AEMO report highlights need for gas supply investment

Gas investment

The Australian Energy Market Operator’s (AEMO) latest Gas Statement of Opportunities (GSOO) report has signalled that new investment is urgently needed if gas supply from 2028 is to keep up with demand from homes and businesses.

It also highlights risks of peak-day shortfalls on shortfalls from 2025 and the potential for small seasonal supply gaps from 2026.

Australian Pipelines and Gas Association (APGA) chief executive officer Steve Davies said there needs to be a long-term structural fix providing significant new supply sources.

“Gas infrastructure companies have invested to help solve this crisis without long-term contracts that provide certainty,” he said.

“Governments must act to de-risk gas investments, which are essential if we are to close coal power stations and support intermittent renewables during the energy transition.

“For gas-powered generation, this means inclusion in the Capacity Investment Scheme.”

AEMO chief executive officer Daniel Westerman said that while there have been improvements, challenges remain.

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

“However, gas production is forecast to fall faster than demand in the south, 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.”

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