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Energy shortfall in eastern Australia could be three times worse than forecast

September 25, 2017

By Paul Homewood



h/t Patsy Lacey



From the Guardian:




Australia’s eastern states face an energy shortfall three times higher than forecast, with gas supply predicted to fall well short of what is needed unless action is taken, potentially meaning further export controls.

The Australian Energy Market Operator has reported next year’s gas supply shortfall could be “higher than expected” which could lead to even higher energy prices for eastern and south-eastern Australia, particularly for industry, which accounts for almost 40% of gas usage.

The Australian Competition and Consumer Commission also warned of a coming shortfall.

The government has a mechanism which would keep more gas onshore for domestic use and earlier this year started the process to enact it.

Labor has been calling on the government to start it up, but although the prime minister, Malcolm Turnbull, said it was “ready to go”, the government needed to make sure it was “fit for purpose”.

“It is a process of careful consultation,” Turnbull said on Monday. “Had we made a determination a week ago, we would have done so on the basis of information which was inaccurate.

“If we are not able to receive the assurances from the industry to our satisfaction and that of the ACCC, then we will impose those export controls.”

Turnbull said states with a moratorium on gas exploration “have failed” and it was “one of the biggest long-term problems”.

In a statement which accompanied its report, Aemo’s chief executive, Audrey Zibelman, said: “Projections of aggregated gas production and LNG gas demand vary, based on market conditions and contracting, indicating a dynamic situation that can change rapidly and warrants continued close attention and monitoring.”

Turnbull said he had spoken to the gas export companies on Monday morning and said “they’ve indicated that they’re committed to ensuring [a shortage] does not occur too”.

“We want to see a plan from them, we want to see a commitment, then we want to be satisfied that it meets the requirements of the ACCC,” he said.

“This is all part of the process that we set out when we set up the gas security mechanism at the beginning of the year.”

Labor has repeatedly called on the government to pull the trigger to enact the export control mechanism but Turnbull said that proved “they have no idea how the mechanism works”.

“They haven’t bothered to get into that sort of detail, too much hard work I suspect,” he said. “The process is going exactly as we planned it to.”

The government has until 1 November to enact the mechanism, which would come into effect on 1 January.



What is intriguing is that both Turnbull and the Labor Party have been falling over themselves in pursuit of renewable energy. Yet now they are desperate for all the natural gas they can get their hands on, even at the expense of export deals.

What makes the whole situation even more laughable is that the AEMO Report lists a number of risks which could make the shortfall even more critical:

1) Less rainfall and contribution from hydro

2) Less wind and contribution from wind

3) Stalled renewable investment

4) Extended coal-fired power plant outages

How they intend to manage when they have got rid of all the coal plants and marginalised gas is anybody’s guess.

  1. Athelstan permalink
    September 25, 2017 10:11 pm

    “How they intend to manage when they have got rid of all the coal plants and marginalised gas is anybody’s guess.”

    A good question and equally pertinent to beg, here, the UK, in this gone green and septic isle.

  2. markl permalink
    September 26, 2017 12:01 am

    Australia is turning into the Venezuela of energy.

    • colin smith permalink
      September 26, 2017 12:17 pm

      Australia is a leader in this green energy policy.
      The UK (and others) can use this* as an example of how not to do it.
      Unfortunately it will instead be used as a rigid template and into the same holes we will be guided as lemmings to a cliff edge.

      *notwithstanding whether it is in any ay necessary of course!

  3. stephen m lord permalink
    September 26, 2017 12:50 am

    Central planning never works as they are or rather the Australian taxpayers are learning the hard way. Let free enterprise do what it does best. PROVIDE GOOD PRODUCTS AT LOW PRICES. But crises allow politicians and their cronies to skim off money for themselves by pretending to fix the problem they created.

  4. Ian permalink
    September 26, 2017 7:23 am

    The UK will show them how it’s done. All they have to do is ask. On BBC’s Breakfast show this morning at about 07:51 BST, it was stated that UK power generation over the summer was 52% low carbon. Excluding nuclear, it was 25%. The interviewer talked to an expert from Sheffield University and managed to avoid asking any difficult questions (well, it is the BBC), so it’s all OK!

    • MrGrimNasty permalink
      September 26, 2017 8:04 am

      Indeed, the waters are muddied with other ‘low carbon’ sources (and some dodgy categorisation) to insinuate that wind/solar are doing the lion’s share/worthwhile.

      Currently solar is giving less than 0.5% of demand and wind less than 4% (at about 10% of all the installed metered windmill capacity!)

      A pointless expensive contribution.

      • Ian permalink
        September 26, 2017 8:12 am

        Nobody told them about the season of “mists and mellow fruitfulness”, which a look outside this morning indicates has started. If I could see the local hilltop windmills, their blades’d be stationary.

  5. September 26, 2017 8:50 am

    ‘How they intend to manage when they have got rid of all the coal plants and marginalised gas is anybody’s guess.’

    They are going to have to learn the hard way if they don’t wise up soon.

    • Gerry, England permalink
      September 26, 2017 12:44 pm

      It may be to our advantage that they don’t manage it and can be a beacon – or not if the power is out – for the stupidity of wind and solar on a large scale.

    • Political Sceptic permalink
      September 26, 2017 1:27 pm

      And there lies part of the problem: government “managing” the electricity supplies. The electricity supplies used to be managed by people who knew what they were doing, but the Al Gore’s and Greenpeace’s of the world convinced the various governments that they could do better.

  6. sarastro92 permalink
    September 27, 2017 2:56 pm

    Sorry. but an energy shortfall in the Green Energy economies is an important cautionary tale for the rest of the world… Germany has among the highest electric power rates in the world and no CO2 emissions to show for it in a decade; Australia having high rates and brownouts/ blackouts…

    Seeing life in the Green world and then the inevitable backlash is a crucial “teachable moment” for everyone else.

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