Victoria has gas shortages - why is this and what does it mean?
Victorian gas reserves have hit an all time low, with the possibility that the state may face “total system” gas supply shortages.
This is partly due to the Iona gas storage facility, the largest independent provider of storage to the east coast gas market dropping to record-low supply levels due to high demand.
According to Iona’s owner, Lochard Energy, the reason for Iona’s supply drop is because of this year’s “unplanned coal fired generation outages and especially cold winter weather”, which has resulted in Iona customers using gas from storage earlier and in larger quantities than usual.
What does this mean for Victorian energy supplies?
As a result of the Victorian energy crisis, Australian Energy Market Operator (AEMO) has been forced to intervene and enact its emergency supply guarantee plan.
This means that Queensland suppliers will have to provide more gas to New South Wales to relieve the supply of Victorian power plants.
“AEMO has activated the gas supply guarantee mechanism to secure additional gas supplies from Queensland-based gas producers to support gas-powered electricity generation in the National Electricity Market,” AEMO said in a statement.
Director of the Victorian Energy Policy Centre, Professor Bruce Mountain has said that Australian coal power generators are “way past their prime” and that there is still a lack of renewable power available to support the coal decline.
What role has the weather played?
The particularly cold winter we have been having in Australia has meant that people are using more electricity to keep their homes warm. This matters because it puts a significant drain on the overall system.
According to the AEMO, Victorian winter gas demand is about three times summer’s demand. Overall, the increased demand of electricity in conjunction with the international coal supply issues have meant that Australia has had to increase its energy prices.
What can we do about the rising costs?
The increase in energy prices is a concern for Aussies who are already worried about the rising cost of living. Luckily, there are ways you can reduce your energy usage in your home and save money on your energy bill. Check out our energy saving guide for some useful tips.
Want to learn more about what’s going on with energy prices and how to reduce your energy usage? Check out our energy home page.