A key Victorian gas storage facility is being drained to dangerously low levels thanks to rising demand, increasing the possibility of another dramatic market intervention to bolster electricity supply.
Gas at Lochard Energy’s Iona storage facility, located near Port Campbell in southwest Victoria, is falling to near-record levels as eastern states take advantage of the price cap of the state, raising new concerns about a gas supply crisis this winter.
Lochard Energy’s Iona underground gas storage plant in Victoria is being drained to dangerously low levels thanks to growing gas demand this winter. Credit:
On Monday night, the national energy regulator, the Australian Energy Market Operator (AEMO), issued a statement warning that if gas from the Iona plant continued to drain at the current rate, it could be forced to intervene. to ensure the supply of gas generating electricity.
“AEMO has determined that there is a possibility that operational or market responses may be insufficient to alleviate the threat. AEMO is considering all other possible options before intervening,” he said.
Last month, the AEMO made the unprecedented decision to briefly suspend the entire East Coast electricity market to restore calm to the volatile system.
Victoria is the only state that maintains a $ 40 price cap per gigajoule on gas to maintain a cap on wholesale prices.
The cap, which was automatically activated in late May under Australian gas market rules, prompted NSW and Queensland to get more gas from the Iona plant, which is the largest independent service provider. east coast gas market storage.
Increased demand caused storage at the plant to drop from 48% to 43% in one week. The impending supply crisis prompted the AEMO to issue a “system security threat” warning to try to avoid supply shortages this winter.