The federal government has announced over 260 petajoules (PJ) of gas will be made available between now and 2033 through two new enforceable supply commitments with Esso and Woodside under the Gas Code of Conduct exemptions framework.
This should be sufficient to power east-coast gas-fired power stations for around two and a half years.
“We know that gas is critical to supporting a lower-cost, more renewable grid as aging 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,” Minister for Climate Change and Energy Chris Bowen said.
“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.”
This announcement is in addition to the commitments made by Senex and APLNG announced in November 2023 and brings the total volume of gas secured through the Gas Market Code commitments to 564 PJs.
“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,” Minister for Resources Madeleine King said.
“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.”
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 announced will directly feed into southern demand centres previously identified as being at particular risk of seasonal shortfalls and 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.
The mandatory Gas Market Code of Conduct came into force in July 2023 and will be reviewed no later than 2025.