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Experts say Australia has plenty of gas

Climate Media Centre 3 mins read

Thursday 21st March 2024

 

Gas experts have weighed in on the Australian Energy Market Operator’s gas outlook (Gas Statement Of Opportunities) this morning, reminding Australians that there is no shortage of gas in Australia because three-quarters of gas produced locally is exported.

 

The following analysts are available for comment today.

 

To arrange interviews with IEEFA analysts, please contact:

Kevin Morrison 0402 367 229 

Amy Leiper, 0414 643 446 / aleiper@ieefa.org 

For Tom Quinn please contact  Jacqui Street, Climate Media Centre 0498 188 528 / jacqui.street@climatemediacentre.org.au

 

 

Tom Quinn, analyst for Climate Solutions and managing director Springmount Advisory

Location: Melbourne

Tom Quinn said: "If Australia is facing shortfalls, exports should be limited during shortfall periods in order to protect local industry and households.

 

"We are one of the largest gas exporters in the world and it is ridiculous if we don't ensure enough is set aside for local users. The nation's security shouldn't be held hostage to the greed of gas exporters."

 

 

Kevin Morrison, is an Energy Finance Analyst, Australian Gas

Institute for Energy Economics and Financial Analysis

Location: Sydney

 

Kevin Morrison said: “AEMO’s GSOO 2024 estimates the perennial forecasts of shortfalls that rarely eventuate is due to the fact that there is no shortage of gas in eastern Australia given three-quarters of the gas produced in the region is used as feedstock for LNG exports or is consumed in converting gas to LNG.

 

“AEMO could be setting themselves up for another year of over-estimating demand. AEMO makes no mention of the closure of the country’s largest gas-fired gas plant and its subsequent impact of reducing demand. AGL is to close the remaining three units of its Torrens Island B gas plants (600MW) in June 2026. Although in Figure 2 on page 7 it shows a large drop in gas for power generation by 2030 of around 60TJ/d from around 100TJ/d in 2023.

 

“There are several gas projects that are deferred or delayed that could still come onstream in the scenario of a shortfall in 2028, with Beach Energy’s Enterprise and Thylacine fields, expected to get the go ahead later this year. Comet Ridge’s anticipated Mahalo and Mahalo North developments are also other potential domestic supply options, as is Senex’s Atlas and Roma North expansions as well as APLNG’s Ironbark development.”

 

Jay Gordon, Energy Finance Analyst, Institute for Energy Economics and Financial Analysis

Location: Sydney

 

Jay Gordon said: “Although AEMO are forecasting higher supply shortfalls in their central Step Change scenario compared to their 2023 report, this is mostly driven by an increase in gas power generation forecasts.

 

“These assumptions come from AEMO’s draft 2024 ISP. They carry significant uncertainty and are inconsistent with recent trends that show that gas generation has halved in the past decade.

 

“AEMO themselves have stated: “there are many considerations […] to be assessed before this role for gas powered generation becomes firm. These GPG forecasts, particularly late in the GSOO horizon, are therefore uncertain.” (2024 GSOO; p.38) 

 

IEEFA has analysed AEMO's latest gas power generation (GPG) forecasts and found that they need further qualification. We found significant changes in AEMO's modelling assumptions that relate to GPG and competing technologies such as utility-scale storage, that were not adequately discussed in AEMO's draft ISP.

 

“Additionally, this GSOO warns that meeting such a high future demand for GPG will require additional supply and infrastructure developments. It's not clear whether high levels of GPG would still be cost-effective for energy consumers if the costs of these upstream developments are taken into account. 

 

“The 2024 GSOO forecasts that gas demand in buildings and industry is likely to decline quicker than previously forecast. However, recent developments suggest that residential demand may face even steeper declines.


Contact details:

To arrange interviews with IEEFA analysts, please contact:

Kevin Morrison 0402 367 229 

Amy Leiper, 0414 643 446 / aleiper@ieefa.org 

For Tom Quinn please contact  Jacqui Street, Climate Media Centre 0498 188 528 / jacqui.street@climatemediacentre.org.au

 

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