The head of the consumer watchdog remains confident Australia will be able to avoid a looming gas shortfall this winter.
In a speech to the Australian Domestic Gas Outlook conference, Australian Competition and Consumer Commission head Anna Brakey said uncontracted exports would mean sufficient gas for the domestic market.
“Since mid last year, LNG producers have told us they collectively expect to export 88 petajoules of their 146 petajoules of uncontracted gas,” she told the conference on Tuesday.
“This leaves 58 petajoules of uncontracted gas without the expectation of export, which, if it is produced and brought to market, would leave sufficient gas to address the risk of a shortfall.”
The comments follow a warning from the Australian Energy Marker Operator that extreme weather could lead to shortfalls over winter.
The operator said long-term shortfalls were also a possibility from 2027 without investment in supply.
However, the ACCC commissioner told the conference governments had to do more to address the issue.
“It is not just for producers to prevent the shortfall. Governments also have a role in ensuring sufficient gas supply both immediately and over the longer term,” Ms Brakey said.
“The uncertainty around the level of demand in 2023 largely relates to the demand for gas-powered generation, which is critically dependent on the prevailing weather, and on the conditions in the electricity market, making it difficult to forecast.”
The consumer watchdog was given powers by the federal government to enforce gas prices, following an intervention in the market.
Gas prices have been capped at $12 a gigajoule in response to rising energy prices, which Ms Brakey said was reasonable.
“This gas price cap has been, and remains, an appropriate response to ameliorate the impact on the east coast gas market of the disruption the war in Ukraine has had on global energy markets,” she said.
The watchdog said gas would remain a critical part of energy markets in coming years while emission-reduction measures take place.
“As Australia shifts towards net-zero emissions targets, it is likely gas will increasingly support the transition between coal power generation and renewable energy sources. This means gas remains critical,” she said.
“However, at the same time, consumers will likely substitute gas for other types of energy, especially in the transition to more renewable energy.”
– AAP
