The narrowly-avoided east coast gas crisis highlighted the fragility of Australia’s energy market during the energy transition, according to EnergyQuest’s latest report.
The report indicated that, by 2034, Australia will need to rely on imports for half of the country’s gas supply to the southern region – NSW, VIC, TAS and SA – to meet winter peaks and offset falling production.
EnergyQuest CEO Graeme Bethune said that capping the price of gas could easily exacerbate the current pressure from increased gas prices.
“Fundamentally there are two ways of taking the pressure off domestic gas prices, increasing supply and reducing demand. Price caps do the opposite, by increasing demand and reducing supply,” said Bethune.
Victoria’s increasing gas production from its Gippsland and Otway basins has pushed back the need for massive imports temporarily.
“Increased Victorian gas supply is forecast to offset the decline of the legacy basins – Gippsland, Cooper and Otway – until 2027,” said Bethune.
The report also found that, in the absence of LNG import terminals, Australia would need to divert approximately 3.5 million tonnes of contracted gas from foreign investors.
The projected shortfall on the east coast was key to demonstrating the complexity of the energy transition, and the importance of treading carefully.
“Widespread blackouts were avoided, but it was a clear lesson on the fragility and lack of resilience in the energy market as the massive changes needed to transition to a net zero carbon future are undertaken,” said Bethune.
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