Victoria demands 'immediate action' to prevent gas supply crisis

On Wednesday, Queensland Energy Minister Mick de Brenni claimed his country had done the heavy lifting in the national energy market.

Load

“We send 300 terajoules of gas per day to the southern states, enough to power hundreds of thousands of homes,” de Brenni said.

“We are providing these supplies to help Victorians and NSW residents through one of their toughest winters on record.”

Australia’s energy market remains in disarray. Professor Bruce Mountain, director of the Victorian Center for Energy Policy, said coal-fired power generation was now “past its prime” and there was a shortage of wind and solar power available to offset the decline in coal.

“As a result, gas has been forced to enter the market to produce much more electricity than usual,” he said. “We have a gas generation that is not efficient for power, the goal is purely to fill the peak, but it doesn’t just fill the peak, it runs very often, so it drains a lot of gas out of the system.”

Mountain said Victoria was producing more gas than it used, but the supply crisis had been exacerbated by the gas crisis in Europe and less than expected production from Queensland’s coal seam gas fields.

He said Victoria’s plan to give market operators the power to set minimum storage levels represented a proxy plan to limit gas exports. He said normally such an intervention would not be justified, but spot prices for gas have reached very high levels.

“I think … actually trying to limit the export market to a certain level sounds very reasonable,” Mountain said.

Gas producers see things differently. David Maxwell, managing director of Cooper Energy, which supplies the Victorian market from gas fields in the Gippsland and Otway basins, said gas demand has been growing “at a rate people didn’t expect”, while supply remains tight due to underinvestment. , with only a handful of producers in the southeast.

Load

“That pushes prices up,” he said.

Maxwell said a large coal seam gas project in Queensland needed the scale associated with international export markets to make economic sense, making it difficult to segregate gas for domestic use.

“There was a greater gas shortage prior to the development of the coal seam gas industry for LNG and Queensland,” he said. “Coal seam gas for LNG and Queensland has brought more supply to market.”

Federal Energy Minister Chris Bowen said Australia’s energy market had been ravaged by climate chaos and a decade-long delay, claiming the former government had abandoned a “gas fire” rather than a gas-led recovery.

He said it had been agreed to help AEMO manage gas supply shortages on peak days by enabling it to better utilize storage, ahead of a broader package of gas market proposals.

Bruce Mountain, director of the Victorian Center for Energy Policy.Credit:Wayne Taylor

The acting chief executive of the Australian Petroleum Production and Exploration Association Damian Dwyer said gas production was at record levels.

“Production is at record levels to cater to extraordinary gas demand during the recent energy grid stress when coal and renewable power generation stalled and gas ramped up to save the day,” said Dwyer.

On Wednesday, D’Ambrosio told the Australian Strategic Business Forum that Victoria is a net exporter of gas and supply issues are a national issue that requires long-term reform.

D’Ambrosio said he welcomed AEMO’s intervention and said energy companies that prioritized exports were to blame for the shortfall.

Queensland Energy Minister Mick de Brenni said his country was doing the heavy lifting on the national energy market.Credit:Attila Csaszar

Alinta Energy chief executive Jeff Dimery said Australia’s east coast should implement a gas reservation policy similar to Western Australia’s given the recent challenges to gas supply.

He said energy policy in Australia had been “in shambles” for nearly 20 years, leading to the uncertainties and problems the electricity and gas supply experienced in recent months.

“We have the view that this is possible, to be honest,” Dimery said.

The Morning Edition of the Newsletter is our guide to today’s most important and interesting stories, analysis and insights. Register here.

#Victoria #demands #action #prevent #gas #supply #crisis