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Fed and NSW gas agreement looks like a load of hot air

river on fire
Photo: Two years ago Former Greens MP Jeremy Buckingham set the surface of the Condamine River alight to highlight the repercussions of fracking

OXYGEN FILES: While the rest of the world is turning to biogas to meet energy and environmental requirements, Australia is ramping up production of natural gas.

It’s not a great look having the federal and NSW governments sign an energy agreement that will massively increase gas production at the same time bushfires are blazing and calls for greater emissions cuts are getting louder.

One key part of the government deal is a commitment from NSW  to “facilitate investment opportunities to inject an additional 70 petajoules of gas per year into the east coast market”.

We note this pre-empts the outcome of a NSW Productivity Plan consultation. The paper, released in November 2019 and titled Kickstarting the Productivity Conversation, was supposed to be just the start of the inquiry process.

The gas deal has multiple flaws, not least ignoring options for fast-tracked reductions in domestic fossil fuel gas demand and alternatives to the gas-fired generation projects shortlisted by the federal government as part of its Underwriting New Generation Investments program.

Why biogas is better

Biogas has demonstrated capabilities for providing local electricity generation and gas for industrial purposes. In more forward-looking parts of the world such as Denmark, it is also being used for district heating and cooling, and precinct electricity generation.

While there are multiple biogas feedstocks available in Australia, a report found it is still only a fraction of our overall energy mix.

Pangolin Associates Director Dr David Ross, who has a background in chemical engineering and greenhouse gas accounting, tells The Fifth Estate that biogas has lower emissions than coal seam gas (CSG) or other fossil fuel gas sources.

The emissions’ footprint of CSG includes methane fugitive emissions  – a more potent greenhouse gas in terms of its warming potential than carbon dioxide.

By contrast, biogas processes uses waste products that would otherwise generate emissions.

Ross points out that facilities such as piggeries and landfills, for example, have a verified emissions reduction method under Australia’s emissions reduction fund precisely because they otherwise add to our national emissions footprint.

Already there are multiple landfill gas capture and use projects around the country, as well as biogas generation operations at many sugar mills utilising cane waste to power processing plants, and biogas capture and use at several wastewater treatment plants.

There is a massive opportunity to increase deployment across wastewater treatment plants and landfills, and to expand the use of organic waste streams such as almond husks, wood waste and rice husks, Ross says.

Chemically, raw biogas is generally higher in carbon dioxide and other compounds aside from the combustible methane, than CSG, he says. This means without further processing in many cases it is not suitable for supplying into the conventional piped gas supply.

However, the Australian Renewable Energy Agency (ARENA) has been advocating this more advanced processing to enable biogas to be added to conventional gas supply.

“The renewable gas offers a secure and dispatchable source of energy, and once upgraded to biomethane could help to replace natural gas in our daily lives,” ARENA noted in a blog post last year.

“Biogas also presents an opportunity for local and regional economies to derive from a new source of income from waste products that are already being processed.”

According to ARENA, globally, bioenergy was the source of half of all renewable energy used in 2017 and the International Energy Agency’s report, Renewables 2018, flags it as the “overlooked giant within renewable energy”.

It’s not only green, but it’s also cost-competitive. ARENA pointed to a report for the International Renewable Energy Agency, Renewable Power Generation Costs in 2017, that showed the cost of electricity from biomass is equal to that from onshore wind projects.

(Biomass and biogas are derived from organic matter but are in different forms).

Even without further processing to make it equal to fossil fuel gas in the distribution systems, Ross says small, localised generation could displace a share of current industrial and commercial demand.

Also, as recent power supply issues in the National Grid due to storms and fires showed, decentralised, distributed and small-scale biogas electricity generation could contribute to resilience and support integration of renewables by supplying power during the peak demand period after sundown. 

A stronger focus on distributed energy would be valuable and more akin to energy generation and distribution models in Europe.

Ross says one of advantages of biogas electricity generation has from a technical perspective is many generators feature rotating inertial load, so they can effectively store energy for deployment when needed. This ticks off the aim to increase dispatchable supplies for grid supply stability in a high penetration of wind and solar scenario.

Biogas can also be stored and is produced around the clock by many sources such as sewerage treatment ponds, landfills and animal effluent storages.

On the micro-scale, there are technologies for biogas production that can work at the household or smallholder scale, such as ATEC’s Biodigester technology. Developed by Australian engineers, it is finding a market in parts of South East Asia for its small plants that use animal manure or human manure to produce gas for cooking and fertiliser.

ReCarbon, a Silicon Valley tech start-up, developed technology that converts waste-generated gas, such as landfill gas, into both synthetic gas and fuel cell grade hydrogen. It recently closed a US$7 million (A$10.4 million) funding deal to enable expansion. Projects are already underway in Asia and the US and are being developed in Australia and Canada.

Hunter Water, AECOM and the Institute for Sustainable Futures are currently looking at approaches to managing the water authority’s biosolids waste to generate renewable energy. Initial findings include a sound business case – it would be cheaper than the current biosolids management processes, and also help Hunter Water reach carbon neutrality.

Biogas is effectively a closed-loop technology, Ross says. In some parts of the world biogas production using agricultural or lignin waste produces both gas for fuel and biochar that can be added to soil. Biochar improves plant health, sequesters carbon and reduces the need for industrial inputs while increasing soil’s water-holding capacity.

Connecting the dots

Ross says shifting residential energy demand towards 100 per cent electrification would free up more supply for industrial and commercial users that will be gas-reliant for some time to come.

Data from the AEMO 2019 Gas Statement of Opportunities shows demand for gas on the east coast is roughly one-third domestic (within Australia] and two-thirds export.

The domestic demand comprises 44 per cent industrial use, 33 per cent residential/commercial and 23 per cent gas—powered generation.

So, shifting to all-electric residential, increasing commercial building electrification or biogas use, and swapping biogas into gas-fired generation would liberate more than enough existing production to meet industrial demand without any further increase in gas extraction.

The hot new trend is all electric

We are seeing all-electric energy efficient homes and precincts more frequently here at The Fifth Estate, with whole estates in NSW, Victoria and the ACT now being designed and delivered without gas infrastructure.

The relative costs of using gas for cooking, hot water and heating have also shifted in favour of all-electric homes, as Renew (formerly the Alternative Technology Association] showed in their two reports on comparative costs.

Ross notes that new technologies such as electric heat pump hot water and induction cooktops have contributed to the financial case for ditching fossil fuel gas and switching on solar PV and energy-efficient fixed appliances. Add an EV and battery storage as Ross has at his own home, and a household can become net zero emissions and have energy independence.

Short-termism vs rapid emissions reduction

Increased energy efficiency measures across commercial and industrial sectors would also reduce demand for both gas and electricity. In his audits, Ross says he sees a lot of gas-derived energy wasted by industrial gas users.

“I see megawatts of waste heat [recovery and use] opportunities,” he says.

There also needs to be a shift in thinking at the company level. Ross says many initiatives to use waste heat, improve energy efficiency or deploy low-emissions technologies have a three to five year payback, so are not taken up, as many businesses have a “hurdle rate” of 12 months to two years for payback.

He questions how these decision-makers will feel in years to come when their grandchildren point out they ruined the global environment “for the sake of a few years” of payback on investment.

“We are all going to learn the cost of climate change. Things that don’t go through because they don’t have a six to 12-month payback, that’s the saddest thing.”

A useful role for government

One of the issues that needs to be addressed is the roadblocks that exist to connecting biogas to the wider energy system. Ross says costs are extremely high in some areas to connect the gas to the energy network.

As a result, in many places landfill gas is simply flared rather than being used.

Biogas Opportunities for Australia, an ARENA report by ENEA Consulting developed in partnership with Bioenergy Australia, CEFC, Energy Networks Australia and IEA Bioenergy, found that of the 242 biogas plants operating across Australia in 2017, roughly half of the gas captured was flared rather than used as an energy source.

Ross says biogas and biogas generation encounters multiple and different rules and regulations in every jurisdiction and within each local network.

This is where government assistance to simplify things could be valuable.

Another piece in the puzzle is “pricing pollution properly,” Ross says. No carbon price “changes the measure” of the positives of biogas.

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