Aussie gas supply to meet declining usage until 2033
The Australian Energy Market Operator (AEMO) on March 29 said gas supply in the country will meet declining usage until 2033.
AEMO’s 2022 Gas Statement of Opportunities (GSOO) forecasts existing, committed and anticipated gas supply, including anticipated LNG imports, will meet declining gas consumption until 2033.
Drafted using supply information from gas industry participants, the report also shows the pathway for gas is uncertain as Australia transitions to a net-zero emissions economy by 2050.
AEMO executive general manager system design, Merryn York, said gas has a critical role in the electricity market as coal generation retires, however, future gas use is expected to be impacted by consumers switching to electricity and alternative gaseous fuels.
“Under AEMO’s scenarios, there is uncertainty about future demand for and supply of natural gas as the market identifies pathways to decarbonise and users look to alternative fuels, like hydrogen or electricity, for industrial processes, manufacturing, heating, and cooking,” she said.
The 2022 GSOO and 2022 Victorian Gas Planning Report Update also forecast a risk of gas shortfalls under extreme weather conditions from winter 2023 in New South Wales, Victoria, Tasmania and the Australian Capital Territory.
“A shortfall risk in the south-eastern states in winter 2023 is forecast under extreme conditions, given ongoing production decline from Bass Strait, and pipeline capacity limits from northern Australia, including the Moomba to Sydney Pipeline and the South West Pipeline,” York said.
“Investments, such as the Port Kembla Energy Terminal, Golden Beach production facility and duplication of the Winchelsea compressor on the South West Pipeline, will help but are unlikely to be operating until after winter 2023,” she added.
York said that reducing electricity generation from gas is the likely solution to manage shortfalls, unless actions identified in the ‘step change’ scenario, like switching from gas to electricity for residential heating and hot water, are taken quickly.
AEMO said it will continue to work closely with governments and participants to identify appropriate solutions to address the scarcity risks for winter 2023.
After winter 2023, to 2026, shortfall risks are expected to be further reduced by anticipated projects including Port Kembla Energy Terminal, Golden Beach and some additional Victorian offshore field developments.
Australia’s peak oil and gas body Appea said the AEMO report has confirmed the need to remove barriers to new gas supply and projects.
The GSOO forecast that gas supply was available under a range of scenarios to meet demand across the market until the 2030s. Mechanisms are also in place to ensure domestic supply in the event of a shortfall.
But Appea CEO Andrew McConville said state and federal governments must also make investment policy and regulatory settings more competitive to ensure ongoing energy security.
McConville said the report showed that while a range of future scenarios were possible, natural gas remained a much-needed part of the future cleaner energy mix given its firming role for renewables, as a replacement for coal, as a feedstock for hydrogen and an ongoing source of heat and power for hard to replace uses in manufacturing.
“Gas, as a cleaner form of energy, is a reliable and stable fuel and demand shows it will be a key plank of our power mix for decades to come as we decarbonise and deliver our commitment to reduce greenhouse gas emissions to net zero by 2050,” he said.