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walbrook

28,462 Posts.

28/08/24

00:08

Post #: 75404295

Originally posted by pints: ↑
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Gas shortfall imminent, APA modelling shows

Brace for cold showers, big bills

New modelling shows the vital pipeline transporting gas from Queensland will be at capacity nearly every day next winter, leaving Australia drastically exposed.

Australian households could be hit with “cold showers” due to , with the nation’s largest gas pipeline operator warning expensivewill have to be imported into the country to fill the gap if pending projects are not approved.
New modelling by APA Group shows Australia’s east coast is facing a prolonged period of gas shortfalls, with a vital Queensland pipeline running at capacity over this winter amid ongoing renewable droughts and production disruptions in Victoria.
The data shows the southeast Queensland pipeline will be full and unable to meet extra demand out until 2027.
New spending on an expansion has been suspended due to a regulatory spat, with an investigation into the pipeline sector forcing APA to delay an investment decision until it has received further clarity.
Officials this winter said the country’s fleet of gas power stations could be forced to run off diesel next year as traditional supplies run dry.
APA chief executive Adam Watson pointed the finger at Labor’s intervention in the market in 2022, which sparked a regulatory overhaul that has stymied investment.
“Regulatory and policy impositions are running the very real risk that our governments will achieve an energy market outcome that is the exact opposite of their ambition,” Mr Watson told The Australian.
APA Group chief executive and managing director Adam Watson.
“That is, an energy market that’s less reliable, less affordable and with higher emissions. Put another way – cold showers, higher energy bills and coal generating our electricity for longer.”
The move marks the latest escalation in tensions between the energy sector and the Albanese government, following a string of warnings from the nation’s biggest manufacturers and gas producers over shortfall warnings.
Major energy players have sounded the alarm this week to Anthony Albanese and Peter Dutton ahead of the federal election that urgent action is needed on gas supply and infrastructure to avoid a crippling energy crisis.
APA’s decision to freeze investment will mean Australia may have to turn to importing LNG, despite being the world’s largest exporter of the fuel.
Mr Watson said if that were to occur, much of the blame would lie with Labor as an unintended consequence of its bungled gas policy, creating a situation where gas users are paying international prices despite the nation holding huge domestic reserves.
“The federal government’s gas price cap intervention two years ago was in part introduced because LNG exports were setting the price of domestic gas. That is, international LNG prices, which are beholden to global issues, were setting the floor price for Australia’s domestic gas,” Mr Watson said.
“The irony is that the wrong regulatory and policy approach could lead Australia back to where it started – with LNG imports setting the floor price domestically.”
Snowy Hydro boss Dennis Barnes said action was needed more broadly across the industry to bring supplies to market.
“We think action needs to be taken on gas development. More gas coming from Queensland, or, you know, gas coming from an LNG import terminal,” Mr Barnes said.
Woodside Energy, one of Australia’s largest LNG exporters, said the supply situation on the east coast was precarious and timing was fast running out.
“We’ve got a timing challenge,” Woodside chief executive Meg O’Neill said. “We, as a partner in the Gippsland basin joint venture, would be keen to bring more gas to market and continue to work closely with ExxonMobil to do so, but those fields are later in life, and the capacity to get more gas out of them is limited.
“We think an LNG import facility is a possibility, but there are additional gas resources if the political will were there to let investors pursue them.”
The Albanese government has set an aggressive target of having renewable energy generate 82 per cent of the country’s electricity by 2030 and has agreed to underwrite the development of 32 gigawatts of new wind and solar projects.
But it has excluded gas from the so-called capacity investment scheme, despite pleas from senior energy executives.
Gas power stations use gas to produce electricity, and can be fired up within minutes and operated for short periods of time before being turned off, making them an ideal backstop to wind and solar. But if developers are unable to get sufficient supplies of gas, Australia will be unable to develop new peakers.
“We expect to run Kurri Kurri only around 10 per cent of the time, but it will enable more renewables to come into the market,” Mr Barnes said.
The Australian Energy Regulator is examining APA’s South West Queensland Pipeline, a key supply link in the transmission network connecting Queensland with the southern states that runs at near capacity during peak demand. The regulatory uncertainty has caused APA to pause a planned expansion of the pipeline.
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