Gas shortages to worsen: report
Western Australia is at risk of a significant gas shortage over the next decade, according to the 2023 Gas Statement of Opportunities report by the Australian Energy Market Operator (AEMO).
The situation could worsen after 2031 when the government plans to close its coal-fired power plants.
AEMO's analysis indicates that current gas supplies will be insufficient to meet domestic demand, projecting a shortfall of 105 petajoules by 2026.
This deficit could lead to shortages during supply disruptions or high demand periods, and has already caused a spike in gas prices from $2.13 per gigajoule in 2020 to around $10 per GJ.
The report underscores the pressing need for new gas supply investments to prevent energy shortages.
Demand for gas, especially for electricity generation in the South West and industrial processing, is expected to rise annually by 2.2% until 2033. Conversely, gas production is predicted to decline by 0.9% annually due to the aging of existing fields.
Despite the anticipated contribution from new projects like Strike Energy’s South Erregulla and Woodside Energy’s Scarborough, AEMO stresses that these won't suffice to meet the forecasted demand.
The impending closure of 1.6 gigawatts of coal-fired power and increasing electricity needs will further stress the gas supply, necessitating additional gas-fired power generation alongside a focus on renewable energy and battery storage.
The report comes ahead of a parliamentary inquiry into the domestic gas market, highlighting concerns over gas producers not reserving enough supply for domestic use, as mandated.