Graph of the day: Without a big government stick, gas power will decline in Australia

Increasingly, it seems gas is becoming the main focus of global climate debates, as coal enters a structural decline around the world (albeit one that is too slow). With that in mind, today’s graph of the day is the contribution of fossil gas to Australia’s National Electricity Market into the future, as modelled by the Australian Energy Market Operator in their ‘Integrated System Plan‘ report.

These different scenarios are not ‘predictions’. They are least-cost outcomes of various energy types, in the context of various global, national and local conditions. But in each of these scenarios, the outcome for gas-fired generation is the same: the fuel comprises only a tiny fraction of total annual energy output.

The ISP doesn’t predict gas-fired power will sit at this tiny sliver in Australia, but it does point out that for it to dominate the grid, uneconomic subsidies and government intervention must be used. Sound familiar?

Published in December 2019, the Department of Industry, Science, Energy and Resources (DISER)’s ‘projections‘ report actually is a prediction of where Australia’s electricity grids (that’s mostly the NEM, but including Western Australia and the Northern Territory as well). It is not a model or an optimisation exercise; it attempts to paint a picture of the near-future based on current policies and trends. From 2016 to 2017, the prediction for gas output was pointedly revised upwards. From 2017 onwards, it’s been dropping precipitously, obviously reflecting higher predicted renewable output and the worsening economic situation for gas-fired power in Australia.

Only a month and a half until the new projections are released. You can bet I’ll be creating a bunch of new graphs from that once it comes out.