Australia proposes a gas-led recovery plan from the coronavirus recession
The Australian government has presented a plan to boost gas supply and reduce energy prices, promising a “gas-led recovery” from the coronavirus recession. The authorities intend to reset the east coast gas market and to create a more competitive and transparent Australian Gas Hub, along with a voluntary industry-led code of conduct for gas producers and consumers. To improve gas supply, five gas basins should be unlocked, starting with the Beetaloo Basin in the Northern Territories and the North Bowen and Galilee Basin in Queensland. The government plans to set up new gas supply targets with states and territories and to enforce potential “use-it or lose-it” requirements on gas licenses. It will conclude new agreements with three east coast LNG exporters to avoid any supply shortfall in the domestic gas market and assess options for a potential gas reservation scheme that would ensure secure gas supply and reasonable prices for Australian gas users. The government also wants to boost the gas transport network by reforming the regulations to promote competition and transparency. The government plans to identify priority pipelines and critical infrastructure as part of an inaugural National Gas Infrastructure Plan (NGIP) and could step in if the private sector doesn’t invest.
In addition, the Australian authorities are setting a target for the electricity sector to deliver 1,000 MW of new dispatchable energy to replace AGL Energy’s Liddell 1,690 MW coal-fired power plant before it closes in 2023. If the private sector doesn’t reach a final investment decision (FID) to replace Liddell’s capacity by the end of April 2021, the government will back a new gas power plant in the Hunter Valley to prevent blackouts. The state-owned power utility Snowy Hydro is developing options to build a gas generator in the Hunter Valley at Kurri Kurri. As of September 2020, gas accounts for 24% of Australia’s installed capacity, with 18 GW.
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