by Phaedra Deckart, General Manager, Energy Supply and Origination, AGL
In a rapidly evolving energy market, AGL’s Phaedra Deckart argues that gas has a critical role to play as we transition to future fuel sources that are clean, reliable and affordable.
Energy is an industry in great transition, moving towards reliable power for customers that’s lower cost and lower carbon.
At AGL, we believe that gas will play a critical role in this transition.
Right now, we have $1.9 billion worth of energy supply projects under development, with a further $1.5 billion subject to feasibility.
These projects range from upgrades to our existing sites to new renewables projects. Three are gas projects worth $945 million, which we see as playing an important role in this transition period to ensure clean, reliable and affordable electricity.
There are several reasons why we believe gas is critical in the transition. Firstly, it’s the most cost-effective way to ‘firm-up’ renewable sources like solar and wind power.
Renewable energy is now the cheapest form of new-build generation in Australia, so firming it up cost-effectively is critical for energy affordability.
It’s also accessible – whether that’s from domestic resources or through LNG imports – and it’s flexible, and is the cleanest burning fossil fuel.
There’s the availability of the existing large gas storage and pipeline networks, particularly in our southern states, which can manage the variability in demand.
These assets, along with potential future storage associated with LNG import projects, can provide the necessary capacity to meet the growing peak summer gas demand requirements.
Gas-fired power generation has proved to be a relatively lower cost, low emissions source of synchronous generation, and has provided critical network stability, along with other technologies.
We understand that gas is only a medium-term fuel, and while some would like us to jump straight to battery storage and large renewables, we need a reliable supply of lower emission fuel to generate the firming capacity needed while battery costs continue to decline.
Most pressing is access to gas, which was backed up by the Australian Energy Market Operator’s report recently released at the end of March, which is forecasting a gas shortage from 2024 without a new source of supply coming to market, and which shows that the east coast will see tight supply from 2021.
AGL supports initiatives that bring more supply and a diversity of suppliers to the market, including domestic gas resource development and potential imports of gas and LNG.
To facilitate this, we support State and Federal Governments in making informed policy decisions based on scientific evidence to ensure that necessary development and investment can occur while also protecting our environment.
A stable regulatory environment is also important to facilitate investment in energy and ensure Australians have access to reliable, clean and affordable energy in the years ahead.
We also believe another significant factor is increasing the depth and liquidity in gas markets, and growth in gas forward markets, as a way of managing risk, offsetting potential price volatility with increasing linkage between electricity and gas markets.
Clearly, there are challenges to address, but we believe the benefits for customers and Australia’s productivity are clear and gas provides an important way of transitioning to a clean, cost-effective and reliable power.
Phaedra Deckart is a senior executive with over 20 years of experience in the global energy sector. She began her career in law before she transitioned seamlessly to the oil and gas industry upon joining Santos Limited, where she held a variety of commercial, corporate, gas and LNG marketing positions.
Phaedra’s career at AGL has traversed leading AGL’s wholesale gas supply portfolio as Head of Wholesale Gas and now as General Manager, Energy Supply and Origination. Phaedra leads the transformation of AGL’s energy supply portfolio through this dynamic time in the energy market.