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Gas Use in Grid May All but Disappear in 20 Years

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Gas led recovery? AEMO says gas use in grid may all but disappear in 20 years by Giles Parkinson,  29 March 2021 The federal Coalition government’s gas-led transition plans have again been questioned, this time by the Australian Energy Market Operator, which says overall gas consumption is likely to fall over the next 20 years […]

Gas led recovery? AEMO says gas use in grid may all but disappear in 20 years

by Giles Parkinson,  29 March 2021

The federal Coalition government’s gas-led transition plans have again been questioned, this time by the Australian Energy Market Operator, which says overall gas consumption is likely to fall over the next 20 years and may virtually disappear in the grid because it can’t compete with renewables or green hydrogen.

Prime Minister Scott Morrison and Energy Minister Angus Taylor have put great store in their so-called ‘gas-led’ transition, an idea (some would say a fantasy) driven by the gas industry and its lobbyists within the Coalition. It is the only identifiable energy policy the federal government has.

But critics say it is a plan built on a false premise. The critics say that gas is not only too polluting for the emissions reduction task, it is also too expensive to compete against rival technologies, particularly those driven by cheap wind and solar.

AEMO, in its annual Gas Statement of Opportunities, a detailed annual analysis of future demand based on input from the industry itself, fails to produce a single scenario where gas demand increases over the next 20 years.

Read the full article here.


Media release – Australian Energy Market Operator (AEMO), 29 March 2021

AEMO forecasts adequate gas supply to at least 2026

The Australian Energy Market Operator (AEMO) forecasts an improved outlook for gas supply until at least 2026 across the eastern and south-eastern gas systems, if committed field developments and pipeline expansions proceeded as planned, with operation of the Port Kembla Gas Terminal (PKGT) commencing before the 2023 winter.

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AEMO’s Gas Statement of Opportunities (GSOO) highlighted southern supply risks for winter 2023 if PKGT is delayed and certain conditions emerge, such as a 1-in-20 maximum winter daily demand in Victoria, coincident peaks across southern regions, power-system events significantly increasing gas-powered generation of electricity (GPG), or gas production outages.

AEMO Group Manager, Forecasting, Nicola Falcon, said the announcement of the Port Kembla Gas Terminal, Australia’s first LNG import terminal, has improved supply capacity with an estimated injection of up to 500 terajoules per day.

“This development comes at a critical time, as existing Victorian production is declining faster than previously projected,” Ms Falcon said.

“Our annual analysis shows that without the Port Kembla Gas Terminal, the decline in flexible gas from existing fields would mean we need to rely heavily on storage, and increasingly on constrained pipeline infrastructure to meet the needs of gas consumers, especially during high demand days in winter,” she said.

AEMO’s GSOO – developed using reserve and forecast information from gas producers and industrial gas users – also highlights that the gas sector is on the cusp of transformation, with changes in consumption patterns forecast and alternate supply sources being actively developed.

“Australia’s energy sector is going through a rapid transition, driven by changes in consumer behaviour and efforts to decarbonise the system,” Ms Falcon said.

“This report recognises the potential of electrification, fuel switching to hydrogen, the Australian Government’s vision for a gas-fired recovery and LNG imports to all influence investment opportunities in the gas sector.

“Investments to address forecast supply gaps in the second half of this decade need to consider the transformation underway and be adaptable to manage changes in gas consumption.

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“There are a number of initiatives at both Commonwealth and state government levels that could change the market and impact the outlook described in the report, including proposals to drive more gas into the system,” she said.

The National Gas Infrastructure Plan (NGIP) being developed by the Federal Department of Industry, Science, Energy and Resources (DISER) is considering a number of pathways to unlock gas supply and improve efficiency in the east coast gas market.

Source: Tasmanian Times https://www.tasmaniantimes.com/2021/03/gas-use-in-grid-may-all-but-disappear-in-20-years/#utm_source=rss&utm_medium=rss&utm_campaign=gas-use-in-grid-may-all-but-disappear-in-20-years

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Finance Advice 2021