As Australia accelerates its transition towards a net-zero energy future, the functional role of gas-powered generation is shifting from mid-merit supply to providing flexible firming capacity and grid stability. Concurrently, the rapid deployment of variable renewable energy (VRE), particularly solar and wind, necessitates complementary solutions to manage intermittency, maintain system reliability and ensure commercial viability. This extended abstract investigates the structural and operational synergies between renewable energy and gas-powered generation, focusing on how gas complements renewables and the challenges delivering gas supply and infrastructure suited to its vital grid firming role. Hybrid models can deliver secure, low-emissions power while optimising asset utilisation and commercial performance. This abstract outlines several commercial structures such as financial instruments, tolling agreements, partnerships, acquisition/lease agreements and build-own-operate models that facilitate renewables being effectively paired with flexible gas assets. Drawing on recent project case studies and market developments, it examines how hybrid models can align the interests of renewable developers, gas generators and energy off-takers as well as considering the implications of government policy on future investment decisions. It argues that commercially linked renewable–gas hybrid models, rather than standalone merchant gas or renewables, represent an important pathway for maintaining reliability and investment signals in a high-VRE National Electricity Market (NEM), and evaluates the commercial structures best suited to allocating risk and value in that context.
Leersnyder et al. (Thu,) studied this question.
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