The future of gas in Australia: moving from a transition fuel to a residual fuel 28 April 2022

By Victoria Townsend

On Wednesday 27 April, the Grattan Institute hosted a panel discussion on the changing role of gas in Australia’s economy, “What is the future for gas in Australia?” The event brought together experts from across different domains, including Alison Reeve, Deputy Program Director, Energy and Climate at the Grattan Institute; Andrew Turley, Manager - Integrated Energy Systems at the Australian Energy Market Operator, and Ralph Griffiths, Executive Director, Energy Strategy Division at the Victorian Department of Environment, Land, Water, and Planning, and was moderated by the Grattan Institute’s Energy Program Director Tony Wood.

The event sparked debate over the approach Australia should take to gas which has been an integral part of Australia's energy landscape for several decades. The speakers addressed the key issues for consideration by policymakers and businesses, to avoid making decisions that will lock in exposure to volatile gas prices and make Australia’s pathway to net zero more challenging.

The panellists’ short answer to the question – what is the future for gas in Australia? – was that gas should be used as a last resort, and eventually phased out completely. Panellists agreed that encouraging electrification and energy efficiency could decrease reliance on gas. This could unlock multiple benefits, including lowering household and business energy bills and reserving natural gas for industrial uses that are currently difficult to decarbonise.

The panellists’ policy suggestions included tweaking existing energy efficiency schemes to reward energy users for moving from gas to electricity and ensuring the emissions safeguard mechanism drives efficiency in gas-fired processes. The role of hydrogen as a replacement for gas was discussed, but electrification appears to offer a more readily available, cost-effective path to decarbonisation in many situations.

The role of gas in Australia’s pathway to net zero will continue to be a fraught topic, but one thing on which the panellists agreed is that gas is not a "transition" fuel, but rather a "residual" fuel. A guide published by the Energy Efficiency Council, Ai Group and the Clean Energy Finance Corporation highlights the opportunities for energy efficiency and electrification of gas in manufacturing processes and the ways that industry can avoid being locked into an expensive fuel source. The guide can be accessed at

Victoria Townsend is a Senior Project Officer at the Energy Efficiency Council. She has a professional background in finance and business strategy, and currently works to help businesses learn how to take advantage of the opportunities of Australia’s energy transition and net zero transformation. You can connect with Victoria on LinkedIn and follow her on Twitter.

This article first appeared on LinkedIn in April 2022