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Natural Gas

Gas power

Natural gas is an important fuel for electricity generation in Australia, securing supply in the short and medium term future and contributing to lowering greenhouse gas emissions as the nation transitions to a low carbon environment.

Natural gas is predominantly composed of methane, and is estimated to emit as little as 30-50 per cent of the carbon dioxide emitted by coal-fired electricity generation. It uses up to 50 per cent less water than coal-generated electricity.

Most of Australia’s conventional gas resources are located off the north-west coast of Australia and are being developed for LNG export and domestic use. Australia also has significant unconventional gas resources – namely coal seam gas (CSG).

How it works

Gas-fired power generation uses the thermal power generating process to produce electricity. Natural gas is converted into heat/steam, which turns a turbine that is connected to an electrical generator.

The two main types of gas-fired power plants are open-cycle gas turbine plants and (OCGT) and combined-cycle gas turbine (CCGT) plants. CCGT plants are more efficient than OCGT plants because they use the waste heat from the combustion process to generate electricity.

Fuel cells are another power generation technology that converts fuel, such as natural gas and hydrogen, directly into electricity, heat and water. Because fuel cells do not burn fuel in a combustion process but convert fuel to electricity and heat via an electrochemical process, they produce virtually no pollutant emissions.

Gas in the Australian market

According to ABARE, natural gas is the third largest source of Australia’s primary energy consumption after coal and petroleum products. Australia’s primary gas consumption increased from 74 PJ in 1970–71 to 1,249 PJ in 2007–08 – an average rate of growth of 7.9 per cent per year.

Production of CSG has increased significantly in the past seven years with its share of total Australian gas production increasing from 2 per cent in 2002–03 to 9 per cent in 2008–09.

Future prospects

In ABARE’s latest long-term projections, gas consumption in Australia is projected to increase by 3.4 per cent per year to reach 2,575 PJ (2.3 tcf) in 2029–30. Its share of primary energy consumption is projected to rise to 33 per cent in 2029–30, while Australian gas production is projected to increase by 6.7 per cent per year, to reach 8505 PJ (7.7 tcf) in 2029–30.

Gas exports, in the form of liquefied natural gas, are projected to expand even more quickly, by 9.5 per cent per year to reach 5,930 PJ (109 Mt) in 2029–30. Gas has a significant role to play in Australia’s electricity generation today and in the future. It is a readily available fuel, with proven and increasingly efficient technology, and with both base and peak load potential.
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