Australia’s gas market is now under review by the Federal Government, aiming to ensure the country secures long-term access to affordable gas while maintaining its reputation as reliable export partner.
The Government said it will take a comprehensive and methodological look at the key measures that have safeguarded the nation’s energy supplies in the energy transition.
The review will also help deliver the Federal Government’s Future Gas Strategy, which spells out the role gas will play alongside renewables, batteries and pumped hydro in securing Australia’s energy future, while also supporting the nation’s trading partners as they work towards net-zero commitments.
The announcement comes as the ACCC has released its latest gas inquiry report, confirming that structural shortfalls on the east coast are still projected from 2028, unless new gas supply is brought online.
The Federal Government said it has secured 644PJ of enforceable supply commitments for domestic gas under its mandatory Code of Conduct, which came into effect in 2023.
With this review, the Federal Government said it is working towards ensuring Australia’s gas market and the regulations which govern it are fit for purpose and deliver in the national interest.
As part of the review, the government will consult with industry, stakeholders and the public on the following instruments:
- The Australian Domestic Gas Security Mechanism (ADGSM)
- The Gas Market Code
- The Heads of Agreement with major east coast gas exporters
The Federal Government is examining whether these instruments can be improved and strengthened to ensure sufficient affordable gas supply in the longer term.
A key objective of the review will be to consolidate and streamline these instruments and create a long-term stable regulatory environment while supporting domestic energy security and affordability.
The Federal Government said it will also consider the role of the various market bodies, and how best to encourage sustainable investment that improves the supply outlook and puts downwards pressure on prices.
The terms of reference, consultation paper, and information on how to make a submission for the review are available here.
Chris Bowen, Federal Minister for Climate Change and Energy, said gas has an important role to play in the energy system as Australia transitions towards 82 per cent renewables.
“Unlike coal, gas power generators can be turned on and off in a couple of minutes – providing the ultimate backstop in our energy grid,” he said.
“It’s critical that we use this review get the settings right in our gas market, ensuring we are securing affordable Australian gas for Australian use, while remaining a reliable energy exporter and delivering lasting energy security in our region.”
Madeleine King, Federal Minister for Resources and Northern Australia, said, “Our gas market settings have evolved over time and in response to a crisis of supply or price, or both, so the intent of this review is to carefully examine how our gas policies work for our economy as part of our energy transition.
“The gas market review aligns with implementation of the Future Gas Strategy and underpins the government’s commitment to ensure householders and businesses can continue to have access to adequate supplies of affordable energy.”
“At the same time, Australia has an important reputation as a global supplier of energy and a key partner in ensuring energy security in our region, helping our trading partners to achieve their net-zero commitments.
“The review will also examine potential ways to attract more sustainable investment into the Australian industry to support jobs and our economic wellbeing.”
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