Australia is facing a gas crisis due to a mismatch between domestic supply and demand in the east coast market, driven by rapid growth in the LNG export market and the absence of a comprehensive national energy policy.
The resulting high energy prices and unfavourable contract conditions have wide-ranging impacts for the Australian economy, particularly for industries reliant on gas. Without any changes, gas prices could continue to rise, leading to negative impacts on industry profitability – potentially leading to closures and job losses.
ClimateWorks’ 2017 analysis found that implementing energy efficiency measures and fuel shifting could reduce demand for gas by 321 PJ across the country in 2030 – a quarter of gas use otherwise expected. Reducing the amount of gas required for businesses and households would directly reduce bills and relieving pressure in the market could reduce energy costs for all gas users. Energy efficiency and fuel shifting can therefore help businesses and households save money on their energy bills and create productivity benefits across the Australian economy. This represents a potential win-win for both Australia’s finances and emissions.
By 2030, Australia could:
- Reduce gas demand by 25 per cent
- Relieve the expected east coast supply gap by 45 to 70 per cent
- Reduce emissions by up to 16 MtCO2e or 12 per cent of our current emissions target
- Achieve energy productivity improvements accounting for up to 50 per cent of the target in the National Energy Productivity Plan.
However businesses and households face barriers to unlocking available opportunities, governments can provide support to overcome these barriers to help solve the gas crisis and reap multiple benefits.
Government interventions to support industry and the building sector to reduce gas demand can help get Australia onto a pathway to net zero emissions, create energy savings for businesses and households and improve energy security and productivity. Governments can unlock this win-win solution for businesses, households and the nation. The policy frameworks are in place, now is the time for governments to ensure the programs, and the measures to implement them, will make the most of the opportunities available.