Oil and Gas News

AEMO backs future role of gas-powered generators

As coal-fired generation move towards retirement, the role of gas-powered generators (GPG) is forecast to increase, according the Australian Energy Market Operator’s (AEMO) Integrated System Plan (ISP).

Highlighted in the ISP, when high renewable output and high demand is occurring, GPG is needed to meet the demand peaks just after sunset, and to keep going through the night to cover shallow storages that may not have had an opportunity to fully charge during the day.

However, during weeks with high renewable output and low demand, GPG is barely needed.

Australian Pipelines & Gas Association (APGA) chief executive officer Steve Davies said gas-fired power generation would be important for the national electricity market and Australia’s future electricity supply.

“As we saw during the recent record-breaking summer, gas-powered generation can be relied on to dispatch electricity when and where it is needed, each and every day,” Davies said.

Davies added that on 40-degree days, gas-powered generation frequently provided more than 70 per cent of South Australia’s electricity supply and up to 25 per cent of total supply in the national energy market.

“The ISP makes clear that greater renewable penetration will increase the need for availability of a portfolio of flexible generating technologies,” Davies said. 

“As we see already in South Australia, with Australia’s highest level of renewables, gas is an outstanding partner to manage sudden changes in the supply and demand balance or weather variability.”

Outlined in the report, as more coal-fired generation retires, and is replaced by variable renewable energy (VRE), production from existing GPG is forecast to rise again, with it being more cost-effective to increase generation from existing GPG to compensate for low-renewable conditions than to invest in new deeper storages.

In addition, the confidence in GPG as an investable and dispatchable energy resource also depends on there being reliable, affordable gas fuel.

AEMO highlighted in its report that gas supplies are already tightening in Australia, with southern supply from existing and committed gas developments forecast to reduce by more than 35 per cent over the next five years.

As gas fields cease production between mid-2023 and mid-2024, gas supply restrictions and curtailment of GPG may be necessary, particularly during peak winter days.

“To avoid this, southern Australia will need to either develop new local sources (and pipeline infrastructure), progress liquified natural gas (LNG) import terminals or address pipeline limitations from northern Australia,” AEMO outlined.

“ISP modelling forecasts approximately 120 petajoules (PJ) to 285 PJ of additional gas will be needed each year between 2024-25 and 2036-37 to meet residential, commercial and industrial gas demand, gas for LNG export, and gas supply for GPG.”

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