Gas demand in Eastern Australia could drop by 60% in 2050

Demand has been declining due to the clean energy transition.

Demand for gas in Eastern Australia could drop by 60% in 2050 as the region shifts to renewable energy, Wood Mackenzie said in a report.

Gas demand has been declining in recent years, which was partially due to the pandemic, but the report noted this is also primarily due to the rapid growth of renewables.

“The energy transition is almost certain to reduce Australia’s domestic gas demand over the long term; the key question is how quickly,” Lucy Cullen, principal analyst with Wood Mackenzie’s Asia Pacific as team, said.

“To explore this sensitivity and different growth pathways, we developed two scenarios – Slow Burn and Fast Forward. These show gas demand declining up to 60% by 2050, but full decarbonisation remains challenging.”

Under the Slow Burn scenario, Wood Mackenzie noted there could be a higher gas demand world with a more gradual transition to low-carbon energy.

This comes as infrastructure support gas demand and power grid constraints and legislative issues slow down the pace of the transition.

In this light, Eastern Australia gas demand is projected to fall 20% from 626 petajoules (PJ) in 2020 to 478 PJ by 2050.

The Fast Forward scenario, meanwhile, showed the continuous transition to a low-carbon future supported by coordinated national and state-level policy, particularly in the power sector, which is projected to be almost 100% low carbon.

In this scenario, Eastern Australia could see its gas demand fall 60% to 245PJ by 2050 from 626PJ in 2020.