Major gas shortages with millions of Australian homes warned they could lose power

A gas shortage could leave millions of Australians without heat or electricity tomorrow night, the energy market operator has warned.

The concern has prompted a gas supply guarantee to the national energy market as Australians grapple with a particularly cold winter.

The operator ordered Queensland producers to pipe gas south to NSW rather than ship it overseas, which should relieve pressure on Victorian producers where supplies are dangerously low.

Victorian Energy Secretary Lily D’Ambrosio said the gas supply guarantee was triggered by Australia’s energy market operator on Tuesday afternoon when reserves at a storage facility in the south-west of the state fell to record lows.

Gas supplies could be cut for millions of Australians on Wednesday night, leaving homes without stovetops, heating and hot water (stock image)

The Iona gas storage facility in Port Campbell, Victoria has dwindling supply due to high demand amid the state’s price cap.

“That (the guarantee) means they can better see gas sales and delivery throughout the market, including Victoria but also in other states to get some transparency here,” Ms D’Ambrosio told ABC Radio Melbourne.

“As you have more transparency in the market, the market starts to change its behavior and honestly the market could get away with too much here.

“More visibility should mean, as was the case in April [when the guarantee was last triggered]the gas goes where it’s needed.’

In an industry letter issued on Monday, the Australian Energy Markets Operator (AEMO) warned of the risk of throttling during peak demand.

Lochard Energy, which owns Iona, said “unplanned blackouts at coal plants” and cold weather have boosted demand.

“The thing is that gas supplies and winter peak capacity are becoming increasingly scarce on the east coast,” Lochard said in a statement.

‘This year, unplanned coal-fired power plant outages and particularly cold winter weather have resulted in Iona customers withdrawing gas from storage earlier and in larger quantities than usual.’

The state’s price cap remains at $40 per gigajoule as global gas demand continues to rise due to various factors, including a significant drop in supply due to the war in Ukraine.

The latest warning comes after AEMO temporarily halted the East Coast market over the threat of power outages.

Victorian opposition leader Matthew Guy says impending gas shortages are unacceptable.

“There are Victorians who make a choice, either heat or eat,” Mr Guy said.

“It shouldn’t be a decision people are forced to take, but it is when the Labor government bans exploration.

“Here’s the alternative – I’ll let it, I’ll explore, I’ll open it up so we have more gas reserves so people can afford to heat their homes.”

Deputy Prime Minister Jacinta Allan, while acknowledging the energy grid is under pressure, said Victoria is a net gas exporter and AEMO’s latest advice is that the state has enough supply to meet its needs.

“The Energy Secretary will continue to work closely with AEMO and our gas operators to ensure supply is adequate for Victoria,” she said