On the electrification of gas loads in Australia's national electricity market

Decarbonising our power systems requires coal plant exit with replacement by intermittent renewables, along with a diversified fleet of flexible firming plant. It also requires electrification of the gas market. In Australia's National Electricity Market, certain jurisdictions have sought to pursue (1) power system decarbonisation, and (2) electrification of gas loads, simultaneously. Using 40 years of weather re-analysis, we identify the generation plant investment task – which is very material. Slowing rates of renewable plant entry while simultaneously accelerating electrification may have the unintended effect of entrenching coal plant for longer. Further, a large fleet of gas turbines will be required to deal with intermittency - especially during winter months. Electrification of gas customers reduces annual gas demand, but ironically, gas turbine output on critical event days means there is little change in daily maximum gas demand. This is quite a paradox – electrification policy signals the structural decline of gas networks, yet gas turbines, gas storage and pipeline infrastructure become critical to maintain security of electricity supply. Careful investment planning and the sequencing of policy is therefore required.