The Australian Energy Market Operator's 2026 Integrated System Plan (ISP) reaffirms the critical role of gas in supporting reliable and affordable electricity to 2050, which will require more investment in new gas supply and infrastructure.
Australian Energy Producers Chief Executive Samantha McCulloch said the ISP was another reminder that governments must ensure policy settings support the investment in gas needed to maintain a reliable and affordable energy system.
"The ISP reaffirms that the National Electricity Market (NEM) will need more gas power generation to keep the lights on and power prices down," Ms McCulloch said.
"As more renewables enter the system and coal retires, gas will play an increasingly important role in maintaining reliability and supporting energy security.
"That is why governments must provide stable and predictable policy settings that encourage investment in the gas resources and infrastructure needed to support the transition."
The ISP confirmed to reach net zero “the least-cost pathway is a system built around renewable energy, connected through transmission and distribution networks, firmed with storage and backed by gas.”
It also projects the NEM will require 17 gigawatts of flexible gas-powered generation by 2050, up from 8GW today, which will require new gas supply, transport and storage infrastructure to support reliability and flexibility in the grid.
AEMO said “timely and efficient investment in new gas resources and/or infrastructure is critical to ensure the operability, reliability, and security of the power system”, while maintaining gas supply to residential, commercial and industrial consumers.
Ms McCulloch said the ISP underscored the importance of getting the design of an east coast gas reservation scheme right.
"A test of a well-designed domestic reservation policy will be whether it encourages the long-term investment in new gas supply and infrastructure that the ISP has identified.
“Unfortunately, the current draft design framework released by the government risks destroying investment signals, crowding out domestic-focused gas producers and ultimately risking higher energy prices and future shortfalls," Ms McCulloch said.