The words "chickens coming home to roost" comes to mind with the way Aussie Govt IMO has screwed the energy users let alone the gas suppliers . The green wand will cost industry and every citizen big $.

Press release

https://aemo.com.au/newsroom/media-release/gas-market-outlook-signals-need-for-new-investment

Gas market outlook signals need for new investment

21/03/2024

3 min

AEMO’s latest gas market outlook for Australia’s east coast has forecast a gap in gas supply for southern states from 2028, as production from Bass Strait continues to decline faster than demand.

The report signals that new investment is urgently needed if gas supply from 2028 is to keep up with demand from homes and businesses, and for gas-powered electricity generation.

It also highlights risks of peak-day shortfalls on some days under extreme winter conditions from 2025 and the potential for small seasonal supply gaps from 2026 in southern states¹.

Incorporating input from gas producers and operators of gas processing facilities, pipelines and storage facilities, the 2024 Gas Statement of Opportunities (GSOO) report is developed to support investment opportunities in the east coast gas system.

Complementing the GSOO is AEMO’s 2024 Victorian Gas Planning Report (VGPR) update, which provides a five-year assessment of the supply demand balance in Victoria’s Declared Transmission System.

Similar to the 2023 GSOO, domestic gas consumption from residential, commercial and industrial consumers is again forecast to decline during the next 20 years. This decline is forecast to be driven by increased electrification as the economy transitions to meet net zero emissions goals.

AEMO CEO Daniel Westerman said: “Since the 2023 GSOO, a range of storage and pipeline projects have been completed², improving gas supplies to southern states that will help offset declining production from Bass Strait gas fields.

“However, gas production is forecast to fall faster than demand in the south³, driven by declining production from Bass Strait, which has historically supplied around two-thirds of southern Australia's gas.

"While the report identifies the need to deliver new infrastructure by 2026, running gas-powered generators on liquid fuels could provide temporary relief during periods of extremely high gas demand.

“From 2028, supply gaps will increase in size as Bass Strait production falls significantly,” he said.

In the northern regions, where the majority of gas is produced for export, investment is also needed from 2026 to meet both export and domestic demand.

In the 2024 GSOO, AEMO has assessed the impact of a number of currently proposed supply, transportation and storage options in reducing the risk of peak day shortfall and annual supply gaps.

“For the first time, we've assessed a range of investment options that include pipeline upgrades, new domestic supply including renewable gases, and LNG import terminals,” Mr Westerman said.

“While each individual investment could delay shortfalls for a number of years, a combination of these options will be needed to fully address gas supply issues,” he said.

Whilst more supply will be needed to meet demand in the coming decades, AEMO has some powers to help manage potential operational risks.

To help manage storage levels, an arrangement in place since 2023 requires AEMO to contract available capacity at the Dandenong LNG storage facility in accordance with the Domestic Wholesale Gas Market interim LNG storage measures rule change⁴, which is effective until the end of 2025.

Alongside continued investment, Australia’s energy ministers extended AEMO’s function in May last year to help manage gas reliability and shortfall risks on the east coast. Proposed stage 2 measures were agreed by energy ministers in December 2023, which seek to establish a fit-for-purpose Reliability and Supply Adequacy Framework⁵. These measures will take time to implement, including changes to the National Gas Rules, industry consultation, procedures and system development.

The 2024 GSOO reaffirms the important role gas-powered electricity generation will play in reducing emissions and maintaining electricity reliability and security as the power system transitions from coal to intermittent renewable generation and an increase in electricity demand through the electrification of some gas use.

“Flexible gas-powered electricity generation is an essential component of the energy mix into the future,” Mr Westerman said.

“Gas, along with batteries and pumped hydro, will enable higher rates of renewables and support electricity reliability as Australia's coal-fired power stations retire,” he said.

^{1 _{New South Wales, the Australian Capital Territory, Victoria, South Australia and Tasmania.}2 _{Iona underground gas storage facility upgrades, expansion of the South West Pipeline, including the Western Outer Ring Main in Victoria and the East Coast Grid Expansion Stage 1 project, with Stage 2 available for winter 2024.}3 _{Maximum daily production capacity from existing, committed and anticipated southern fields is projected to decrease by 40% from 1,260 TJ/d in 2024 to 740 TJ/d in 2028.}4 _{Australian Energy Market Commission “DWGM interim LNG storage measures”15 December 2022.}5_{See announcement.}}

ENDS…