The Australian Energy Market Operator’s (AEMO) latest gas adequacy outlook shows improved near-term supply conditions, with risks of extreme peak-day shortfalls in southern Australia now expected to emerge a year later than previously forecast, and new investment required from 2030 onwards.
AEMO’s 2026 Gas Statement of Opportunities (GSOO) for the East Coast Gast Market (ECGM) examines gas adequacy over a 20-year period to support investors and governments in making informed decisions to benefit consumers.
AEMO Executive General Manager System Design, Nicola Falcon, said increased supply capability and moderating demand had strengthened short-term gas adequacy.
“Increased peak-day gas supply, new infrastructure investment and reduced consumption forecasts have improved gas adequacy expectations in the near term to 2029,” Ms Falcon said.
Total gas consumption is forecast to decline as households, businesses and industry electrify, reducing their reliance on gas. In the National Electricity Market, gas‑powered generation demand is also expected to fall below previous forecasts, driven by around 30 gigawatts of battery storage under development and the delayed retirement of the Eraring Power Station.
Despite improved peak-day supply expectations, gas production from legacy fields in southern1 states are forecast to decline by 46% over the next five years. This will require new investments to address emerging supply gaps from 2030 under most weather conditions.
"While the gas supply outlook has slightly improved, it remains important that committed and anticipated gas production, storage and pipeline projects are completed on time, alongside developments in the electricity market,” Ms Falcon said.
“Industry is considering a number of supply, storage and transportation projects that are currently uncertain, which if committed, may delay forecast shortfalls," she said.
Over the next decade, potential gas supply gaps are expected to increase as around two‑thirds of NEM coal power stations retire, before easing as new electricity generation and storage are built, highlighting the interconnection between electricity and gas markets.
While significant renewable and battery developments are expected in the NEM, gas-powered generation will continue to play a key role during winter peak demand periods, particularly when renewable output is lower and electrified heating demand increases.
“The 2026 GSOO reinforces the critical role gas continues to play in supporting households, businesses, industry and electricity generation as Australia’s energy system transitions,” Ms Falcon said.
Published alongside the GSOO is the 2026 Victorian Gas Planning Report (VGPR) update, which provides an outlook on gas supply and demand in Victoria and the Victorian Declared Transmission System to support strategic planning.
In Victoria, annual gas production and daily supply capacity is forecast to fall 52.8% and 35.2% by 2030, respectively, with annual consumption to reduce by 10.5% over the same period.
AEMO’s winter preparedness activity is underway for the gas, and electricity markets, with modelling indicating adequate gas supply to satisfy forecast demand in southern Australia, helped by healthy storage levels at Iona (91%), Dandenong (94%) and Newcastle (83%).
AEMO is monitoring the impact of current global dynamics and is providing updates to governments and industry.
[1] Southern gas production refers to fields and plants located downstream of the Southwest Queensland Pipeline (SWQP) and includes gas supply from the Cooper Eromanga basin.
ENDS
About AEMO
AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems in the best interests of Australian energy consumers. These include the National Electricity Market and interconnected power system in Australia’s eastern and southeastern seaboard, the Wholesale Electricity Market and power system in Western Australia, the Victorian gas transmission system and gas markets across Australia.
As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems security advice and services to deliver energy security for all Australians. AEMO is a not-for profit entity. For more information, head to head to www.aemo.com.au.