Article by Matt McKenzie, courtesy of The West Australian.
Western Australia will have enough gas to keep the economy running until 2027, but a big long-term shortage is still looming.
The Australian Energy Market Operator is forecasting WA will produce enough gas to cover local consumption for the next three years, a significant improvement on the outlook just 12 months ago.
That will be a relief for the energy sector and major industries as the State’s economy is more reliant on the fuel than anywhere else in Australia. Mining, manufacturing and power stations all use gas.
But the outlook is weaker from there.
By 2030, AEMO expects big shortfalls will emerge. About 14 per cent of local demand will be unmet by 2034.
The projected deficit is better than previously expected — yet still a significant problem and a headache for the State Government’s energy strategy.
The domestic gas market’s rules took centre stage this year amid a heated debate driven by a parliamentary inquiry.
It sparked Woodside to commit an extra 50 terajoules per day for local users, about 5 per cent of demand. The State Government watered down a 2020 ban on onshore producers exporting gas in the aftermath of the inquiry.
Extra supply from Woodside, Chevron and Strike Energy have helped ease the shortage in the next few years.
The closures of of energy-intensive manufacturing at Alcoa’s Kwinana refinery and BHP Nickel West have driven demand lower and also helped reduce looming energy deficits.
“We’re forecasting gas supply to exceed demand until 2027, due to increased supply alongside a temporary reduction in mining and industrial consumption,” AEMO interim WA executive general manager Nicola Falcon said.
AEMO is still raising the alarm about supply into the next decade.
The massive deficits forecast into the 2030s have narrowed but the State is still expected to be short of gas as older production fields run out of fuel.
Demand will lift as coal power stations close and gas is used to help back up new renewable and battery projects.
“Over time, as more renewable generation is connected and electrification continues, gas powered generation is expected to play a more seasonal role,” Ms Falcon said.
“(That means) higher use during periods of low wind and sunshine, and high demand in winter; or when supporting peak demand in summer.”
The DomGas Alliance — the lobby group for the State’s biggest gas users — wants exports of onshore gas banned again from 2030.
“The (report) reaffirms what we’ve long known. Western Australia is on track for a sharp domestic gas supply shortfall post-2030.,” a spokeswoman said.
“This is not just important for WA, but Australia’s economic well-being depends on keeping this State’s mines, mineral processing and manufacturing going — all powered and fed by natural gas.”