The Australian government has unveiled a gas-led economic plan in which Canberra pledged funding of a new 1,000MW gas-fired power station in New South Wales (NSW), as well as underwriting studies for new gas pipelines and developing non-producing gas basins in Queensland and the Northern Territory (NT).
Canberra also plans to set new gas supply targets with Australian states and territories and enforce potential "use-it or lose-it" requirements on gas licenses, the Australian prime minister Scott Morrison said in a speech in Newcastle, NSW today. The policy follows advice provided from a government-created committee set up to identify economic recovery plans post Covid-19.
The plans also include to spend A$28.3mn ($20.74mn) on studies that are hoped to lead to gas extraction in the Beetaloo Basin in the NT, the North Bowen and Galilee Basin in Queensland.
The government plans to strengthen the agreements it has with the three LNG exporters based at Gladstone, Queensland to ensure there are no gas supply shortfalls, Morrison said. Canberra will also explore options for a prospective gas reservation scheme to ensure Australian gas users get the energy they need at a reasonable price, the prime minister said.
The government also plans to identify priority pipelines and critical infrastructure as part of an inaugural national gas infrastructure plan worth A$10.9mn that will also highlight where the government will step in if the private sector doesn't invest, Morrison said. Canberra will also look to reform the regulations on pipeline infrastructure to promote competition and transparency.
"The government wants the private sector to step-up and make timely investments in the gas market. If the private sector fails to act, the government will step in – as it has done for electricity transmission – to back these nation building projects. This may include through streamlining approvals, underwriting projects or the establishment of a special purpose vehicle with a capped Government contribution," Morrison said.
Canberra also plans to work with state governments through a programme worth up to A$250mn to accelerate three critical projects, the Marinus Link, which is the 1,500MW power transmission link between Tasmania state and the Australian mainland, Project EnergyConnect, linking the South Australia and NSW power sectors, and VNI West interconnectors, linking Victoria and NSW.
This is in addition to the existing government support for HumeLink between NSW and Victoria, and the QNI Interconnector between NSW and Queensland. This would mean that Australia will accelerate all priority transmission projects identified in the Integrated System Plan, the blueprint for Australia's power network to transition to a low emissions network, authored by the Australian Energy Market Operator.
The government is giving the private sector until the end of April 2021 to reach final investment decisions on 1,000MW of dispatchable capacity, with a commitment for generation in time for December 2023-February 2024, energy minister Angus Taylor said in a statement. The new plant is seen replacing the 1,680MW coal-fired Liddell power station owned and operated by Australian utility AGL Energy.
"If, by the end of April 2021, the private sector has not delivered on the target, the government will take necessary steps to ensure the required dispatchable capacity is built," it said.
The state-owned power generator Snowy Hydro Limited is developing options to build a gas generator in the Hunter Valley at Kurri Kurri should the market not deliver what consumers need, the minister said.
