The golden age of gas is over before it started

By Giles Parkinson

The golden age of gas is already over – eaten by solar and wind and its own soaring costs. AEMO says gas-fired production could fall by two thirds over the next five years, as export parity prices it out of market and it is displace by renewables.

The one bright spot might be the potential of gas to replace coal generation in a decade’s time.

So much for the “golden age of gas”. The Australian Energy Market Operator predicts that gas-fired generation in this country will be almost obliterated over the next five years, falling by two thirds as export parity prices it out of the electricity market, and as renewables such as wind and solar take a greater share.
AEMO is forecasting dramatic falls in the amount of gas-fired generation in the country’s electricity market, with falls of up to 27 per cent predicted in some states. In its first gas forecasting analysis – says overall gas production in Australia will rise because of the LNG export boom in Queensland. But the price surge that this has caused means domestic gas consumption (including in homes and businesses) will fall by at least 5.2 per cent a year, and gas-fired generation will fall at least 16.8 per cent a year.
In some states, the fall in gas-fired generation will be up to 27 per cent a year of soaring gas prices and competition with renewables. In Tasmania, gas-fired generation could virtually disappear altogether. In South Australia, it will also fall dramatically despite a high reliance on wind and solar.

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