Australia's east coast could see shortages of natural gas as early as in 2027 unless more supply is made available soon, the Australian Competition and Consumer Commission (ACCC) said in a report on Thursday, adding another warning about the domestic market of one of the world's biggest LNG exporters.
"Long-term solutions to gas market shortfalls will require a range of policy and market responses," ACCC said in its interim Gas Inquiry report, as carried by Bloomberg.
"Amongst these, there is an urgent need to develop new sources of gas production and supply," the watchdog added.
Unless new supply is made available to the populous east coast of Australia, gas shortages could emerge in 2027, a year earlier than ACCC's previous forecast from December 2023 that a shortfall could hit eastern Australia in 2028.
The revised date is due to "lower forecast supply due to delays in anticipated regulatory approvals for new projects and problems with legacy gas fields," ACCC said.
To prevent shortages, Australia may have to redirect supplies earmarked for the spot market to consumers in the east coast, the watchdog said.
ACCC issued today the latest official warning of a possible shortage on Australia's east coast.
The Australian energy regulator, the Australian Energy Market Operator (AEMO), said last month that Australia's east coast could face imminent natural gas shortages due to supply outages and higher gas-fired power demand amid cold weather and unusually low wind generation.
In May, the industry group Australian Energy Producers said that Australia could face a natural gas shortage later this decade without action to boost domestic supply.
Australia's energy producers and utilities are also calling on the government to support the existing natural gas-powered generation as a smooth market mechanism to move to growing shares of renewables in the electricity system. Australia has been closing coal-fired power generation and raising solar and wind power, but without enough baseload generation, it risks power shortfalls and blackouts, industry officials have warned.
By Charles Kennedy for Oilprice.com
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