AEMO’s latest analysis finds that gas supply in Western Australia (WA), from existing and prospective gas projects, is expected to provide sufficient domestic resources to meet forecast demand and fulfil future gas contracts over the next ten years.
Published today, the annual report provides an independent assessment of the WA domestic gas market over a ten-year outlook period from 2020-2029, an overview of gas infrastructure, and emerging issues affecting the gas industry.
“Continued progress by industry on the development of gas projects and enhancements of AEMO’s modelling assumptions in the 2019 WA gas statement of opportunities (GSOO) have delivered an improved outlook for the west coast gas supply-demand balance, reducing concerns of a supply shortfall over the next ten years,” said AEMO’s Executive General Manager WA, Cameron Parrotte.
“This year, with input from industry AEMO updated our assumptions about reserve depletion rates at existing production facilities, which has eliminated the small 2021 shortfall we had in last year’s forecasts. So, despite an expected annual 1.5% decline of gas supply over the outlook period, the report finds that ample domestic gas supply will be available, albeit investment decisions are still required on prospective projects to enter the market from 2022, including Browse, Scarborough, and West Erregulla.”
A positive outlook for major gas-consuming projects and commodities is expected to lift gas demand as global appetite for battery-related projects, including lithium, cobalt, and nickel, will drive demand growth at an estimated annual rate of 1.2%.
While this annual growth may bring supply and demand into balance, we anticipate projected investment will ensure that existing operations and projects in the pipeline continue to be supported with sufficient domestic gas resources over the outlook period.
The WA GSOO again highlights the interdependencies between the domestic electricity and gas markets, with additional renewable energy generation expected to influence gas demand for gas-powered generation (GPG).
“With an additional 528 megawatts of variable large-scale renewable energy capacity under development and rooftop PV forecast to be at 1504MW by 2021, the continued uptake of large-scale and behind-the-meter solar generation, is displacing GPG in the short-term in the South West Interconnected System (SWIS). However, we anticipate the retirement of the Muja C facilities by end of 2024 will result in a 15% increase in gas demand for GPG by 2029,” said Mr Parrotte.
AEMO will continue to work closely with market bodies, industry and governments to progress developments that will enable an affordable, reliable, and secure energy system for Australian energy consumers now and into the future.
To unpack the WA GSOO in even greater detail, we have AEMO's GM of WA Markets, Martin Maticka, Neetika Kapani (Manager, Reserve Capacity) and Rebecca Petchey (Principal in the Reserve Capacity team) discussing the report in the podcast below.