New AEMO gas projections out: Our report passes the test of time.

Australian on Short lived gas shortfall

Passing the test of time...

Just in case you missed it. AEMO put out their new gas demand and supply projections, called "2018 Gas Statement of opportunities", also reported in today's Australian. Remember the times that our last year's report "A short lived gas shortfall" by Tim Forcey and Dylan McConnell created a bit of a stir? Well, feels good to largely pass the test of time as our last year's report foreshadowed some of this year's numbers.

A short-lived gas shortfall

Authors: Tim Forcey, Dylan McConnell

Abstract: With the publication of the 9th March 2017 Gas Statement of Opportunities (GSOO), the Australian Energy Market Operator (AEMO) cautioned that within 18 months, “shortfalls” of gas supply could lead to shortfalls in the supply of electricity generated by burning gas. AEMO suggested solutions to potential shortfalls that included the construction of new pipelines or Coal Seam Gas (CSG) fields.

Our report investigates AEMO’s gas-and-electricity-system modelling results as well as the communications that followed. We explore reasonable alternate conclusions that can be drawn by analysing AEMO’s published modelling inputs, assumptions, and results, and by contemplating future real-world events.

We find that although a “gas-price crisis” exists in eastern-Australia, a gas-supply shortfall is very unlikely to occur. Our review finds that the size of AEMO’s forecast shortfall is very small, amounting to no more than around 0.2% of annual supply.
In addition, only eleven days after announcing its supply-gap concerns, AEMO essentially closed the gap when it published, on its website, updated (lower) electricity-demand forecasts that therefore lead to less demand for electricity generated by burning gas.
In this report we also consider alternative solutions to gas shortfalls, and find that there is no need to expand gas-supply infrastructure.
The full report can be downloaded here.