The Federal Government is listening. The recent release of legislation to establish a Domestic Gas Reservation Scheme reflects extensive engagement and consultation with industry stakeholders.
The draft provides more certainty for gas users and producers alike - a market condition that will be essential to supporting the development of the additional gas supply that’s vital to meet the requirements of the domestic market and our international trading partners.
These reservation arrangements couldn’t come soon enough, removing the uncertainty that has been created by a period of significant government intervention over the last 10 years – intervention the ACCC agues could have unintentionally increased the risk of domestic gas shortfalls when Australia has been most vulnerable.
There’s clearly a lot at stake for Australia’s energy market as this policy is finalised.
Australia’s Energy Minister Chris Bowen recently acknowledged: “Gas will be a crucial energy source as we transition to renewables.”
Indeed, gas will be needed for the long-term, well beyond 2050, to support energy security, help power Australian industry and provide the firming capacity needed to support the introduction of renewables as coal-fired power stations retire.
Liquefied natural gas is also one of the country's most valuable exports. It provided the strategic currency that helped underpin access to imported liquid fuels during the recent energy crisis in the Middle East.
It was a reminder that we can never lose sight of the critical role that gas plays, not only for Australia’s prosperity, but the prosperity of our resource constrained Asian neighbours.
Other analysts believe this is a conservative estimate because it doesn’t yet account for the likely growth in energy demand to support new data centre developments. New data centre development will be renewables-led, but will also require firming solutions such as batteries and gas-powered generation.
We know that batteries are playing an increasing role, stepping in to manage evening peak energy demand. Batteries will continue to play an important role in our energy system. Batteries are excellent at managing short-term interruptions in our energy system and providing short-term storage solutions. But batteries can’t deliver the long duration energy storage required when the sun doesn’t shine and the wind doesn’t blow for extended periods.
We saw this play out in June during a multi-day wind drought across South Australia.
The state’s grid-scale batteries stepped up on the first evening, but were discharged within hours and had nothing left to give. It was gas-powered generation that stepped up for the following four days, doing the heavy lifting to fill the gap and keep the lights on.
APA is an advocate for gas.
But, first and foremost, we are an advocate for energy security, reliability, affordability, and decarbonisation.
We’re supporting the decarbonisation of Australia’s key industries through projects like the Sybella Creek Solar and Battery Project, which will power a key customer in the resources sector and support energy security, reliability and affordability in Mount Isa.
We’re also expanding our east coast gas pipelines to address projected gas shortfalls in Victoria later this decade, delivering more capacity to transport northern gas to southern markets.
And we continue to progress the pipeline infrastructure that can unlock the Beetaloo for the benefit of domestic and regional markets and are building new gas-powered generation projects to firm renewables, including the Brigalow Peaking Power Plant in partnership with CS Energy in Queensland.
APA’s getting on with building Australia’s energy infrastructure.
We’re doing this because we have confidence that governments are now listening, creating the policy settings that encourage investment. Investment that will deliver energy security, reliability, affordability and decarbonisation.
