AGIG, APA, Jemena and AusNet Service have made submissions to the Victorian government as the state charts out its Gas Roadmap, which aims to guide investment and planning as Victoria looks to reduce emissions by 50% by 2030, and reach net-zero by 2050.
Victoria has both the highest gas demand and largest infrastructure network in the country, which is primarily used for residential and commercial heating.
An interim report released by Infrastructure Victoria last month said reducing overall gas demand by investing in energy efficiency measures and electrification would help reduce emissions and create reserve supplies for critical industrial purposes and firming gas-powered generation.
It warned against expanding existing gas networks to new residential and commercial developments, saying it could potentially lock-in future emissions and could create underused or stranded assets.
However the gas companies said the Victorian government should introduce gas grid decarbonisation targets, noting renewable-based electrification would not be able to supply the amount of energy needed to meet projected demand.
AGIG CEO Ben Wilson says attention should be focussed on investing in renewable gases like biogas, which would help the state reduce emissions and retain the use of Victoria's extensive gas network, therefore saving costs.
"Importantly, renewable gas will allow our customers to continue to enjoy the benefits of gas into the future while meeting their sustainability goals and to do so at lower cost than full electrification," Wilson said.
"By getting the foundations right, Victoria can build a thriving hydrogen industry which provides carbon-free gas to residential through to industrial customers in the state, along with other complementary markets such as transport."
The submission argues against preventing new gas connections and associated infrastructure, describing it as "heavy-handed".
It instead argued that the government should introduce binding targets for the decarbonisation of gas supply, with a 10% in volume renewable gas target by 2030. It also suggests that this could take the form of a contract-for-difference broadly based on the Victorian Renewable Energy Target design.
Industry is promoting hydrogen to help decarbonise gas infrastructure, however blending trials have only managed to achieve around 20% blending before embrittlement occurs and gas-run equipment starts to become a safety risk.
To cover this, AGIG argued that the Victorian government should introduce a hydrogen-ready appliance mandate for 2025 to provide investment certainty and stimulate action to reduce risk borne by appliance manufacturers.
Jemena's managing director Frank Tudor argued that a renewable gas target would help kickstart a biogas and hydrogen sector.
"The Renewable Energy Target proved crucial in driving down the cost of renewable electricity generation technologies such as solar power and wind power," Tudor said.
"A renewable gas target will provide the same role in the gas sector and would help to make hydrogen at A$2 per kilogram - as outlined in the National Hydrogen Strategy - a reality sooner."
Both Jemena and AGIG are trialling hydrogen and renewable gas projects in NSW and South Australia respectively.
The joint statement said AusNet, AGIG, APA and Jemena are already collectively investing $130 million in projects designed for the application of renewable gases such as hydrogen and biomethane.
Infrastructure Victoria is receiving public feedback which will help shape the final report released later this year.
