the stationary energy lpg industry - our value to australia final dec 14 copy

Gas Energy Australia

The Stationary Energy LPG Industry – Our Value to Australia Building a more secure energy future through increased use of gaseous fuels

Our Mission is

“... improve the nation’s energy security and environment and reduce energy costs by maximising the benefits of gaseous fuels to the community...”

About Us Gas Energy Australia was established on 15 October 2012 – as the national peak body that consolidates the advocacy, policy and technical development and communications profile of the downstream gaseous fuels industry, incorporating Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) - in Australia.

Gas Energy Australia’s goal is to provide a united industry voice to stakeholders (i.e. governments, state authorities and the community) on the use of gaseous fuels in Australia. Gas Energy Australia’s interests incorporate all aspects of the downstream gaseous fuels industry, including producers, refiners, distributors, transporters, retailers, vehicle manufacturers, equipment manufacturers and suppliers, installers, educators and consultants.

The Association is focused on achieving energy security and economic prosperity in a lower carbon economy by advocating the value and benefits of gaseous fuels. Gas Energy Australia’s stakeholder engagement is supported by progressive policy development based on sound research, analysis and expert commentary, the ongoing development of national standards and innovative products and technology, proactive media engagement, and the development of the industry’s specialist workforce.

Our Industry The gaseous fuels industry is extremely diversified and competitive. With its availability and diverse applications, the industry is equipped to immediately contribute to a sustainable energy solution anywhere and anytime.

As an alternative fuel source, gaseous fuel is playing an important role in shaping Australia’s future energy policy and lowering our carbon footprint. Gaseous fuels are a significant contributor to the Australian economy both in exports and providing access to an extremely transportable low carbon energy source for Australians everywhere. With the support of government, industry and consumers, gaseous fuels can play a pivotal role in establishing a more sustainable energy solution for Australia.

2 The Stationary Energy LPG Industry – Our Value to Australia

Our Customers Millions of Australians currently use gaseous fuels every day across hundreds of applications. Our customers enjoy the multiple uses of gas for private, commercial and industrial applications, transportation, farming, power generation, hot water, cooking, space heating and outdoor recreation. Gaseous fuels can be used anywhere and anytime, without large investments in infrastructure.

Our Structure Gas Energy Australia is a not-for-profit organisation governed by a Constitution and Board of Directors who are approved annually by our Advisory Council Members. Industry Task Forces, Advisory Council Working Groups and Technical Committees are established by our members and associates in response to policy and technical development initiatives - supported by a Secretariat based in Canberra.

Building a more secure energy future through increased use of gaseous fuels With greater use of gaseous fuels there are significant flow-on benefits to the Australian economy in terms of reduced greenhouse gas emissions, lower energy costs for households and businesses, lower energy costs for heavy vehicle operators, and greater insulation of the Australian economy against future oil price shocks and growing dependency on fuel imports.


Building a more secure energy future through increased use of gaseous fuels About this report Our Customers Our People

Our Infrastructure Our Cost saving Performance

Our Emissions Saving Performance

Contents

About this report 5

Our Customers 6

Our People 10

Our Infrastructure 11

Our Cost Saving Performance 13

Our Emissions Saving Performance 14


Building a more secure energy future through increased use of gaseous fuels

About this report Our Customers Our People



About This Report Gas Energy Australia (GEA), on behalf of its members and associates, has published this report to outline the value of the stationary energy Liquefied Petroleum Gas (LPG) industry in terms of its:

¾ customers;

¾ people;

¾ infrastructure; and

¾ emissions reductions and cost savings performance. The Association’s Secretariat has worked closely with its members and associates through the Association’s Stationary Energy LPG Task Force to design and conduct a survey of GEA members;; Cootes Transport, Elgas, Kleenheat Gas, Origin and Supagas, to collect the data on which this report is largely based. The Secretariat subsequently collated the results of the member survey and developed this report for publication. Much of the information contained in this report has never before been collated or published. In terms of infrastructure, customers and people, this report covers only data reported by GEA members. It does not cover privately owned cylinders and much of the recreational sector. The true size of the industry i s likely to be significantly larger than the conservative figures represented in this report. The GEA member survey data in this report has been supplemented with research undertaken by the consulting firm pitt&sherry, which compares the cost and greenhouse gas emissions performance of different types of water heaters. This research estimates the emissions abatement associated with LPG in comparison with other water heater energy types such as electric resistance. It has also been supplemented by data contained in the 2013 GEA LPG Supply and Demand Study, which was prepared for the Association by ACIL Allen Consulting. In relation to gas bottle numbers, information in this report refers only to gas bottles held by GEA members and associates and the 4.4 million exchange cylinders known to the Secretariat. Gas bottles privately held (and their value) are not included, the numbers of which are believed to be significant. This report provides a “snapshot” of the value that the GEA members’ stationary energy LPG sector represents to Australia and its people.






Our Customers

Our value statement

“…. Gas Energy Australia stationary energy LPG members supply almost one million customers across the Australian continent”

Figure 1: Number of customers by type

Source: 2014 GEA Member Survey


0

200,000

400,000

600,000

800,000

1,000,000

Households Businesses

We support Australian households and businesses:

¾ Our members supply over 783,000 Australian households

¾ Our members supply over 154,000

Australian businesses

¾ Our members supply almost 940,000 Australian customers (not including recreational and autogas customers)





Figure 2: Number of customers by location


Figure 3: Number of customers by state



0

200,000

400,000

600,000

800,000

1,000,000

Capital cities Regional and remote areas

314,289

5,685

146,851

257,214

61,491

117,056

16,563 18,604

NSW

ACT

Vic

Qld

SA

WA

NT

Tas

We supply customers in capital cities and regional and remote areas:

¾ We supply over 672,000 regional and remote customers

¾ We supply over 265,000 capital

city customers

We support customers in all states:

¾ New South Wales is the largest market with over 314,000 customers

¾ Queensland is the second

largest market with over 257,000 customers

¾ Victoria is the third largest

market with over 146,000 customers





Figure 4: Share of customers by state and type


Figure 5: Share of customers by state and location



84%

58%

81%88%

78% 80% 80% 83%

16%

42%

19%12%

22% 20% 20% 17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NSW ACT Vic Qld SA WA NT Tas

% Households % Businesses

20%

100%

12%

45%

30% 27%

42%37%

80%

0%

88%

55%

70% 73%

58%63%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


% Capital % Regional

We support households and businesses in every state

¾ Queensland has the highest proportion of household customers at 88%

¾ New South Wales and Tasmania

have the next greatest proportion of household customers at 84% and 83% respectively

¾ The Australian Capital Territory

has the highest proportion of business customers at 42%

We support customers living in regional Australia

¾ All states have the majority of their customers living in regional areas

¾ Victoria has the highest proportion

of customers living in regional areas at 88%

¾ New South Wales has the second

highest proportion of customers living in regional areas at 80%





Figure 6: Volume of stationary energy LPG demand by state (kilotonnes)

Source: 2013 GEA LPG Supply and Demand Study Note: Petrochemical use of LPG is not included in this chart

Figure 7: Total national volume of stationary energy LPG demand (kilotonnes)

Source: 2013 GEA LPG Supply and Demand Study Note: Petrochemical use of LPG is not included in this chart


0

20

40

60

80

100

120

140

160

180

200

NSW ACT Vic Qld S A Tas WA NT

500

550

600

650

700

750

800

2008 2009 2010 2011 2012 2013

All states demand LPG for stationary energy:

¾ Victoria has the highest demand with almost 200 kilotonnes per annum

¾ New South Wales and

Queensland consume 190 and 169 kilotonnes per annum respectively

¾ Total stationary energy LPG

demand is estimated at 727 kilotonnes in 2013

Stationary energy LPG demand has remained steady over time:

x Australian consumption of stationary energy LPG has averaged 740 kilotonnes since 2008

x The LPG industry can

respond rapidly to high demand as it did in 2011





Our People Our value statement

“…. We provide a livelihood for families through our support of contractors as well as employees”

Figure 8: Workforce numbers by type


Figure 9: Workforce numbers by state



0

500

1000

1500

Employees Contractors

25%

1%

22%21%

7%

20%

1%2%

NSW

ACT

Vic

Qld

SA

WA

NT

Tas

We employ nearly as many contractors as we have employees:

¾ Our members directly employ in excess of 1,400 people

¾ We employ in excess of 1,200

contractors and externally hired people

Our members employ people in every state:

¾ A total of 670 people are employed in New South Wales, our largest state for employment at 25%

¾ 598 people are employed in

Victoria while 554 are employed in Queensland

¾ Due to the large number of

customers in regional and remote Australia, our members provide significant employment in these areas





Our Infrastructure Our value statement

“…. Gas Energy Australia members have just under $4 billion invested in delivering stationary energy LPG across the Australian continent”

Figure 10: Value of infrastructure by type ($ billion)


Figure 11: Number of cylinders by type (million)

Source: 2014 GEA Member Survey and GEA Data Note: Data does not include privately owned cylinders


0.0

0.5

1.0

1.5

2.0

2.5

Ports and

terminals

Storage, refill

and retail

Trucks Cylinders

0.0

1.0

2.0

3.0

4.0

4.5 kg 9 kg 15-18kg 45 kg 90 kg 180/210 kg

Our members have almost $4 billion invested in facilities, trucks and cylinders:

¾ Almost $1 billion invested in facilities such as ports, terminals, storage and retail facilities

¾ Almost $2.2 billion invested in

storage refill and retail

¾ Around $315 million is invested in trucks

¾ Almost $500 million invested in

cylinders

Over 7 million gas cylinders have been provided for stationary energy LPG customers:

x Over 4.5 million 9kg cylinders have been provided

x Over 2 million cylinders are the

45 kg type

x There are almost 276,000 15 to18 kg cylinder type

x Six cylinder types are available

to provide an “anywhere-anytime” energy source





Figure 12: Value of cylinders by type ($ million)

Source: 2014 GEA Member Survey and GEA Data Note: Does not include privately owned cylinders

Figure 13: Value of investment by state ($ billion)

Source: 2014 GEA Member Survey Note: Does not include privately owned cylinders


0

50

100

150

200

250

4.5 kg 9 kg 15-18kg 45 kg 90 kg 180/210 kg

0.00

0.20

0.40

0.60

0.80

1.00

1.20


Our members have invested a total value of $500 million in gas cylinders:

¾ Almost $250 million has been invested in 45kg cylinders

¾ Over $110 million has been invested in 9kg recreational cylinders

¾ Almost $100 million has been

invested in the larger 180-210 kg cylinders

Our members have invested in every state of Australia:

¾ New South Wales represents the highest level of investment at almost $1.2 billion

¾ Western Australia represents the

second largest investment with just under $1 billion

¾ Queensland and Victoria

together total almost $1.3 billion in investment





Our Cost Saving Performance Our value statement

“…. LPG is a competitively priced low emission energy source for households”

¾ Instantaneous LPG hot water saves consumers almost $1,000 dollars over the life span of their water

heater, compared with electric storage hot water

¾ The figure below shows comparative (15 year) lifetime net present cost of different water heater types used by medium size households in Australia. These estimates include the purchase and installation cost of each type of water heater and each type’s net present operating cost over its life.

Figure 14: Lifetime net present cost of household water heaters by energy type (weighted capital cities average)

Source: pitt&sherry, Greenhouse gas emissions performance of various types of residential water heaters, and emissions abatement opportunities, 2014


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$11,000

Electric

storage

Electric heat

pump

Solar

evacuated

tube

Solar flat

plate

Natural gas

storage

Natural gas

instantaneous

LPG storage LPG

instantaneous





Our Emissions Saving Performance Our value statement

“…. LPG offers significant emissions savings compared to electricity” ¾ The average instantaneous LPG hot water heater emits only 12.9 tonnes of carbon over a 15 year life

cycle – generating an emissions saving of 39 tonnes compared to an electric storage hot water heater ¾ The average instantaneous LPG hot water heater saves 11.4 tonnes of emissions compared with a solar

electric water heater – a saving of almost 50% Figure 15: Lifetime tonnes of emissions from household water heaters by energy type (weighted capital cities average)



0

5

10

15

20

25

30

35

40

45

50

Electric

storage

Electric heat

pump

Solar electric Solar flat

plate

Natural gas

storage

Natural gas

instantaneous

LPG storage LPG

instantaneous





Our value statement

“…. LPG offers a competitive source of greenhouse gas abatement” ¾ Instantaneous and LPG storage water heaters offer abatement costs competitive to other alternatives to

electric hot water systems. ¾ The figure below shows the comparative (15 year) lifetime cost of abatement resulting when continuous

tariff electric storage water heaters, used by medium size households in Australia’s eight capital cities, are replaced by low emission water heaters. Electric storage water heaters are used as the cost of abatement benchmark because they are the water heaters that produce the most greenhouse gas emissions yet are still used by about half of all Australian households.

Figure 16: Lifetime abatement cost per tonne of CO2 for alternatives to electric water heaters (weighted capital cities average)



-$160

-$140

-$120

-$100

-$80

-$60

-$40

-$20

$0

Electric heat

pump

Solar evacuated

tube Solar flat plate

Natural gas

storage

Natural gas

instantaneous LPG storage

LPG

instantaneous

Australian Liquefied Petroleum Gas Association Limited (Gas Energy Australia) Suite 7, 16 National Circuit Barton ACT 2600 Australia

Phone 02 6176 3100 Fax 02 6176 0207 Email [email protected]

http://new.gasenergyaustralia.asn.au/

ACN 002 703 951 ABN 11 002 703 951

Incorporated in New South Wales as a Public Company limited by guarantee Inaugurated 1958 Incorporated 1984

mailto:[email protected]

http://new.gasenergyaustralia.asn.au/

the stationary energy lpg industry - our value to australia final dec 14 copy

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