The Australian Energy Market Operator (AEMO) says gas supply should meet Australia’s 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. 

However, the experts say future gas use is expected to be impacted by consumers switching to electricity and alternative gaseous fuels.

“Dispatchable firming capacity, such as gas, hydro and battery storage, will complement variable renewable generation as coal-fired generation leaves the market,” says AEMO Executive General Manager System Design, Merryn York.

“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.

AEMO also predicts that shortfalls could occur in the south-eastern states in winter 2023 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.

It says investments such as the Port Kembla Energy Terminal, Golden Beach production facility and duplication of the Winchelsea compressor on the South West Pipeline could help, but are unlikely to be operating until after winter 2023.

“This leaves reducing electricity generation from gas as 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,” Ms York said.

AEMO says 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.