The Australian Financial Review co-hosted the July 2022 Energy Solutions roundtable with Jemena and Australian Gas Networks on how the nation can speed up our energy transition.
One of the great challenges Australia’s renewable gas industry and especially biomethane must confront is it’s still partly thought of as being part of the “nuts and berries fringe” of the energy sector and a lot of small players will dabble in it but not much else, says the chief executive of Bioenergy Australia, Shahana McKenzie.
Speaking at the recent Energy Solutions roundtable co-hosted by the Financial Review, Jemena and Australian Gas Networks, McKenzie pointed out the opportunity in Australia is quite significant and we must look internationally to see what’s possible.
In Europe, for example, the European Union wants output to more than double and contribute to about 3 per cent of a targeted two-thirds reduction in imports of Russian gas by the end of the year as part of its RePowerEU plan.
Whether this is possible is moot, but the EU has doubled down on its commitment by committing more than $55 billion to support biomethane production.
The plan calls for a boost in sustainable biomethane production to 35 billion cubic metres by 2030 by establishing an industrial biogas and bio-methane partnership to stimulate the renewable gases value chain.
It also provides producers with incentives for biogas upgrading into bio-methane and promotes the “adaptation and adjustment of existing and the deployment of new infrastructure for the transport of more biomethane through the EU gas grid”.
The focus should be on sustainable production, ensuring that biomethane is produced from organic waste and forest and agricultural residues, to avoid impacts on land use and food security.
Moreover, the International Energy Agency suggested stepping up biogas production as part of its 10-point plan to reduce the EU’s reliance on Russian natural gas.
And the big global energy providers are investing heavily in it as well, with Shell starting its first US biomethane facility last September, while TotalEnergies has partnered with Veolia to produce biomethane from wastewater.
Beyond biomethane, the REPowerEU Plan proposes three “hydrogen import corridors” via the Mediterranean, North Sea and, eventually, Ukraine.
Yet while the world is turning its attention to renewable gas, through green hydrogen and biomethane, Australia is being left behind despite its domestic potential.
Scott Turner, head of energy markets, strategy & regulatory affairs at distributed energy player EDL, says the Brisbane-based globally operated energy provider has spent close to half a billion dollars in the US in the last five years doing renewable gas and landfill but “we’ve probably spent close to zero in Australia other than maintaining existing assets”.
“We already have three renewable gas plants in the United States where we clean up gas and inject it into the pipeline and we have two more under construction,” Turner says.
He says the company will deliver around one petajoule of green gas into the US by 2023-24.
“In the US, there are already more than 200 plants operating today that are cleaning up landfill or dairy gas or other things and injecting it into the pipeline and over a thousand globally,” Turner says.
Importantly, it’s already cleaning up industry. For example, Turner says in the US biomethane is predominantly used in heavy vehicles where “those 200 plants are not putting it into the network but helping to decarbonise transport as there’s no other real option”.
“And the target’s just been set for 2022 for that biomethane into vehicles. It’s going to displace 2.4 billion litres of diesel,” Turner says.
Also speaking at the roundtable, John Falzon, chair of specialist biogas renewable energy firm LMS Energy, says his company exists today because of biogas and have projects in the US, New Zealand and Australia.
He says the renewable gas price in the US is high, yet the industry continues to move forward rapidly while here we still haven’t recognised the huge potential for it to assist decarbonisation of industry.
For Turner, it’s because the US has a regulatory environment that “supports gas as a decarbonisation source for transport and in networks”.
“If you go to California, they have a lifecycle emissions calculation they do and they do it for transport, but they say, for example, if you are diesel or gasoline, then it’s a score of 90.
“The aim is to get to zero so things like anaerobic digestion and green gas from the dairies have a score of negative 300,” Turner says.
The point is negative 300 not only offsets transports emissions but starts to offset other areas as well.
This is important because “net zero isn’t we’re at zero, net zero is we’ve got lots of emissions still, so (with green gas for example) they’re not only working towards net zero, but working towards zero”.
This article was written by Mark Eggleton on the 14th July 2022 for The Australian Financial Review and was sponsored by Jemena and Australian Gas Networks.
https://www.afr.com/companies/energy/australia-must-look-at-global-examples-for-the-use-of-gas-20220711-p5b0uu