The outlook for natural gas supply in Australia has improved, and the shortage crisis has been delayed.

The Australian Energy Market Operator stated on Thursday that the gas supply outlook in Australia has improved in recent months, with short-term supply conditions getting better, delaying the expectation of extreme peak day gas shortages in southern Australia until 2030, a year later than previously predicted.

The Australian Energy Market Operator noted in its latest gas adequacy outlook report that recent supply conditions have improved due to increased peak day gas supply, new infrastructure investments, and downward adjustments in consumption forecasts.

The agency stated that as the electrification process for households, businesses, and industries progresses, reliance on gas is expected to decrease, leading to a decline in total gas consumption.

At the end of last year, the federal government announced a plan requiring exporters to reserve 15% to 25% of gas production for the domestic market starting in 2027.

The agency pointed out that despite the recent improvement in supply expectations, Australia still needs to invest in long-term supply, as natural gas production from traditional gas fields in the southern states is expected to decline by 46% over the next five years.

Nicholas Falken, General Manager of System Design Execution at the Australian Energy Market Operator, stated, “While the gas supply outlook has slightly improved, it remains crucial to ensure that committed and anticipated gas production, storage, and pipeline projects are completed on time, while also advancing the development of the electricity market.”

Falken added, “The industry is considering a range of currently uncertain supply, storage, and transportation projects, which, if realized, could further delay the projected supply shortage.”

The Australian federal government commented on the Australian Energy Market Operator’s updated gas supply outlook, stating that as more renewable energy and battery storage come online, gas is increasingly being released for the areas that need it most, including industry and providing support to the grid when needed.

Australian Minister for Climate Change and Energy Chris Bowen stated, “By 2025, more than half of the electricity supplied to the grid will come from cheaper, cleaner renewable energy generation, supplemented by battery storage and gas peaking when needed, which will put downward pressure on energy prices.”