Australia must rethink gas strategy: Grattan

Spanish Market: Electricity, Natural gas
20/03/25

Australian think-tank Grattan's Orange Book 2025: Policy priorities for the federal government report suggests redesigning Canberra's future gas strategy, coordinating a shift away from gas for households and some industries while changing market control mechanisms.

Australia's next federal government must act to address a shortfall of gas in the country's southeastern states by creating a demand response mechanism for the national gas market and bringing together stakeholders to permit initial LNG imports in mid-2026, according to Grattan.

Australia has always been both an exporter and importer of LPG, proving it is possible to build infrastructure to ship gas to the nation's south for the next 3-4 years in line with expected shortfalls, director of Grattan's energy program Tony Wood told a Sydney forum on 19 March.

Building or expanding gas pipelines would be expensive and inefficient as the nation decarbonises, Wood said, with less gas forecast to be used as Australia targets net zero emissions by 2050.

Canberra should institute a working group involving producers, users, traders, terminal owners, governments and the Australian Competition and Consumer Commission — which reports on market supply — to achieve seasonal imports of LNG in winter months, according to the Grattan report. A rule change to create a demand response mechanism akin to that under national electricity market rules would assist in meeting small shortfalls, such as during severe weather or unexpected supply outages.

Demand is expected to rise on the back the closure of coal-fired power stations in the 2030s, according to Canberra's future gas strategy released in 2024. Gas-fired power demand may double in the decade to 2043 because of the need to support a solar and wind-heavy grid.

This requires a reworking of the future gas strategy to specify plans to reduce demand and clarify future gas requirements outside of power generation, Grattan's report said. Assistance for households and industries to electrify processes is also needed, together with optimising infrastructure to ensure residual users in power generation and industry can access gas supply.

The main controls on east coast gas grids, the Australian Domestic Gas Security Mechanism (ADGSM) and code of conduct, should be revised to allow for interstate transfers of gas, Grattan said, likely from Queensland's Gladstone-based LNG projects to the southern states. The code of conduct, which mandates an A$12/GJ ($8/GJ) price on domestic gas, came into effect in 2023 amid booming global gas prices but must be reviewed in 2025.

Australia's energy and climate change ministerial council met on 14 March but declined to decide on expanding the Australian Energy Market Operator's powers, to enable it to address the gas shortage possibly through underwriting LNG import terminals. More analysis will be commissioned ahead of a decision at the next meeting in mid-2025.

By Tom Major

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

30/04/25

Nemos commit to 15-minute settlement in power SDAC

London, 30 April (Argus) — Eleven nominated electricity market operators (Nemos) have confirmed their "readiness and commitment" to proceed with a 15-minute settlement in the single day-ahead coupling (SDAC) market on 11 June, according to a statement given to Argus . The co-signing Nemos — Oslo-based Nord Pool, Czech OTE, Austrian EXAA, Greek Enex, Italy's GME, Spain's Omie, Bulgarian Ibex, Poland's TGE, Slovakian Okte, Croatia's Cropex and Romanian BRM — confirmed that they "do not share the misgivings" about the 15-minute settlement transition expressed by European power exchange Epex Spot earlier this month , the Nemos told Argus . Nord Pool previously told Argus on 17 April that it was "confident and ready" to deliver 15-minute trading. The market operators do "not recognise" the problems cited by Epex and are sure that the "necessary infrastructure and processes" are in place to implement the move on time successfully. Instead, the co-signed Nemos stressed that the transition is a "pivotal advancement" and any delay risks "hinder[ing] progress" towards a better-integrated market. Specifically, the signatories clarified that the decoupling registered in some tests and cited by Epex Spot was not "due to a lack of reliability" in the system. Instead, they attributed this to "internal local testing issues of certain parties in the initial [testing] stage". The Nemos added that all performance tests of the central matching algorithm (Euphemia) were "successfully completed and validated by all parties, including Epex Spot". The co-signed Nemos noted that most test scenarios, "both functional and procedural", were "successfully completed and validated", adding that any reference to the implicit intraday auction (IDA) decoupling scenario is "misleading and inappropriate" as these were "caused by local issues" and the "time allocated to IDA executions" is less than 25pc of the "overall time available for SDAC". By Daniel Craig Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

France to review role of renewables in energy plan

30/04/25

France to review role of renewables in energy plan

London, 30 April (Argus) — The French government will delay the publication of its 10-year energy plan (PPE), and could change its content to take into account criticism that it gives too much priority to renewables, after a debate in the French parliament earlier this week. Prime minister Francois Bayrou on 28 April held a parliamentary debate on the much-delayed plan, which was initially due to come out in 2023. Publication appeared imminent last month, but revolts in the parliament — in which the prime minister does not have a majority — have forced the government to reconsider. The government will take its decisions "in some months", Bayrou told the parliament. "This PPE is not written in advance and everyone will be able to contribute before the final version," he said, opening the door to a rewrite of the plan, which committed to large increases in wind and solar photovoltaic capacity. A commission will deliver a report at the end of May, to be followed by a parliamentary debate on a version of the plan authored by senator Daniel Gremillet in June. The government's support for renewable energy will be "reasoned", he said, suggesting there could be a scaling back of wind and solar ambition. Bayrou highlighted the problems of solar energy, including that its peak output does not correspond to peak demand periods. To solve this problem, France must make its demand more flexible — including through the upcoming reform of tariffs, which will offer lower prices to some customers in the middle of the day — and through developing storage, he said. But the question of cost remains. Roof-mounted installations in France — the sector which has advanced the fastest over the past year — produce at a cost of €100/MWh, he said, compared with €40/MWh at large ground-mounted plants in Spain. But the public acceptability of covering large areas of countryside with low-cost solar farms remains a question, he said. And the development of onshore wind must be "reasonable", as public acceptability of the technology diminishes as the number of installations increase, Bayrou said. France must focus on repowering existing sites, he added. And the government firmly supports extending the lifespan of existing nuclear plants, and building at least six more reactors to enter service from 2038, Bayrou said. Right-wing Rassemblement National (RN) called for an increase in nuclear ambition, demanding the construction of 10GW of new nuclear by 2035, upratings at existing reactors and increasing the load factor of the fleet to 80pc. This would put France on the road to increasing its energy mix to 60pc low carbon by then, up from 37pc now, RN deputy Maxime Amblard said. But this would be accompanied by a moratorium on intermittent renewables, especially on wind farms, he said. The centre-left socialists called for the publication of the PPE as is, while left-wing LFI and green parties criticised what they characterised as a lack of ambition on emissions reduction and too heavy a reliance on nuclear. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s Sojitz to enter biomethane production in India

30/04/25

Japan’s Sojitz to enter biomethane production in India

Tokyo, 30 April (Argus) — Japanese trader Sojitz has decided to fund Indian biomethane producer IOC GPS Renewables (IGRPL), in efforts to enter biomethane production and sales in India. IGRPL's biomethane project requires over $400mn, Sojitz announced on 30 April, but Sojitz declined to disclose the funding amount. IGRPL is a company jointly launched by Indian biomethane plant constructor GPS Renewables and India's state-controlled refiner Indian Oil. Sojitz will conduct the funding in line with these two companies by the end of May, Sojitz told Argus . IGRPL plans to begin operating 30 biomethane plants in India during the 2026-27 fiscal year to 2027-28, targeting 160,000 t/yr of biomethane production. The company first produces biogas, a mixture of methane and CO2, by processing agricultural wastes using bacteria. It then purifies the biogas to be used as biomethane. IGRPL's biomethane plants will mainly use paddy straws as feedstock, which are usually burned in the country after harvesting rice. The produced biomethane is expected to be supplied to domestic gas firms, and those companies will use the biomethane for blending with conventional city gas. This will help to cut greenhouse gas emissions compared with using only conventional gas derived from fossil fuels, Sojitz said. Sojitz does not plan to export this project's biomethane to Japan for now, the company explained to Argus , but will later consider expanding the biomethane business to other regions by utilising GPS Renewables' technologies. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Woodside’s Louisiana LNG signs gas supply deal with BP

30/04/25

Woodside’s Louisiana LNG signs gas supply deal with BP

Sydney, 30 April (Argus) — Australian independent Woodside Energy has signed a long-term supply deal with oil major BP for feedstock gas for the first two stages of its Louisiana LNG project, totalling 16.5mn t/yr, ahead of first production planned for 2029. The agreement is the first in a series of planned deals enabling diversified supply into the three-train Louisiana LNG project, with up to 640bn ft³ (18bn m³) to be piped to the facility via the proposed Line 200, Woodside said on 30 April. Lines 200 and 300 form one of two interstate pipeline schemes proposed as part of the project. The dual 42-inch pipelines running about 37 miles (60 km) and 34 miles respectively from Ragley in Beauregard Parish to Carlyss in Calcasieu Parish, Louisiana, have planned capacity of 4.6bn ft³/d with maximum seasonal capacity of 5.7bn ft³/d, Woodside said. The 96-mile Driftwood mainline pipeline to be built through Evangeline, Acadia, Jefferson Davis and Calcasieu parishes will average 4bn ft³/d, Woodside said. Woodside reached a final investment decision for Louisiana LNG on 29 April after selling down 40pc of the project's infrastructure to US-based investment firm Stonepeak in early April. The facility holds permits for 27.6mn t/yr of capacity, with an eventual total of five trains planned. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Indonesia secures $60mn JETP funding for solar power

30/04/25

Indonesia secures $60mn JETP funding for solar power

Singapore, 30 April (Argus) — State-owned PLN Indonesia Power (PLN IP) and Saudi-listed Acwa Power will receive $60mn in funding from the Just Energy Transition Partnership (JETP) to develop a solar project in Indonesia, indicating there is still interest in financing the country's energy transition. The 92MW peak (MWp) Saguling floating solar project in west Java will receive the funds from German development finance institution DEG, French development finance institution Proparco and Standard Chartered bank, announced the Glasgow Financial Alliance for Net Zero (GFANZ) on 29 April. PLN IP and Acwa Power signed a power purchase agreement in August 2024 to jointly develop the solar project. The $60mn for the project is in addition to $1.2bn which Indonesia has already secured under the JETP. Indonesia joined the JETP in 2022 and is supposed to receive $20bn through the scheme from international partners including GFANZ, to help its coal phase-out. US president Donald Trump's decision to withdraw the US from the JETP raised concerns earlier in 2025 on whether Indonesia could stick to its energy transition policies. But the US' withdrawal may not necessarily have a major impact on JETP funding. The latest investment "points to appetite from both public and private sectors to finance the country's green energy transition," said GFANZ. France has already mobilised over €450mn ($511mn) for Indonesia's energy transition through the JETP, according to the ambassador of France to Indonesia, Fabien Penone. PLN IP, a sub-holding of state-owned electricity company PLN Persero, is the largest power generation company in southeast Asia. Indonesia's electricity demand is expected to grow by about 3.8pc/yr to 1,813TWh/yr by 2060, but its power sector is still heavily reliant on coal, which made up 61.8pc of the electricity mix in 2023. In comparison, renewables made up 19pc, out of which solar and wind power constituted a mere 0.2pc. Indonesia has large solar potential of up to 3,295GW, said PLN IP's president director Edwin Nugraha Putra. The Saguling solar project, which is expected to reduce carbon emissions in Indonesia's power system by at least 63,100 t/yr, will also increase the share of solar in Indonesia's electricity production by around 13pc, according to GFANZ. The share of renewables in Indonesia's power mix is expected to rise to around 21pc by 2030 and 41pc by 2040, according to think-tank Ember. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more