 new resistive electric appliances every year”

And this

• if heat pump-based electric appliances were installed instead, for each year the combined lifetime cost savings would amount to $3.4 billion. IEEFA

Households need trusted advice and support

​

​

​

Current partnerships between Governments�Gas Substitution Roadmap Update (section 7)�

Codes and standards

• National construction code – update 2022, 2025, 2028
• Appliance efficiency – GEMS Act, E3
• NatHERS house energy rating
• [note also Trajectory for Low Energy Buildings – due end 2024]

​

Funding for Vic Social Housing Program

• Via $1.7b Energy Savings Package

​

Financing the energy transition

• $1b to create Household Energy Upgrades Fund
• Initiatives on green finance

……………………………….

Regulation of east coast gas market

• So domestic gas is available to manage supply risk and prices

​

Task agencies to report on how to strengthen and speed up each

Important national initiatives

Energy performance in homes

• $1 billion Home Energy Upgrades Fund (HEUF)

​

• CEFC ....allocated $60 million to the provision of low interest green loans to help finance residential energy efficiency upgrades, including for high performance electric appliances and “battery-ready” solar for existing Australian homes.
• fintech outfit Plenti to offer green loans with interest rate discounts of up to 2.74% per annum

​

• More to come – “proposals covered green mortgages, green personal loans and other innovative green finance products to improve home energy performance for homeowners, renters and strata properties.”

​

​

Gas Substitution Roadmap Update (Dec ‘23)�Pillar 2 Develop biomethane and hydrogen for hard to electrify industrial gas uses

Bold Italic – role for Commonwealth

​

• Scale up biomethane & renewable hydrogen

​

OUR CONCERNS

• Electrification significant role incl. high temperature applications
• Limited resource for biomethane is available
• Many problems with hydrogen – gas lobby wants it in our pipelines, but huge technical and cost problems
• Made in Australia Actions foreshadowed can potentially get industry off gas faster – make sure priority and funding are given

​

​

Action to reduce industrial use of gas

Bold Italic – role for Commonwealth

​

Over 600 big users in Victoria - relatively constant over the year

31% of total gas use - 66 PJ in 2020

​

​

‘Reserve’ gas for their use

​

Reward industry for curtailing demand on peak winter days

Similar to ‘demand-response’ scheme paying big electricity users during high-demand

Push industry harder with incentives and flexible finance to electrify processes & improve efficiency of gas boilers

Future Gas Strategy

• says ~74% gas consumption is for heat (p.10)
• downplays potential - BUT its supporting Analytical Report cites big opportunities in Europe (p.31) and in Victoria in low and medium heat applications (p.45)

Image: Magda Ehlers from Pexels

Gas Substitution Roadmap Update (Dec ‘23)�Pillar 3: Maintaining reliable, affordable gas supply

​

Bold Italic – role for Commonwealth

​

• Calling out the Feds for not reserving gas for domestic use
• Advocate for the prioritisation of domestic supply for domestic users on fair terms and reasonable prices.
• “Considering options for sourcing short-term, transitional supply”
• Assessing what more needs to be done locally to ensure stable gas supplies in coming years

​

OUR CONCERNS

• Vic gas is still flowing to NSW/Qld, SA and Tas
• The risks to supply, while genuine, appear grossly exaggerated
• Gas consumption forecasts are plainly wrong
• No plan when & how to decommission parts of 30,000 kms distribution network
• Unwilling to take on Exxon-Mobil and Woodside, and other minor producers

​

​

Flawed LNG import solution

• “We’re the biggest gas exporter in the world. Why then are we paying four times what we ought to for gas? Why is it cheaper to buy Australian gas in Japan, 20,000k away? Why is there no reservation policy on the East Coast?”

​

• “The gas cartel ensures the domestic market is just “starved” of gas to keep prices nice and high and make super profits”

​

• “Fossil fuel giants, such as Exxon which racked up $70bn over 7 years in total income without paying a cent in tax to the ATO… funnelling its super profits offshore”

​

• What about massive Scope 3 emissions?

​

• LNG imports mean higher prices
• Gas will sell at top prices
• Big companies will profit via transfers
• Viva will buy from its main shareholder Vitol
• Woodside will transfer profit internally

https://michaelwest.com.au/big-gas-v-the-people-acute-energy-crisis-puts-albo-straight-to-the-test� with comments by Bruce RobertsonJune 2022

Gas-powered electricity generation (GPG)�Poor reason to expand supply

Gas demand for GPG over winter months

GPG (MWh/day) – by day, 2021

Victoria doesn’t need more gas supply for GPG.

Future Gas Strategy confuses by focus on GPG being 33% of total Australian use – big in WA & Qld (p.10)

GPG projected to provide only 2% of Victorian electricity soon

– Simon Holmes a` Court, MEI

(i.e. being displaced by batteries for peaking, hydro, Sth Aust exporting)

Future Gas Strategy tends to conflate state gas uses – and avoid state-specific solutions

Gas Substitution Roadmap Update (Dec ‘23)�Other sections

​

Bold Italic – role for Commonwealth

​

• Supporting businesses and households to transition

​

• Transitioning the Government’s own gas use

​

• Preparing the future workforce
• important, but not the focus of this presentation

Federal tax options

For business

• Offer tax rebates/discounts which can be very influential as the finance people dominate business decision-making

​

For landlords

• Tie income tax deductions for standards for rental property No deductions for properties that are not meeting the local standards (as set by states and councils).

​

From Gas Free Victoria mini-survey

​

Federal budget options

• Fund the One Stop Shop so households have trusted advice on energy efficiency & electrification - both action & suppliers
• Start funding home battery systems alongside solar
• Fund household electrification rebates, to be administered by states and territories
• Offer: Environment Victoria happy to brief with more detail
• Redeploy the Middle Arm subsidies to truly clean and green industries
• Shift focus in grants and incentives to energy efficiency

​

From Gas Free Victoria mini-survey

Federal regulatory changes

Gas infrastructure - reject gold plating

• AEMO through unnecessarily high reliability standards that customers don't accept – means more gas needed!!
• AER through allowing unnecessary capital investment by energy distributors – for electricity, but no doubt for gas too

​

​

Expand business obligations

• Require reporting by large emitters to include efficiency indicators of energy performance based on data on production/gross value added, not just energy and emissions data (under NGERS - National Greenhouse and Energy Reporting)
• Introduce requirements on business to analyse existing limited energy performance data and provide support for strong data analytics. Very few businesses know how efficient or inefficient they are.
• Bring forward APRA and ASIC requirement for senior management and Boards to consider wider range of information as part of the new Financial Accountability Regime

​

From Gas Free Victoria mini-survey

Ask for briefings �from both IEEFA and Climate Energy Finance

Engage with IEEFA on their research on actions that will seriously help Victoria. They argue for "supporting electrification, energy efficiency and distributed energy resources, and reducing the supernormal profits currently being made by electricity networks.“

​

Talk to them about the serious questions hanging over the Future Gas Strategy

​

Talk to Climate Energy Finance about boosting the growing efforts to decarbonise the housing stock by forcing stronger actions by banks

​

Amandine Denis-Ryan – CEO IEEFA Australia

Tim Buckley – Founder, Director - Climate Energy Finance

​

​

Our ‘big asks’: What you and Feds can do

1. Be informed - consult independent experts & counter the gas lobbyists stalking Parliament and their glossy presentations to energy agencies. Question AEMO’s forecasts
2. Engage with Lily & unions – help Lily to hold her nerve, fully implement the positive actions in the Roadmap, & actively help with 2024 Update
3. Press for funds for Victoria’s ‘one stop shop’
4. Hold a blowtorch - to speed up national energy programs
5. Reject Future Gas Strategy – it emboldens gas lobby in Victoria
6. Request concrete plans to transition all Fed owned buildings off gas, particularly for heating - half of Victoria's gas goes into heating buildings.

​

• No new gas permits. Stop seismic blasting in Victorian waters.

​

Challenge pro-gas rhetoric about gas in Victoria

Wed 26th Jun 2024, 6pm - 8pm

The Better Building Exchange�427 Albert St, Brunswick