Gas sector delivers supply as ACCC issues wake-up call for governments

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 today 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: “Today’s 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.”

Today’s 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.”