Policy roadmap to net zero: the role of gas in decarbonising the National Energy Market
Stephanie Byrom A B D , Geoffrey D. Bongers B and Andy Boston CA University of Queensland, St Lucia, Queensland, Australia.
B Gamma Energy Technology, Eatons Hill, Queensland, Australia.
C Red Vector, Loughborough, The United Kingdom.
D Corresponding author. Email: s.byrom@uq.edu.au
The APPEA Journal 61(2) 375-378 https://doi.org/10.1071/AJ20119
Accepted: 17 March 2021 Published: 2 July 2021
Abstract
As the National Energy Market (NEM) changes to a more diverse grid with emissions reduction targets, the way we value technologies must also change (Boston et al. 2017). This change in value is fundamental as the future low emissions grid will require careful planning and implementation to guarantee the lowest total system cost is maintained, particularly as a net zero grid will be drastically larger than the current system. This planning must include system strength. The Australian Energy Market Operator Integrated System Plan states that the current market mechanisms cannot facilitate achieving a low emissions grid (Australian Energy Market Operator (AEMO) 2020a). Policy and market mechanisms will need to be designed for this changing system. If net zero is to be met, Modelling of Energy and Grid Services by Red Vector and Gamma Energy technology has shown that this future grid needs to contain:
approximately 100 GW of variable renewable energy;
almost 20 GW of firm, low emissions generation, such as gas or coal with carbon capture and storage (CCS), bioenergy with CCS and hydroelectric power. If CCS is not available, nuclear power will be required;
more than 10 GW of storage, including pumped hydro energy storage and other energy storage technologies and
over 30 GW of firm, dispatchable peaking plant, including coal- and gas-fired power generation.
This study sets out the role for gas in a policy road map to net zero for the NEM, harnessing and reforming existing policies, as well as introducing new mechanisms to achieve net zero emissions while retaining a reliable grid at the lowest total system cost.
Keywords : total systems cost, grid planning, decarbonisation, net zero, National Energy Market (NEM), system strength, gas-fired power generation.
Stephanie Byrom is an experienced Energy Policy and Technology Specialist with Gamma Energy Technology. She has a demonstrated history of working in the mining and energy industry, beginning her career with Rio Tinto Energy. She is currently undertaking a PhD at the University of Queensland researching policy and market mechanisms to lead to a decarbonised and reliable power sector at the lowest total system cost. |
Geoffrey Bongers is an Adjunct Professor in the Department of Engineering at the University of Queensland in Brisbane. He is also a director at Gamma Energy Technology P/L, an independent energy consulting company. The main focus of his work is on the technoeconomics of energy production and modelling energy systems to understand what the optimum energy transitions look like. He holds a PhD from Monash University, Melbourne, Australia. |
Andy Boston is the director at Red Vector, an energy consultancy for modelling electricity markets, integration of renewables, whole systems analysis, technoeconomics and business games. He is the developer of the MEGS model and cofounder of Heuristic with its portfolio of business games for Power Trading, Transport Planning and R&D Impact. |
References
Australian Competition and Consumer Commission. (2020). East Coast gas prices appear too high and future supply is uncertain. Available at https://www.accc.gov.au/media-release/east-coast-gas-prices-appear-too-high-and-future-supply-is-uncertainAustralian Energy Market Operator (AEMO). (2020a). 2020 Integrated system plan. Available at https://www.aemo.com.au/energy-systems/major-publications/integrated-system-plan-isp/2020-integrated-system-plan-isp
Australian Energy Market Operator (AEMO). (2020b). System strength in the NEM explained. Available at https://www.aemo.com.au/-/media/files/electricity/nem/system-strength-explained.pdf?la=en
Boston, A., Bongers, G., Byrom, S., and Staffell, I. (2017). Managing flexibility whilst decarbonising electricity - the Australian NEM is hanging. Available at https://www.powerfactbook.com/downloads/energy-reports
Boston, A., Bongers, G., and Byrom, S. (2018). The effect of renewable energy targets on the National Energy Market, Brisbane, Australia.
Christensen, J., and Crabtree, B. (2019). Primer: 45Q tax credit for carbon capture projects. Great Plains Institute. Available at https://www.betterenergy.org/wp-content/uploads/2019/06/45Q_Primer_May_2019.pdf
Clarke, M. (2020). Federal Government threatens to build gas plant if electricity sector doesn’t replace retiring coal-fired power stations. Available at https://www.abc.net.au/news/2020-09-14/government-unveils-gas-fired-coronavirus-recovery-plan/12663214
Department of Industry Science Energy and Resources. (2020). Australia’s climate change strategies. Available at https://www.industry.gov.au/strategies-for-the-future/australias-climate-change-strategies
Garnett, A., Underschultz, J., and Ashworth, P. (2019). Project report: scoping study for material carbon abatement via carbon capture and storage. The University of Queensland, Brisbane. Available at https://espace.library.uq.edu.au/view/UQ:734606
Geoscience Australia. (2020). Building Australia’s resource wealth. Available at https://www.ga.gov.au/about/projects/resources
NSW Department of Planning Industry and Environment. (2016). Fact sheet: achieving net-zero emissions by 2050. NSW: Office of Environment and Heritage, Sydney South.
Queensland Department of State Development, T. a. I. (2019). State infrastructure fund. Available at http://www.statedevelopment.qld.gov.au/infrastructure/infrastructure-planning-and-policy/state-infrastructure-fund.html
Simshauser, P. (2019). On the stability of energy-only markets with government-initiated contracts-for-differences Energies 12, .
| On the stability of energy-only markets with government-initiated contracts-for-differencesCrossref | GoogleScholarGoogle Scholar |
