Energy reports
Small and getting smaller - The future of gas use for electricity in Australia
Year - 2024 Partners - Solutions for Climate Australia and Labor Environmental Action Network
The true role of gas for electricity generation is limited and diminishing.
Current trends and future demand scenarios modelled by the Australian Energy Market Operator (AEMO) and others, exposes a sharp fall in Australia’s need for gas-fired electricity generation as a ‘transition fuel’ in the shift from coal to renewable energy.
This is already playing out in practice, Gas use for Power Generation (GPG) peaked in the National Electricity Market (NEM) in 2014 and has been falling ever since, hitting a record low in Q4 2023. Western Australia has also seen a more gradual decline in the South West Interconnected System (SWIS) since GPG peaked in 2009.
Forecast scenarios on future gas demand conducted by AEMO have indicated that gas use in our electricity system will continue to decline in all modelled scenarios and will likely reach half of current usage in 2042.
The report provides a clear and concise summary of the quantity of gas that will be required for electricity generation in Australia over the coming years based on official guidance.
While there will be a role for existing gas-peaking plants in the medium term to provide firming capacity at times, the emergence and maturation of new technologies such as long duration battery storage and alternative liquid fuel solutions that are capable of providing long duration storage and firming services, may see gas consumption fall even faster than current forecasts indicate.
