Australia’s gas industry has fulfilled its commitment to the domestic market as the Australian Competition & Consumer Commission (ACCC) again warns governments of the need for new gas supply to avoid east coast shortfalls in coming years.
Australian Energy Producers said the ACCC’s Gas Inquiry December 2023 Interim Report confirmed the sector’s commitment to providing reliable and affordable energy to Australian homes and businesses.
Sufficient east coast gas supply was forecast to 2028 but structural shortfalls were due to occur from then.
The ACCC also warned Victoria and New South Wales faced shortfalls from next year, with millions of domestic and commercial users relying on gas transported from Queensland at extra cost.
The ACCC said “averting currently anticipated future gas supply shortfalls will likely require the development of new gas fields and pipelines” and that “development of most of the proposed supply and infrastructure projects has been delayed by 12–24 months where last reported to us.”
Australian Energy Producers Chief Executive Samantha McCulloch said: “The report shows that government intervention and regulatory uncertainty has delayed the new gas supply urgently needed to keep the lights on and put downward pressure on prices for Australian homes and business.
“This is especially so in southern states where cheaper new gas could be developed closer to customers.”
Australian Energy Market Operator (AEMO) Draft 2024 Integrated System Plan (ISP) also highlighted the need for new gas supply – as a partner to renewables in power as coal exits. Modelling showed gas generation would be the same in 2045 as today while gas capacity needed to rise substantially.
Ms McCulloch said: “You can’t be a renewable superpower without natural gas. Today’s AEMO report shows the importance of new supply because gas is a safety net for Australia’s fragile electricity system.
“As coal electricity generation comes out of the system over the next decade, gas generation capacity will need to increase significantly so it can be instantly used when renewables aren’t available.”
Victorian energy policy disappears further down the rabbit hole
Commenting on a seperate issue, Australian Energy Producers said Victoria’s extension of its Gas Substitution Roadmap will load more demand on to the state’s fragile –coal-based electricity system – risking blackouts and driving up energy prices for little climate benefit.
McCulloch said Victoria continued to ignore the fundamentals of the energy system transformation to net zero – including the importance of gas as a partner to renewables in reliable electricity generation.
Ms McCulloch said extending a taxpayer-funded gas-to-electric appliance switching program to existing dwellings removed freedom of choice for consumers.
“Higher prices and a higher risk of blackouts for little climate benefit will be the result of ignoring the important role of natural gas,” she said.
“As the world last night recognised at the COP28 Summit the important role of natural gas in the energy transition, Victoria continues to undermine it and back coal-based electricity.
“Victoria’s energy policy continues to remove from consumers the right to choose.
“Meanwhile, the state ignores the urgent need for new local gas supply close to the state’s millions of households and business users to reduce emissions and put downward pressure on prices.
“Given Victoria generates over 60 per cent of electricity from coal, the focus should be on reducing emissions from electricity, through renewable generation and gas as an instant backup, before adding to power demand.”
The Australian Competition and Consumer Commission (ACCC) and the Australian Energy Market Operator (AEMO) have repeatedly warned of looming energy shortfalls in southern states.
In August, AEMO said Victoria needed “substantial volumes of gas” to avoid shortfalls in coming years and the fragility of its electricity system meant the state would fail to meet minimum reliability standards set by AEMO within a few years.
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17/05/2021
