The Australian Energy Market Operator’s (AEMO) latest Gas Statement of Opportunities (GSOO) report highlights the importance of unlocking new gas supplies and supporting the critical infrastructure needed to protect consumers from higher energy prices caused by forecast gas shortfalls.
In its latest GSOO report released today, AEMO has said the outlook for gas supplies has improved over the past year, but the risk of shortfalls remains if critical gas projects are not developed to ensure sufficient supply.
This reinforces the Morrison Government’s action and investment in critical gas infrastructure including $50.3 million in the 2022-23 Budget towards seven priority gas infrastructure projects, as well as key carbon capture and storage infrastructure, to avoid potential shortfalls. This includes projects in Queensland, Victoria, New South Wales and the Northern Territory.
This is in addition to the Government’s $32 million loan to accelerate the development of the Golden Beach gas production and storage project in offshore Gippsland, Victoria and $30 million grant to progress the Port Kembla gas project to final investment decision.
The GSOO also notes gas generation is forecast to continue to have a critical role in providing stability to the National Electricity Market (NEM), supporting and firming Australia’s record levels of renewable energy generation to help meet the NEM’s energy needs into the future.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said AEMO continues to forecast a very tight gas supply demand balance, including the potential for supply shortfalls to occur as soon as winter 2023 in extreme weather conditions.
“Continued investment in Australia’s gas resources is essential to avoid the supply shortfalls and price volatility currently being experienced across Europe and Asia,” Minister Taylor said.
“Gas prices in Asia and Europe have increased by more than 300 per cent over the past 12 months and are currently around 78 per cent higher than our domestic gas prices. Australian workers, manufacturers and households cannot afford to have that situation here at home.
“AEMO is clear that gas generation, like our investment in the Hunter Power Project in Kurri Kurri, will continue to play a critical role in the electricity gird as a much-needed source of on-demand, reliable power to support and firm growing renewables.
“We will continue to strongly back critical gas infrastructure projects to get local gas to where it is needed and at a competitive price to support gas users.
“The Morrison Government stands firm on supporting gas. This is in complete contrast to the Labor Party, which is willing to risk Australia’s energy security and investment in regional Australia to appease gas activists.”
Minister for Resources and Water Keith Pitt said AEMO’s report supports the previous findings of the ACCC’s January 2022 Interim Report and the Government’s National Gas Infrastructure Plan that more gas supplies need to be unlocked to ensure supplies.
“This Government remains committed to managing the risks to our domestic gas supply and is working to make sure we have plentiful supplies of affordable gas to keep Australians in jobs and support our industries and manufacturers,” Minister Pitt said.
“We will continue to invest in the development of gas projects in regional Australia to keep the lights on and support our industries and businesses.
“The role gas plays in these uncertain times is essential and Australia’s resources sector is not only helping to provide lower gas prices at home, but also providing stability across the globe.”
The report is available on the AEMO website https://aemo.com.au/en.
