The Australian Energy Market Operator's (AEMO) 2024 Integrated System Plan (ISP) has reaffirmed the critical role of gas in Australia's energy security and the urgent need for investment in new gas supply and infrastructure to enable the transition to net zero by 2050.
Australian Energy Producers Chief Executive Samantha McCulloch said the ISP is another reminder that governments must act with a sense of urgency to ensure investment in new gas supply.
"The ISP makes clear that gas will play an increasingly important role in keeping the lights on for Australian households and businesses. It follows AEMO's warning last week of potential gas shortages in Victoria, with gas demand surging as a result of cold weather and reduced wind output," she said.
"It also adds to repeated warnings from AEMO, the Australian Competition and Consumer Commission and other independent experts about the need for investment in new gas supply to prevent the structural shortfalls that are forecast from 2028."
The ISP released today also said the energy transition "depends on timely investment decisions, which are hampered by uncertainty [and that] delays and uncertainties in energy regulation, environmental and planning approvals increase the complexity faced by electricity infrastructure investors and add to the risk of project delay".
"Investment in new gas supply is now critical if we are to avoid winter gas shortages becoming the new normal," Ms McCulloch said.
The ISP also confirmed that gas-powered generation will play a greater role in the National Electricity Market (NEM) to 2050 as coal exits and the share of intermittent renewables in the system increases.
AEMO said this will require an additional 13 gigawatts of gas-powered generation capacity to be built by 2050 "to ensure the NEM remains resilient under a range of power system and extreme weather events".
"As well as providing 42% of the energy used by Australian manufacturers, gas will become an increasingly important source of power generation as coal-fired power stations retire and more renewables come into the grid," Ms McCulloch said.
