About the ECGS
East Coast Gas System
The east coast gas system includes the facilities, systems and markets operating within an east coast jurisdiction, which includes all states and territories except for Western Australia. This includes the:
Declared Wholesale Gas Market (DWGM) in Victoria in which AEMO is both the transmission system operator and market operator;
Short Term Trading Market (STTM) hubs at Sydney, Adelaide and Brisbane where AEMO is the market operator;
Gas Supply Hub (GSH) at various locations where AEMO operates a gas trading exchange; and
gas industry facilities and stakeholders participating in the various markets.
AEMO operates the capacity trading platform and day ahead auction (DAA) of contracted but un-nominated capacity on designated pipelines and compression facilities in the east coast gas system.
The AEMO-operated Gas Bulletin Board (GBB) aggregates and displays data on gas production and flows across the east coast gas transmission system.
Roles and Responsibilities
AEMO has a defined role in each of the gas markets as summarised in the section above. In response to the projected supply shortfall in the south in 2023 and the heightened susceptibility of the gas markets to reliability and supply adequacy threats, Energy Officials developed and implemented a framework extending AEMO’s powers and functions.
The National Gas (South Australia) (East Coast Gas System) Amendment Bill 2023 and Part 27 of the National Gas Rules provide AEMO with east coast gas system reliability and supply adequacy powers and functions. Stage 1 East Coast Gas System (ECGS) reforms extend AEMO’s powers and functions to provide it with tools to monitor, signal and manage supply shortfalls in the east coast gas market in winter 2023:
Transparency: New and existing participant disclosure obligations to enable AEMO to assess the likelihood of risk or threat to the reliability or adequacy of gas supply in the ECGS.
Signalling: Establishing a register of contacts to communicate information about risks or threats, including the ability to hold conferences.
Directions: AEMO can give directions to gas industry participants to resolve an identified risk or threat. This includes an interim compensation framework.
Trading: AEMO can trade in natural gas to maintain or improve the reliability or adequacy of gas supply in the east coast gas system. AEMO must establish a $35 million trading fund.
This function also replaced the Gas Supply Guarantee which was a mechanism developed by the gas industry in March 2017 to make gas available to meet peak demand periods in the National Electricity Market.
AEMO’s East Coast Gas System role will integrate with other functions including:
The Gas Statement of Opportunities (GSOO) which provide AEMO’s forecast of annual gas consumption and maximum gas demand, and reports on the adequacy of eastern and south-eastern Australian gas markets to supply forecast demand over a 20-year outlook period; and
AEMO’s Victorian role as operator of the Victorian gas Declared Transmission System (DTS) which requires AEMO to prepare and publish the Victorian Gas Planning Report (VGPR). The VGPR provides a supply and demand, and pipeline capacity adequacy assessment for the Victorian DTS over the next five years. Registered participants in the Victorian Declared Wholesale Gas Market (DWGM) provided AEMO with forecast information for the VGPR. AEMO must keep this forecast information confidential. The VGPR provides forecast information for the total system and by system withdrawal zone, as required by the NGR.
The East Coast Gas System reforms effectively expand AEMO’s role from identifying long term gas supply adequacy and reliability issues under the GSOO into the same short to medium term identification of gas supply adequacy and reliability assessments as are provided in Victoria under the VGPR and as part of the Victorian DTS operator role.
To reduce the risk of supply disruptions, AEMO reviews and assesses the maintenance plans for Producers, Storage Providers and Transmission Pipeline Operators that supply and transport gas to East Coast Gas System. The process is to assists AEMO to meet its obligations to coordinate all maintenance planned by DWGM facility operators under National Gas Rule (NGR) 326 and the Wholesale Market Maintenance Planning Procedures (Victoria). Participation in this process has been expanded, on a voluntary-basis, to non-DWGM facility operators to assist AEMO to identify conflicting maintenance that adversely impacts East Coast Gas System supply.
After these plans are reviewed by AEMO, each BB facility operator incorporates this maintenance plan into their Medium Term Capacity Outlook data which is reported on the Gas Bulletin Board.