Major gas shortage with millions of Aussie homes warned they could lose power

Major gas shortage with millions of Aussie homes warned they could lose power 2
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A gas shortage could leave millions of Aussies without heating or power tomorrow night, the energy market operator has warned.

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The concern has triggered a gas supply guarantee by the Australian Energy Market Operator as Australians battle a particularly chilly winter.

AEMO issued a notice on Tuesday saying it had identified a gas supply shortfall ‘trigger event’ for the states of Victoria, New South Wales, South Australia and Tasmania from July 19 to September 30.

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In the short term, gas supplies could falter in the he peak period of between 5.30pm and 7pm on Wednesday night  

The supply guarantee allows the operator to direct Queensland producers to pipe gas south to NSW instead of shipping it overseas, which should free up Victorian producers, where supplies are dangerously low. 

Victorian Energy Minister Lily D’ambrosio said the gas supply guarantee was triggered on Tuesday afternoon, as reserves at a storage facility in the state’s southwest dropped to record lows.

Gas supplies could be cut off to millions of Australians on Wednesday night leaving homes without stovetops, heating, and hot water (stock image)

Gas supplies could be cut off to millions of Australians on Wednesday night leaving homes without stovetops, heating, and hot water (stock image) 

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The Iona gas storage facility in Port Campbell, Victoria has dwindling supply levels due to high demand amid the state’s price cap.

‘That (the guarantee) means they’ll have greater visibility of the sale and supply of gas across the market including Victoria but in other states, to get some transparency here,’ Ms D’Ambrosio told ABC Radio Melbourne.

‘When you’ve got greater transparency in the market, the market starts changing its behaviour, and frankly, the market has been able to get away with too much here.

‘More visibility should mean, as it did in April [when the guarantee was last triggered], that gas goes to where it’s needed.’

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In a letter the energy market operator said the risk of gas outages would remain for the next two months. 

‘AEMO expects the gas supply guarantee and threat to system security mechanisms to need to remain in effect until 30 September 2022 or until gas supplies are sufficient and the threat to gas supply caused by Iona storage inventory depletion has subsided,’ the operator said.

The Iona gas storage facility in Port Campbell, Victoria (pictured) is at record low supplies with AEMO already halting any of its gas going interstate

The Iona gas storage facility in Port Campbell, Victoria (pictured) is at record low supplies with AEMO already halting any of its gas going interstate

Lochard Energy, which owns Iona, said ‘unplanned coal fired generation outages’ and cold weather has increased demand.

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‘It is the case that gas supply and winter peaking capacity are becoming increasingly tighter on the east coast,’ Lochard said in a statement.

‘This year, unplanned coal fired generation outages and especially cold winter weather have led to Iona customers starting to withdraw gas from storage earlier and in larger quantities than usual.’

The state’s price cap remains at $40 per gigajoule, as demand for gas continues to soar globally due to various factors including a significant drop in supply caused by the war in Ukraine.

The latest warning comes after AEMO temporarily halted the entire east coast electricity market in June amid a risk of blackouts.

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In June, AEMO suspended the entire east coast electricity market amid a risk of blackouts as demand spikes and a price cap lowered production (stock image)

In June, AEMO suspended the entire east coast electricity market amid a risk of blackouts as demand spikes and a price cap lowered production (stock image) 

Victorian Opposition leader Matthew Guy says the imminent gas shortage is unacceptable.

‘There are Victorians making a decision, either heating or eating,’ Mr Guy said.

‘That shouldn’t be a choice that people are forced to make but it is when the Labor government bans exploration.

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‘Here’s the alternative – I’ll allow it, I’ll explore it, I’ll open it up so that we’ve got more gas reserves so people can afford to heat their home.’

While acknowledging the energy network is under pressure, Deputy Premier Jacinta Allan said Victoria is a net gas exporter and AEMO’s latest advice is the state has enough supply to met its needs.

‘The energy minister will continue to work closely with AEMO and our gas operators to ensure supply is adequate for Victoria,’ she said

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