Understanding the implications of a Renewable Gas Target for Australia’s gas networks: Deep Dive Report

This report considers ways in which renewable gases might be supported in Australia’s energy mix and in particular the role for and nature of a Renewable Gas Target (RGT). Australia is in transition to a zero-emissions energy supply. Renewable electricity has a major part to play in this transition but there is also a role for renewable gas. The optimal structure of a low-cost, secure, zero-emissions energy supply remains unclear, and it depends on the costs of renewable gases vis a vis electricity. The adoption of renewable gases into the energy mix is at an early stage and substantial reductions in their costs can be anticipated. However, there will need to be an increased adoption of renewable gases if these cost reductions are to be achieved. This Report presents learnings and conclusions from a deep dive on evidence and experience with RGT-type mechanisms. It reviews current developments in the policy environment for renewable gas in Australia and overseas. It considers the learnings from Australia’s Renewable Energy Target in the electricity sector and other historic schemes targeting reductions in energy emissions. It reports the results of stakeholder consultations. And it considers issues around the design of a RGT from an economics perspective and sets out some possible configurations of an RGT.