The Australian Energy Market Commission (AEMC) has recommended to Energy Ministers that changes be made to the national gas and retail regulatory frameworks to enable the natural gas sector to use hydrogen and renewable gas to support Australia’s emissions reduction plans.
The recommendations in the final report and accompanying proposed draft rules published by the AEMC are critical steps toward the development of a national hydrogen and renewable gas industry.
The AEMC’s recommendations pave the way for setting up national regulatory frameworks so that hydrogen blends and renewable gases can be safely supplied through the existing distribution systems to appliances in homes and businesses.
AEMC Chair Anna Collyer said improvements to the regulatory framework will lay the foundations for the development of a decarbonised gas sector and keep Australia firmly at the forefront of reform in the hydrogen industry.
“From our perspective at the AEMC, hydrogen is fascinating because of the way it uniquely intersects with both gas and electricity markets. It’s a future source of renewable fuel, but it’s also set to become the largest industrial customer for electricity in the NEM’s history.
"We can’t know exactly what shape a net zero power system will take, but we can define the problems we need to solve to get there and create space for innovation to find the solutions.
That’s what this work does. Hydrogen has the potential to deliver solutions we need for a net zero future, and by extending the regulatory frameworks, we allow participants to develop their business and facilitate innovation,” Ms Collyer said.
The AEMC’s work not only offers certainty to market participants and investors but provides clarity around access to pipelines, as well as supports well-informed decision-making by market participants and consumers.
The AEMC’s final recommendations also aim to enable the safe supply of low-level blended gases and consumer protections including billing and pricing.
As well as outlining recommendations for an efficient, safe and secure framework, the final report also sets out recommended draft rule changes for the National Gas Rules and National Energy Retail Rules. These accompanying draft rules are intended to operationalise the policy recommendations.
Written submissions on the recommended draft rules are open until Thursday 13 October 2022.
The final initial rules will be provided to Energy Ministers in November 2022.
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