New AEMO gas forecast a blow to AGL’s gas terminal plans

AEMO’s annual assessment of the east coast gas market, the Gas Statement of Opportunities (GSOO), shows that the approved Port Kembla gas import terminal in NSW is sufficient to address gas supply concerns over the next five years, rendering unnecessary AGL’s proposal to build a similar import terminal in Westernport Bay.

Environment Victoria Campaigns Manager Dr Nicholas Aberle said today:

“AGL’s argument that their Crib Point project is needed to deal with immediate gas supply concerns has just been blown out of the water.”

“AEMO has made it clear that the already approved Port Kembla import terminal will be sufficient to supply gas to the east coast, including Victoria, until at least 2026. That gives time to reduce gas demand and avoid AGL’s plan to turn Westernport Bay into another gas import terminal.”

“With AGL set to announce a new organisational strategy at their Investor Day tomorrow, they should take the opportunity to shelve their risky and deeply unpopular plan.”

“This improved outlook provides the Andrews government with enough time to develop a gas strategy that focuses on reducing demand through energy efficiency and switching appliances from gas to electric, so we can avoid damaging new gas supply projects like Crib Point and onshore drilling,” said Dr Aberle.

In the 2021 GSOO, AEMO has looked more closely at the potential for energy efficiency and electrification to avoid gas shortfalls.

“For too long in Australia, we’ve been looking at only one side of the gas market and asking the question, how can we increase supply? This AEMO report finally starts to ask the smarter question, what if we didn’t need as much gas in the first place?” said Dr Aberle.

“AEMO acknowledges that options to reduce demand are typically low cost and have ‘minimal investment regret’.”

“Our own recent analysis shows that existing Victorian government policies, such as the gas heater rebate scheme, will reduce winter gas consumption enough to avoid the most common forecast gas shortfalls.”

“A key part of this will be stopping new residential gas connections. AEMO’s modelling shows that this alone could play a huge role in reducing overall gas consumption, and it is already cheaper to run a new house that is all-electric, so this is a win-win situation.”

Environment Victoria has released a briefing paper summarising research into gas demand reduction measures in Victoria. Read the report >>