Natural gas is an important energy source for Queensland homes and businesses. But as the world targets net zero emissions, the energy mix is evolving – and so is the role that natural gas will play in it. 

What is natural gas? 

Natural gas is a fossil fuel formed from the layered remains of plants and animals that are gradually buried by sand, sediment and rocks. 

As these remains decompose and are exposed to immense heat and pressure under the surface of the Earth over the course of millions of years, their molecules break down, and the energy stored in their cells produces a naturally occurring hydrocarbon gas mixture. This mixture is mostly made up of methane, but can also include carbon dioxide, nitrogen, hydrogen sulphide and helium.

You might have heard of ‘conventional’ and ‘unconventional’ gas, but in reality, it’s all the same gas – it’s only the extraction methods that are different.

Conventional gas is extracted from porous and permeable sandstone rock formations. This gas will flow freely from rock formations that have been tapped by a drilled well. 

Since the 1990s, unconventional gas has become more common. This is gas that’s found in complex geological formations, requiring extra steps to extract. Unconventional gas is categorised by the type of rock it’s extracted from. 

Coal seam gas is found in coal seams, hundreds of metres below the Earth’s surface. It’s typically held in place by rock and groundwater that has to be removed to access the gas. 

Shale gas is extracted from fine-grained sedimentary rocks, usually located between 1000 and 2000 metres underground. These rocks are of low permeability, but advances in drilling technology have made it somewhat more practical and economical to extract gas from them.

Then there’s tight gas, found in sandstone or limestone rocks of low permeability more than 1000 metres below the ground. 

While shale gas and tight gas reserves have been identified in Queensland, the vast majority of Queensland’s gas supply is coal seam gas, sourced from the Surat and Bowen basins. 

Once gas has been extracted and processed, it’s stored in tanks ready for transmission and distribution. It’s both colourless and odourless – the unmistakable smell of ‘gas’ is actually added artificially, so you don’t forget to turn it off.

Gas that’s intended to be exported is converted into liquefied natural gas (LNG) – a process that involves cooling the gas to −273.15 °C, reducing its volume so that it can be more easily transported around the world.

Gas produced for domestic consumption is sent through high pressure transmission pipelines to ‘city gates’ – points where the transmission pipelines connect with networks of low pressure gas distribution pipelines that take gas to homes and businesses.

Once the gas reaches you, it’s ready for use – most commonly for cooking, whether in the kitchen or on the BBQ; water heating; and to run appliances such as fireplaces and outdoor heaters.

Transmission pipelines also deliver natural gas directly to large industrial users, who use it as a fuel for a variety of mining and manufacturing processes, including smelting and refining metals. Natural gas is also key to the production of fertiliser, and used to produce a wide range of industrial products, including plastics, polymers and textiles. 

And of course, transmission pipelines also deliver natural gas to electricity generators, who use it to power gas turbines.

There are two main types of gas turbine power stations – open cycle plants and combined cycle plants – that use natural gas to generate electricity. 

In an open cycle gas-fired power plant, gas combusts and expands through a gas turbine. Essentially, the hot pressurised gas spins the blades of the turbine, which is connected to a generator – when the turbine blades rotate, it causes magnets to spin inside the generator, forcing electrons to move through wires, creating an electrical current.

A combined cycle gas-fired power plant does the same thing, but also uses the ‘waste heat’ generated by this process to boil water and produce steam that drives a second turbine. This makes them more efficient than open cycle plants, generating about 50 per cent more electricity.

What role does gas play in Queensland’s electricity market? 

Queensland’s electricity system primarily consists of dispatchable generation. This is electricity generation that can be scheduled on or off, and increased or decreased on command, to ensure supply always meets demand. 

Dispatchable generators are classified as either baseload units or peaking plants. In Australia, baseload units are typically coal-fired generators. They run continuously throughout the year, except during maintenance outages, and provide the majority of power in the electricity grid.

But although these coal-fired generators are capable of ramping their production up and down, they tend to move relatively slowly, and they can’t operate below certain minimum output levels. 

Peaking plants, on the other hand, produce little or no energy during periods of average demand, but can ramp up to full power within minutes during periods of peak demand. 

These peaking plants are usually gas-fired generators, which can start up and respond far more rapidly than coal-fired generators. They’re more expensive to operate than coal-fired generators, which is why they typically only run for a few hours at a time, when demand for energy from the grid is at its highest. 

In a nutshell, gas-fired generators are flexible and dynamic plants that exist to fill the gap between supply from coal-fired generators and demand from consumers. 

What role will gas play in Queensland’s renewable future? 

The Queensland Energy and Jobs Plan (QEJP) outlines the state’s pathway to the clean, reliable and affordable energy system of the future, in which the majority of the electricity used in Queensland will come from renewable energy sources. 

This means that solar and wind generation will come to make up a much larger proportion of the energy in the grid. But whereas the baseload and peaking plants described above provide dispatchable generation, solar and wind generators provide variable, or intermittent, generation. 

These variable generators will play a crucial role in reducing emissions. But because their output is dependent on the weather, they provide neither the consistent, ‘always on’ supply of coal-fired generators, or the dynamic, on-demand capability of gas-fired generators. 

For supply to continue to closely match demand, then, there’s a need for firming capacity – a flexible supply of energy that can be quickly switched on to support variable renewable generation as wind and solar output changes, or when there’s a sudden increase in demand.

This firming capacity is expected to take several forms, including gas. Based on demand forecasts and energy market modelling at the time the QEJP was released in 2022, it’s expected that Queensland will need up to 3,000 megawatts (MW) of new low-to-zero gas-fuelled generation, in addition to the existing 1745 MW of capacity from gas turbines that are already installed. 

Although gas-fuelled generators have high running costs, the capital cost of gas-fired generation – i.e. the amount it costs to install the generation in the first place – is relatively low. That’s why, when used strategically, gas-fired generation is considered the lowest capital cost per megawatt way to provide backup and peaking generation for a highly renewable system. 

Natural gas also burns the cleanest of all fossil fuels, with gas-fired power generation producing about half the emissions of an equivalent amount of coal-fired power. But don’t let the word ‘natural’ fool you – it’s still a non-renewable energy source, and though it can be efficiently burned, it still contributes to climate change. 

That’s why it’s expected that Queensland may convert existing gas turbines and install new gas turbines that can be fuelled by renewable hydrogen, or a renewable hydrogen blend, to reduce emissions further. 

Hydrogen is a versatile energy carrier that can be used to power almost anything, including heavy vehicles, refineries and other industrial facilities. Hydrogen can also be used to supplement and replace natural gas in domestic gas networks.

Fossil fuels are currently the primary source of hydrogen production, which results in significant greenhouse gas emissions. 

But hydrogen can be produced without emitting any greenhouse gases. This is done through a process called electrolysis, in which a device called an electrolyser is used to apply electricity to purified water, and split it into its constituent elements – hydrogen and oxygen. The hydrogen is then collected and the oxygen is allowed to harmlessly enter into the atmosphere. 

When the energy that powers these electrolysers comes from renewable sources – such as wind or solar power – then there are no carbon emissions required to produce the hydrogen, and it can be classified as renewable hydrogen.

A hydrogen-ready, natural gas power station is currently being developed at Kogan Creek, approximately 260 kilometres west of Brisbane. 

There are more than 50 renewable hydrogen projects across the state, including the Central Queensland Hydrogen (CQ-H2) Project in the Gladstone region, which could produce up to 800 tonnes per day of clean, renewable hydrogen by the early 2030s. 

And in October 2023, the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023 was passed. The Bill applies the existing safety frameworks for gas pipelines in Queensland to hydrogen and other renewable gases – an important first step in facilitating further progress in renewable hydrogen development.

It all adds up to mean that gas-fired generators will continue to play an important role in Queensland’s energy system – now, and into the future.