This paper argues that gas demand in New South Wales could fall to as much as half within ten years, meaning that gas investments being made now might never pay off.
Network costs often make up the largest part of a consumer’s gas or electricity supply bill. Investments in network infrastructure are based on estimates of future demand. If demand is overestimated, unnecessary infrastructure is built. Such poor investment decisions drive up the costs that small and large gas consumers must pay.
Recent unprecedented electricity price increases across eastern Australia were partly due to overinvestment in network infrastructure that, in turn, was partly a result of year-after-year overestimation of electricity demand by the responsible planning bodies.
A present danger is that future gas demand in eastern Australia now likewise being overestimated.
This report was commissioned by The Australia Institute.