Gas forecast deflates industry’s expansion pitch

Short-term gas availability has improved, according to the annual Gas Statement of Opportunities (GSOO) that is developed with updated inputs from industry and issued by the Australian Energy Market Operator (AMEO).

Gas consumption was in decline across most sectors, influenced by higher retail prices, mild winters, and increased electrification, the GSOO found. This, with changes in electricity generation outlooks, pushed expectations of gas shortfalls on days of peak use out by three years to 2028 compared to the previous forecast.

The delayed closure of Origin Energy’s ageing Eraring coal-fired power plant in NSW to 2027 at the earliest, with extra maintenance and operating costs bankrolled by the state’s taxpayers, materially cut forecasts of gas demand.

In the longer term, residential and commercial consumption was forecast to decline, while industrial consumption was expected to remain relatively stable.

“Flexible gas-powered generation will remain the ultimate backstop in a high-renewable power system,” AEMO Chief Executive Daniel Westerman said.

Expert view - Energy transformation specialist Mark Twidell

And in Victoria?

AEMO also published the 2025 Victorian Gas Planning Report (VGPR), a five-year assessment of the gas supply and demand balance in a state going electric.

Forecast 2025 Victorian production has fallen by 13% to 257 petajoules compared to a year earlier. Production was forecast to reduce 37% during the outlook period to 162PJ in 2029.

Batteries go mega in WA’s bumper first tender under CIS

The whopper Boddington Giga Battery that PGS will pair with a solar farm, Atmos Renewables’ Merredin Big Battery, Neoen’s Muchea Battery and Frontier Energy’s Waroona Renewable Energy Project have successfully bid for support in Western Australia’s first tender under the Capacity Investment Scheme.

“Now, this is absolutely vital for ensuring reliability of our energy system as we undertake renewable transformation,” Energy Minister Chris Bowen told reporters in Kwinana.

“Importantly, these projects will be scheduled for 2027. Western Australia needs more electricity now – not in 2037 and the 2040s when nuclear plans may or may not actually become a reality – but now.”

The projects will supply WA’s grid with an extra 654MW of capacity. ​​The tender, launched in September 2024, was originally designed to bring on 500MW of new storage projects in the state. Why? To reduce the wholesale cost of electricity and boost reliability across the state’s Wholesale Electricity Market.

Interest from developers was exceptionally strong, Bowen said, with initial bids for projects to deliver nearly seven times more capacity than tendered, resulting in the government being able to secure more storage than originally planned.

What’s next?

The next WA tender for generation and storage is scheduled for mid-year, with consultation now open for feedback on tender design.

D’Ambrosio debunks ‘false claims’ on Yallourn extension

Victoria’s Minister for Energy and Resources Lily D’Ambrosio confirmed that Yallourn Power Station, owned by EnergyAustralia and located in Latrobe Valley, would close in 2028.

Debunking a “lie” that it would stay open an extra four years, D’Ambrosio said The Australian had falsely claimed that EnergyAustralia, the Victorian Department of Energy Environment and Climate Action (DEECA) and the Australian Energy Market Operator (AEMO) held talks about extending operations of the coal-fired plant beyond 2028.

DEECA, AEMO and EnergyAustralia confirmed that the claims are wrong. They also confirmed that no such discussions have occurred and nor have there been “rolling talks”, D’Ambrosio said.

EnergyAustralia said it had reaffirmed, multiple times, the closure of the Yallourn power station by 2028. “We have committed to net zero by 2050 and closing Yallourn by 2028 is part of that commitment.”

Actionable insight:

• Beware “unnamed sources”.

Expert view - ITK Principal David Leitch

CATCH UP

The Australian Renewable Energy Agency (ARENA) announced the first recipient from its Hydrogen Headstart Program, with $814 million allocated to Copenhagen Infrastructure Partners’ 1500MW Murchison Green Hydrogen Project in Western Australia. The funding is a reduction-based credit that can offset income tax for the first ten years of operation to bridge the gap between current production costs and what the market is willing to pay, Boiling Cold explained.

Visiting WA, federal Energy Minister Chris Bowen announced a grant for a local manufacturer of silicon, a key component of solar panels, to slash their emissions. Under the Powering the Regions Fund, Simcoa Operations will receive $39.8 million to expand charcoal production at its Wellesley facility and remove the use of coal in silicon making. The grant is part of the third batch of the fund’s $600 million Safeguard Transformation Stream, which subsidises heavy emitters to meet Safeguard Mechanism requirements.

Victoria moved forward with its bill to extend its energy upgrades program to 2045. As part of the legislation, the government will also remove the requirement for energy efficiency certificates to be created by 31 January for the previous calendar year, which it says will reduce demand. Consumer group the Energy Savings Industry Association argued the program should upgrade its core objective to include reducing electricity peak demand. “AEMO’s gas statement of opportunities released today gives Victoria good reason to run with its proposed building electrification regulations with the VEU to financially support energy customers to get of gas,” it said in a statement.

NSW introduced legislation to encourage producers to take greater responsibility for the lifecycle of lithium-ion batteries. If passed, the Act could require battery suppliers to register battery products to ensure safe disposal or recycling through dedicated collection points along with enhancing battery design, importation, and storage to improve safety and recyclability.

Trump pushed an energy dominance agenda in a meeting with US oil and gas executives (Reuters).

Market data shows China has all but stopped importing US oil and natural gas since the Trump administration took office (Politico).

US battery developer Pacific Green finalised the sale of its Limestone Coast North project to Palisade Group’s Intera Renewables in a deal worth $460 million. Commercial operations on the project are expected to begin in February 2027.

A partnership between Abu Dhabi-based wealth fund ADQ and US equity investor Energy Capital Partners will invest US$25 billion in projects to power data centres and other industrial consumers. (Axios).

China's Commerce Ministry has delayed approving car and battery maker BYD's planned Mexico factory over concerns tech will leak to American rivals, the Financial Times reported (Gizmodo).

UK regulator Ofgem said it would fast-track £4 billion of investment in transmission projects with a new "Advanced Procurement Mechanism" allowing transmission owners to buy essential equipment – such as switchgear, cables and steel – years in advance, instead of waiting for full project approval. It said the concept could be extended in the future to support other areas of infrastructure development.

Climate Change Authority boss Matt Kean is at war with the Liberals, but some see a way back. (AFR)

As the debate over potential gas shortages continued to heat up, AEMO established a new ‘Policy & Corporate Affairs’ division which it said would be accountable for government and stakeholder relations, communications and media, along with strategic reform for both electricity and gas. The division will be led by Violette Mouchaileh, former EGM of reform delivery. AEMO said the new division would “enable closer collaboration between strategic market reform and the engagement and communications functions”.

Research

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The World Meteorological Organization (WMO) warned in its latest State of the Global Climate that it would be impossible to keep warming below 1.5°C without immediate and deep emissions reductions across all sectors and regions. The report confirmed 2024 was likely the first calendar year to be more than 1.5°C above the pre-industrial era. It was also the warmest year in the 175-year observational record, beating the previous record set only the year before. But individual years exceeding the Paris Agreement number did not mean the goal was out of reach, WMO said.

Researchers from the University of Texas at Austin examined the economic costs and benefits of installing dozens of small modular reactors at recently retired coal power plants as part of a “coal to nuclear” transition. They found while cost savings from reusing coal power plant assets were significant, cost competitiveness depended on federal energy tax credits.

Net zero

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The Science Based Targets Initiative kicked off consultation on its revised Corporate Net Zero Standard which it said would tackle barriers to action on scope 3 emissions and make it easier for companies in emerging economies to set targets. Under the standard, net zero targets by companies must be aligned with pathways limiting global warming to 1.5°C. Origin Energy was the first Australian company to commit to the targets in 2017, but by 2021 fell short of the standard because of its ongoing commitment to gas production.

What's on

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Strategist Viktor Shvets, Queensland Treasurer and Energy Minister David Janetzki, and Co-CEO of Responsible Investment Association Australasia Estelle Parker will speak at the 2025 Impact Investment Summit on March 26-27.

Peter Nattrass, Principal Industry Development in the South Australian Department for Energy and Mining will speak alongside James Choi, Honorary Ambassador for Foreign Investment Promotion at the Korean Ministry of Trade, Industry and Energy at the Green Iron and Steel Forum in Perth on March 26. Fortescue General Manager Strategy Tijana LaBianca will deliver the keynote address.