Media release: GSOO reaffirms need to fast-track new gas supply, the ‘ultimate backstop’

The Australian Energy Market Operator’s latest Gas Statement of Opportunities (GSOO) reaffirms the need for governments to fast-track new gas supply, amid an improved supply-demand outlook that defers forecast seasonal and structural shortfalls by a year.

Australian Energy Producers Chief Executive Samantha McCulloch said the report made it clear that there was no room for complacency if the east coast is to avoid shortfalls, with AEMO finding that ‘all scenarios identify the need for new supply investments to maintain supply adequacy’.

“The GSOO makes clear that governments and regulators must work with industry to remove regulatory barriers to new gas supply and investment to avoid shortfalls,” Ms McCulloch said.

The GSOO also stated, ‘The completion of committed and anticipated gas supply developments is vital to minimise shortfall risks’ – the latest in a long list of reports from AEMO and the Australian Competition and Consumer Commission underscoring the need to expedite gas projects.

“This week’s announcement of a $350 million investment by Gippsland Joint Venture partners Woodside Energy and Esso Australia to boost domestic gas supply has contributed to the GSOO’s improved supply outlook, but more supply projects are urgently needed.”

Ms McCulloch said the GSOO reaffirmed the important role of natural gas in ensuring reliable electricity, with AEMO Chief Executive Daniel Westerman stating, “Flexible gas-powered generation will remain the ultimate backstop in a high-renewable power system.

“AEMO’s latest projections show annual gas demand for power generation more than doubling between 2025 and 2044 in its Step Change Scenario, and peak day gas demand for electricity almost quadrupling to back up increasing shares of renewables.”

The GSOO also confirmed that expediting gas projects could deliver enough gas to significantly defer structural shortfalls, stating that “currently uncertain southern supply developments may delay annual supply gaps to 2034 and help mitigate peak day shortfall risks”.

“While 2028 may seem a long way away, the long lead time for major energy projects means governments need to act now to ensure Australian homes and businesses continue to have reliable and affordable energy.”

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