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Extending the national gas regulatory framework to hydrogen blends and renewable gases

Publication date

(Page originally published: 19 October 2021)

On 20 August 2021, Energy Ministers agreed to reform the national gas regulatory framework.

These reforms will bring hydrogen blends, biomethane and other renewable gases within the scope of the national gas regulatory framework. The reforms will focus on gases and blends that can be used in existing natural gas appliances and consider any required changes to the National Gas Law, National Energy Retail Law and subordinate instruments.

The reforms aim to provide regulatory certainty to support investment in innovative projects that will reduce emissions in our gas networks. The reforms will also ensure existing regulatory provisions and consumer protections will work as intended when hydrogen blends and renewable gases are supplied in the gas network.

Energy Ministers agreed to accelerate this reform process to meet the needs of a transitioning energy market. A draft legislative package is to be presented to Ministers for approval by mid-2022, and draft rules in the second half of 2022.

Consultation

Current consultation: March – May 2022

Consultation on all three work streams opened on 31 March 2022.

Officials’ consultation paper and draft Bill

Jurisdictional officials’ are seeking feedback on the draft regulatory package which includes:

  • An Officials’ consultation paper on amendments to the National Gas Law (NGL), the National Energy Retail Law (NERL) and Regulations.
  • The consultation draft National Energy Laws Amendment (Other Gases) Bill 2022 to amend the National Gas Law (NGL), National Gas Regulations (NGR), National Energy Retail Law (NERL) and National Energy Retail Regulations (NERR). The draft Bill was released for consultation on 6 April 2022.
  • Update (16 May 2022): To assist stakeholders in providing feedback on the Officials’ consultation paper, Officials have released a Q&A document responding to questions asked by stakeholders during consultation to date.

Officials have also received advice from the AEMC on potential changes to the NGL, and the AER on potential changes to the pipeline related ring-fencing and associate contract arrangements. Officials are also seeking feedback on these proposed changes.

Responses can be submitted using this feedback template and are due by 5:00 PM AEST on 19 May 2022 to renewablegas@industry.gov.au. Please note this has been extended from the original date of 12 May 2022.

Update: On 22 April 2022, Energy Ministers released an information paper providing a high-level overview of how recently agreed amendments to the gas pipeline regulatory framework will operate, and the transitional arrangements that will apply to the new framework. Stakeholders should consider these related reforms, when developing their consultation submissions.

AEMC paper

The AEMC released a draft report for consultation on amendments to the National Gas Rules (NGR) and the National Energy Retail Rules (NERR).

Submissions to this draft report can be made via the AEMC’s website and are due by 5:00 PM AEST on 19 May 2022.

AEMO paper

The AEMO released a draft report for consultation on amendments to the Procedures and other AEMO-made instruments required for settlement and metering in the facilitated and regulated retail gas markets.

Submissions to this draft report can be made via the AEMO’s website and are due 5:00 PM AEST on 19 May 2022.

Stakeholder information and consultation sessions

A stakeholder information session was held on 1 April 2022 at 1:00 PM AEDT to provide stakeholders with an opportunity to hear from each of the three work streams.

Officials’ also held a more in-depth stakeholder forum with a Q&A session on 12 April 2022 at 1:00 PM AEST. To discuss further, you can contact renewablegas@industry.gov.au.

Initial consultation: October – December 2021

Consultation has now closed on initial papers from the three work streams.

Officials’ paper 

Responses to the officials' paper on amendments to the National Gas Law (NGL), the National Energy Retail Law (NERL) and Regulations were accepted until 26 November 2021 (accessible version). The following submissions were received:

AGL Energy
APA
APGA
ATCO
AusNet Services
Australian Energy Council
Australian Gas Infrastructure Group
Australian Hydrogen Council
Bioenergy Australia
EnergyAustralia

Energy Networks Australia
ENGIE Australia & New Zealand (Document 1) ENGIE Australia & New Zealand (Document 2)
Evoenergy
Fortescue Future Industries (AEMC’s website under ‘Documentation – Initiation’)
Gas Appliance Manufacturers Association of Australia
Jemena
Origin
Public Interest Advocacy Centre
Shell Energy

AEMC paper

Responses to the AEMC’s paper on amendments to the National Gas Rules (NGR) and the National Energy Retail Rules (NERR) were accepted until 2 December 2021. The AEMC have published submissions received in response to their consultation paper.

The AEMC held workshops on specific topics related to their work on these reforms in December 2021. Further details can be found on the AEMC website.

AEMO paper

Responses to the AEMO’s paper on amendments to the Procedures and other AEMO-made instruments required for settlement and metering in the facilitated and regulated retail gas markets were accepted until 2 December 2021.

Stakeholder forum

A forum was held on 22 October 2021 to provide stakeholders with an opportunity to hear from each of the three work streams and participate in a Q&A session.

To discuss further, you can contact renewablegas@industry.gov.au.

Timeframes

21 October 2021: Initial consultation papers published

22 October 2021: Stakeholder forum

26 November 2021: Responses to the Officials’ consultation paper due

2 December 2021: Responses to the AEMC’s and the AEMO’s consultation papers due

13 December 2021: AEMC stakeholder workshop on consumer protections and regulated retail markets

14 December 2021: AEMC stakeholder workshop on facilitated markets (DWGM and STTM)

15 December 2021: AEMC stakeholder workshop on economic regulation, transparency mechanisms, regulatory sandbox

31 March 2022: Officials’ consultation paper and draft regulatory package published. The AEMC and AEMO also published draft consultation papers

1 April 2022: Stakeholder information session

Late March – May 2022: Consultation on draft reports and draft legislative amendments

19 May 2022: Responses to the Officials’ consultation paper and draft regulatory package due

Mid 2022: Draft legislative amendments presented to Energy Ministers for agreement

Late 2022: Consultation on proposed initial Rules, Procedures and other subordinate instruments

By 2023: New measures are intended to take effect subject to agreement by Energy Ministers and subsequent passage through the South Australian Parliament

What are hydrogen blends and renewable gases?

Biomethane and other synthetic methane products can be processed to have the same specifications as natural gas, with net zero emissions. After this processing, they can be used safely in existing gas infrastructure and current appliances.

Hydrogen has different properties to natural gas. It can be made suitable for injection into the gas network by blending it with other suitable gases. Work completed under the National Hydrogen Strategy found that blends of around 10% hydrogen could be used in most existing appliances.

It will take time before existing infrastructure and appliances can safely handle 100% hydrogen gas supply. Where possible, the reforms will be ‘future proofed’ so when other gases such as higher percentage blends of hydrogen can be safely injected into the network, the regulatory framework will allow for these to be supplied.

Work streams

Under the accelerated approach, Ministers have agreed to task:

  1. Jurisdictional officials to lead work to identify and develop amendments to the National Gas Law (NGL), the National Energy Retail Law (NERL) and Regulations.
  2. The Australian Energy Market Commission (AEMC) to lead work to identify and develop amendments to the National Gas Rules (NGR) and the National Energy Retail Rules (NERR). Further details on the AEMC’s process can be found on their website.
  3. The Australian Energy Market Operator (AEMO) to lead work to amend the Procedures and other AEMO-made instruments required for settlement and metering in the facilitated and regulated retail gas markets. Further details on the AEMO’s process can be found on their website.

Further details on the reform process can be found in this information sheet and infographic.

Read more

Information sheet: Extending the national gas regulatory framework to hydrogen blends and renewable gases

Infographic: NG equivalents in the natural gas supply chain

Australia's National Hydrogen Strategy

Australian Energy Market Commission (AEMC) 

Australian Energy Market Operator (AEMO)

Australian Energy Regulator (AER)

Energy Consumers Australia

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