AEMO takes further steps to manage tight gas supplies

blue gas flame on stovetop (fossil)
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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 (NEM).  

“The producers and pipeline operator have responded positively to the request for additional gas supply. AEMO will continue to work with the parties to understand gas supply availability,” the market operator said in a statement.

Related article: AEMO highlights crucial transmission projects in 2022 Integrated System Plan (ISP)

“Challenging generation conditions experienced from early June continue in the NEM.  

“This has resulted in a greater reliance on gas-powered generation and larger than forecast inventory reduction at the Iona gas storage facility in Victoria.”  

In response, AEMO has issued two ‘threat to system security notifications’ (July 11 and 18) to reduce the depletion rates at Iona.  

This included an initial request for participants to cease purchasing gas from Victoria’s Domestic Wholesale Gas Market (DWGM) for supply to other jurisdictions, and then a second request to cease purchases for Victorian electricity generation. 

Market participants are responding to AEMO’s requests and directions to maintain a secure operating state for Victoria’s gas system. 

Related article: AEMO lifts spot market suspension as crisis eases

At this stage, there is no impact to gas supply in Victoria. 

AEMO expects the gas supply guarantee and threat to system security mechanisms to need to remain in effect until September 30, 2022, or until gas supplies are sufficient and the threat to gas supply caused by Iona storage inventory depletion has subsided. 

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