Victoria’s decision to block onshore unconventional gas developments and continue the moratorium on conventional gas development is short-sighted, according to major electricity and downstream natural gas businesses.
The Australian Energy Council (AEC) has said today’s decision ignores the important role gas will play in supporting renewables integration and reducing carbon emissions as the energy sector transforms. The Council’s chief executive Matthew Warren added developing Victoria’s gas reserves is critical to maintaining downward pressure on both energy prices and carbon emissions.
“Gas has half the carbon emissions of coal, and delivers flexible, reliable energy at times when renewable sources may be unavailable,” he said.
“The Victorian Government’s plan to install over 5000MW of wind generation will mean that Victoria’s electricity system will be increasingly reliant on gas as a flexible back-up fuel. Scarce gas supplies will make this more challenging, as we saw in South Australia last month, where spot gas prices peaked at almost $30/GJ, or up to five times long-run prices.
“At the recent COAG Energy Council meeting all states – except Victoria – confirmed the importance of gas development and agreed to work collaboratively to develop Australia’s valuable and abundant onshore gas reserves.”
In blocking the exploration and development of all onshore unconventional gas in Victoria, Mr Warren said the Victorian Government is succumbing to populist sentiment on fracking.
“This is a very disappointing response from the Victorian Government, and can only mean bad news for its energy prices and gas supply into the future,” he said.