Renewable Gas Target: Delivering lower cost decarbonisation for gas customers and the Australian economy

ACIL Allen was engaged by the Australian Pipelines and Gas Association Ltd (APGA) and Energy Networks Australia (ENA) to model the economic effects of a national Renewable Gas Target (RGT).

An RGT is a policy to support the progressive replacement of natural gas with renewable gases, principally green hydrogen and biomethane. It would work in a similar way to the national Renewable Energy Target (RET) which supports investment in renewable electricity generation, and so an RGT would support investment in the renewable gas industry and allow it to mature and support the decarbonisation of Australian gas users.

To analyse the effects of an RGT we developed a Gas Transition Model (GTM) to provide insights into potential cost pathways to decarbonise Australia’s existing gas using sectors. The model uses a large-scale linear program to identify the lowest cost way of achieving specified abatement objectives, while continuing to satisfy the underlying energy demand from today’s gas using sectors.