The Australian Energy Market Operator (AEMO) has issued a warning of potential gas shortages in south-eastern Australia this winter due to a cold snap increasing energy demand and an unplanned outage affecting gas supply from Bass Strait. This threat applies to Victoria, New South Wales, South Australia, Tasmania, and the ACT until the end of September. The depletion of gas supplies from the Gippsland Basin in Bass Strait has been a major factor in this warning, as these fields have historically supplied much of eastern Australia’s domestic gas demand.
Despite Australia’s status as a major gas exporter to Asia, declines in the Bass Strait gas fields have raised concerns about domestic shortages on peak demand days. AEMO suggests that without significant investments in new gas fields, pipeline upgrades, or the commissioning of LNG import terminals, the east coast market may face a yearly deficit by 2028. As gas use for power generation depletes stockpile levels at Victoria’s Iona storage facilities, producers in Queensland are being urged to increase gas volumes sent to southern markets, and industrial users are encouraged to review their gas requirements.
The ongoing reliance on gas in Australia, a significant contributor to greenhouse gas emissions, has become a point of concern as governments prioritize decarbonization efforts. Policies aiming to reduce gas consumption, such as banning gas hook-ups in new residential buildings and promoting electric alternatives to gas appliances, are helping to decrease long-term demand forecasts. However, the transition away from gas is not occurring quickly enough to prevent potential shortages, particularly in states like Victoria where gas is widely used for heating, cooking, power, and manufacturing purposes.
In Victoria alone, where over 2 million homes and businesses rely on gas, available supplies are projected to decrease by 48% by 2028. As AEMO emphasizes the need for increased gas production to meet demand in the short term, longer-term solutions like new gas infrastructure and alternative energy sources are being considered to address the looming threat of gas shortages in south-eastern Australia. The balance between meeting immediate energy needs and transitioning to cleaner, more sustainable sources remains a complex challenge for policymakers and energy stakeholders in the region.
