A projected decline in gas production could result in a shortfall of gas-powered electricity generation (GPG) impacting New South Wales, Victoria and South Australia from the summer of 2018-19, according to information provided in the Australian Energy Market Operator’s (AEMO) 2017 Gas Statement of Opportunities (GSOO).
The report, intended to assess the adequacy of gas infrastructure, reserves and resources to meet demand in eastern and south-eastern Australia to 2036, outlines that gas producers have forecast annual production to decline by 122 PJ, from 600 PJ in 2017 to 478 PJ in 2021. Based on this information, AEMO advises additional production will be required to meet the needs for GPG and residential, commercial and industrial gas consumers.
This tightening of the domestic gas market will have flow-on effects to the electricity sector unless there is an increase in gas supplies and development. Without this development to support GPG, modelling suggests average electricity supply shortfalls of between approximately 80 gigawatt hours (GWh) and 363 GWh may be experienced in 2018–19 and 2020–21. The scale of these shortfalls would breach the reliability standard which aims to supply at least 99.998% of electricity demand.