The Australian Energy Market Commission (AEMC) has launched its review of a mechanism designed to support the continued supply of gas to generators during times of electricity system stress such as heat waves. 

The AEMC today released a consultation paper on the review of the Gas Supply Guarantee.

The nation’s energy ministers have asked the AEMC to do the review. 

Under the terms of reference, the AEMC will carry out the review during 2021 and report back to the ministers in the first quarter of 2022.

The AEMC is seeking stakeholder input on whether a mechanism is still required, and if so, whether it should be in its current, or another, form.

The review will consider the circumstances in which the guarantee was introduced in 2017 and the many changes to the national electricity market and the east coast gas market since then.  

Doing so will help the AEMC form a view about whether those changes have impacted on the ability of gas-fired generators to source gas quickly during peak demand periods. 

Submissions on the consultation paper are due on Thursday 15 April 2021. A template to help stakeholders provide their views on the issues raised in the consultation paper is available here from the AEMC website.


What is the Gas Supply Guarantee? 

The Gas Supply Guarantee (GSG) was initiated by the Australian Government in March 2017 in a package of gas market initiatives which included the Australian domestic gas supply mechanism (ADGSM). 

Under the GSG, gas producers and pipeline service providers made voluntary commitments to the Australian Government to supply gas-fired generators to regions under system stress, such as demand spikes during heat waves. 

Specifically, under the GSG gas producers are to make extra gas available to gas-fired generators through the facilitated gas markets or using bilateral contracts. In addition, pipeline service providers are to provide interruptible transport agreements for extra supply, coordinate the transfer of gas between pipelines, and transport additional gas as required. 

To date, the GSG has not been called upon. 

Media: Kellie Bisset, Media and Content Manager, 0438 490 041