Falling energy demand, rising gas prices and the subsidised growth in the renewable electricity supply threaten the future of natural gas as a replacement for coal in Australia’s national energy mix, Bret Harper, Associate Director of Research at RepuTex – an Australian specialist energy and carbon research firm – told Gas to Power Journal.
“Asian gas prices are high enough to support a large increase [in] Australian gas, whose unconstrained growth will raise the price of all Australian gas due to a lack of domestic protections,” said Harper.
These rising prices, expected in the next five years, are likely to restrict gas-fired power generation in Australia to meeting demand during periods of high wholesale electricity prices. Even during these periods however, gas will have to compete with hydroelectric power.
“Gas-fired generation competes most directly with hydroelectric sources of energy during periods of high prices. While hydroelectric power is intermittent over annual timescales, it can be dispatched just as reliably as gas and often has faster ramp rates,” said Harper.
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