More than 260PJ of gas will be made available between 2023 and 2033, the Federal Government has announced, thanks to two new enforceable supply commitments under the Gas Code of Conduct exemptions framework.
The commitments, made by Esso and Woodside, are expected to be sufficient to power east-coast gas-fired power stations for around two and a half years.
The government said the Gas Market Code is shoring up domestic supply of gas with the new commitments expected to deliver a more reliable energy system.
The government also said it is a critical step for Australian manufacturing and supporting reliability as households and businesses ramp up low-cost renewables.
The announcement comes in addition to commitments made by Senex and APLNG, announced in November 2023, and brings the total volume of gas secured through the Gas Market Code to 564PJ.
The government said gas is critical to supporting reliability and affordability of the increasingly renewable grid by providing peaking and firming. This ensures households and industry can increasingly benefit from downward pressure on wholesale electricity prices that solar is already bringing.
The supply commitments are expected to feed into southern demand centres, previously identified as being at particular risk of seasonal shortfalls, which the government said will ensure there is sufficient domestic supply to keep the downward pressure on gas prices.
Other exemption applications under the Gas Market Code are also being assessed, including the mandatory Gas Market Code of Conduct which came into force in July 2023 and is expected to be reviewed by 2025.
Federal Minister for Climate Change and Energy, Chris Bowen, said, “We know that gas is critical to supporting a lower-cost, more renewable grid as ageing coal exits, and to support Australian manufacturing – which is why we’ve delivered this code to shore up energy reliability and affordability after a decade of chaos.
“The Albanese Government’s Gas Code has now delivered commitments for gas supply that’s equivalent to what is needed for powering east-coast gas power stations for five years,” Mr Bowen said.
Federal Minister for Resources, Madeleine King, said, “Gas is essential to supporting the nation’s energy grid and the reliable supply of gas is crucial to keeping energy prices down for households and businesses.
“Gas is our insurance policy for the energy grid as we move to cleaner and greener renewables.
“Gas is also indispensable in the processing of critical minerals and technologies such as wind turbines and solar panels.
“Importantly, this agreement underlines the continued importance of the Bass Strait in supplying and supporting the east coast energy network,” Ms King said.
