In fact, more than 60 per cent of Victoria’s total gas consumption goes to heating and hot water in homes and businesses — for the rest of Australia, residential and business use averages 36 per cent of total demand.
But that’s where our region is a bit different. Across the LGAs of Greater Shepparton, Moira and Campaspe, 32 industrial customers — 0.07 per cent of total users — account for 70 per cent of all the gas consumed in the region.
And while our region makes up around three per cent of Victoria’s total gas use, we represent nearly eight per cent of Victoria’s industrial gas use.
Victoria’s reliance on gas is no surprise — for many years we enjoyed access to Gippsland’s abundant and relatively cheap gas resources.
This changed in 2015 when the decision was made to allow gas liquefied natural gas exports from Queensland, which linked Australia’s gas prices to international markets.
It also coincided with what the Australian Energy Market Operator describes as Victoria’s “declining peak day capabilities due to legacy field depletion”.
In more recent years, gas prices have increased as nations shift away from fossil fuels and call on gas to smooth the lumpiness of the transition.
This is great for Australia’s gas exporters — but not so great for Australian consumers, and especially for “a temperature-sensitive southern market” (according to AEMO).
Given Victoria’s exposure to gas markets, it’s no surprise it’s a priority for the Victorian Government.
The government has been focusing its efforts on residential and business programs and incentives to encourage electrification — but there’s a catch. Our reliance on gas means we also have one of the most extensive gas transmission and distribution networks.
In fact, Victoria is home to more than 60 per cent of Australia’s gas distribution network.
Reducing use of the network without reducing the infrastructure means the ongoing costs are carried by a smaller number of remaining users. (There’s more than a few parallels with our irrigation networks!)
Finding solutions for residential and business customers is important, but in our region, finding answers that maintain and even improve the competitiveness for our regional manufacturers is urgent and critical — for these businesses, and for the $5.5 billion of economic activity they generate every year, the 6200 locals they employ and the $500 million of wages they inject into the local economy.
This is where the conversations and possible solutions for energy generation, storage and distribution are many, varied and need to progress at speed and all at once.
The options for our food processors will be different to the high heat solutions needed by our steel fabricators and foundries.
The onsite options for a new plant will be very different to a site that’s been in operation for more than a century.
It’s also why energy transition needs to be an ‘and’ not an ‘or’ conversation — generation and transmission and storage, electrification and gas alternatives such as biogas.
With so much happening there is often a desire to masterplan or to get lost in the weeds — trying to pick energy generation winners while overlooking local transmission, distribution and storage constraints, or assuming our manufacturers have the same kit, capital and site capacity.
As a region we need to comfortable in the chaos — and we need to be confident in speaking to the scale, importance and positive future that’s possible for our regional manufacturing and value-adding sectors if we get the transition right.
Linda Nieuwenhuizen is the Committee for Greater Shepparton chief executive.
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