The Australian Energy Market Operator (AEMO) has released its 2025 Gas Statement of Opportunities (GSOO), emphasising the critical need for governments and industry to fast-track new gas supply projects to address looming shortfalls in Australia’s east coast gas market.
While the report shows an improved supply-demand outlook, deferring forecast seasonal and structural shortfalls by a year, it underscores the urgency of investment to ensure long-term energy security.
AEMO forecasts peak day shortfalls in southern states from 2028 and structural supply gaps emerging from 2029 unless new supply developments are expedited.
Chief Executive Daniel Westerman reiterated that flexible gas-powered generation remains essential as a backstop for Australia’s transition to a high-renewable power system.
AEMO projects annual gas demand for power generation to more than double by 2044 in its Step Change Scenario, with peak day demand quadrupling to support renewable energy reliability.
Samantha McCulloch, Chief Executive of Australian Energy Producers, stressed that the GSOO makes clear there is “no room for complacency”.
She called on governments and regulators to remove barriers to new gas supply investments, highlighting that committed and anticipated developments are vital to minimising risks of shortfalls.
McCulloch also noted the recent $350 million investment by Gippsland Joint Venture partners Woodside Energy and Esso Australia as a positive step but emphasised that additional projects are urgently needed.
The report reflects structural changes in gas consumption patterns, with residential and commercial demand declining due to electrification and higher retail prices.
Industrial demand remains stable, but production from key sources like Bass Strait is depleting faster than demand, reinforcing the need for new supply fields and infrastructure.
AEMO suggests that uncertain southern supply developments could delay annual supply gaps until 2034 if expedited, mitigating risks of peak day shortfalls.
Energy experts have welcomed AEMO’s acknowledgment of declining residential and commercial gas demand but caution that industrial decarbonisation opportunities remain underexplored.
Analysts argue that accelerating electrification initiatives could further reduce demand and alleviate pressure on domestic gas markets.
While the improved outlook defers immediate risks, industry leaders warn that the long lead time for major energy projects requires urgent action now.
Governments must prioritise regulatory reforms and investments to ensure reliable and affordable energy for Australian homes and businesses in the years ahead.
