13 Oct 2021

Investment needed in natural gas during transition to renewables - report

10:41 am on 13 October 2021

The country needs to invest tens of millions of dollars to ensure sufficient natural gas to help with the move to 100 percent renewable energy by 2030.

A government-commissioned report by the Gas Industry Company says the industry will need certainty in order to make the capital investment necessary to keep the industry going for the next decade or so.

"There is a real risk that not enough gas will be able to be delivered to major gas users, including electricity generators, during the transition out to 2030 and beyond," the report says, adding that the situation was manageable with investment.

"With industry coordination, and continued investment and good risk management across the energy sector, gas supply should be able to be managed to meet demand in the short to medium term."

Gas Industry Company chief executive Andrew Knight said there were enough natural gas resources currently available to cover the transition to 100 percent renewable energy without the need for offshore exploration.

"We need continual investment to make sure those resources are developed," he said, adding the investment would be in the order of a couple hundred million dollars a year on average, over an eight-year period.

"And the industry would like to understand that customers are going to be there, customers would like to understand they've got secure supply.

"So those relationships all need to be put in place, well in advance, alongside the relationships required to ensure that gas will also be made available for electricity generation when there's a dry year."

Knight said the findings of the report would fit into a national energy strategy - setting out a clear strategy on how natural gas fits in to the transition to 100 percent renewable energy.

"We think gas has a crucial role to play during the transition to help ensure that smooth transition."

He said the window of opportunity to ensure sufficient investment was now.

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