Gas powered generation can play a significant role in a net zero future by supporting the growing levels of renewable generation, the report says.
The report for the Australian Pipelines and Gas Association finds that gas-powered generation can provide support when renewable generation is not available at lower cost than alternatives.
Further, connected to the gas pipeline network it can provide electricity from long term storage over periods of weeks and months, much longer than batteries and pumped hydro can provide.
This makes gas-powered generation particularly well-suited to managing energy requirements during sustained periods of low renewable generation, either due to seasonal weather patterns or prolonged renewable droughts, says the report.
The report is based on the assumption that gas-powered generation will operate much as it operates today, while renewable technologies will continue to fall in cost, but without taking account of changes such as the incorporation of hydrogen and biomethane.
With this assumption the modelling shows that total resource costs can be reduced by as much as 36% when gas-powered generation is used to support a high renewable electricity system.
“Gas-powered generation is uniquely placed to support as it provides all the flexibility, security and reliability needed in a single system which helps keep costs down,” says APGA CEO, Steve Davies.
“Gas powered generation that is connected to the gas pipeline network can allow very high renewable electricity systems to function reliably at much lower cost than they would otherwise.”
Such a saving would amount to Au$7.5 billion (US$5.7 billion) annually and emission reductions could drop at least 95% below current levels.
The study found the best value combination to be 93% renewables and 7% gas.
A challenge faced in Australia is that solar and wind generation, which are the main sources of renewables, tend to occur at the same time within regions and even between regions in the National Electricity Market. This means that when solar or wind generation is not producing much energy in one region, it also tends not to be producing much energy in other regions.
Furthermore, projections show that renewable droughts can last from days in the case of solar to months in the case of wind. Thus in high variable renewable scenarios, additional generation or storage capacity is required to maintain supply during those periods.
The report was prepared by the consultants Frontier Economics.