The changing dynamics of east coast gas markets

Sydney

22 October 2013

• 36 downstream energy companies

• The “UN” of gas policy in Australia

• Upstream gas suppliers, retailers,

pipeline owners, customers

esaa

• Australia has been deindustrializing for a

generation – what can/do we want to do

about it?

• East Coast reservation policy doesn’t

make sense

• Preservation or transformation

Outline

2005-13 NEM target demand (GWh)

192,000

194,000

196,000

198,000

200,000

202,000

204,000

206,000

208,000

210,000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

• Detailed modeling three years away

• Initial estimates of changes:

– 50 per cent – AUD/industrial demand

– 15 per cent – price effect

– 15 per cent – PV

Electricity Demand in Australia - AEMO

Energy price rises – public view

Eastern states annual energy consumption

growth rate 1960-61 to 2010-11

Australian energy intensity

Low growth is a common theme

Historical consumption

Historical east coast gas consumption

Historical consumption

Demand projections continue to be dialled down

Demand projections continue to be dialled down

Demand projections continue to be dialled down

Gas fired generation likely to slow

Judisch: Germany: weak carbon price, high

renewables penetration, high gas price

Gas prices difficult to predict

Future contingent on fuel prices

Existing gas and oil infrastructure – Aus vs US

CSG dominates the supply outlook

• Remaining east coast gas reserves and contingent resources

East coast gas basins and transmission pipelines

NSW is most exposed

4,225

• 0.1 per cent of NSW Senate vote

• 1.4 per cent of CSG community vote

• Half that of the Smokers’ Rights Party and Bullet Train for Australia party

• One third of the Pirate Party

• One tenth of the Sex Party

Mini Antony Green

• It’s been gradually occurring for more

than a generation

• Major energy customers are hurting

• Reservation policy isn’t the solution

• Preservation or transformation?

Deindustrialisation