The Southern Gas Market supply problem: assessing the case for electrification of gas heating

Abstract

The south-eastern Australian states of Victoria, New South Wales, South Australia and Tasmania are facing a Southern Gas Market supply problem with the anticipated decline of the largest gas production facility within the region over the coming 5 years. Multiple supply-side alternatives are currently vying to get support for their solution. During this period, the electricity market is also anticipating continued growth in renewable energy capacity, which could then result in excess renewable energy spillage through periods of the year. This provides a potential opportunity for the integration of a demand-side solution to the Southern Gas Market supply problem through electrification of the gas heating load to soak up the excess renewables. This report investigates the implications of weather on the gas and electricity demand and supply to build the case for electrification of gas heating within Victoria and determines the role of natural gas to support the electricity grid.