Energy crisis deepens as gas shortage predicted for 2023: What’s happening?
The ACCC predicts a gas shortage 2,700% worse for next year.
They often say things will get worse before they get better and they're not wrong when talking about the energy crisis.
Today (1 August), the Australian Competition and Consumer Commission (ACCC) released its interim gas report, predicting a major liquid natural gas (LNG) shortage in 2023.
To give an idea of how dire things look, last year the Gas Inquiry predicted a 2 petajoules (PJ) shortfall for 2022. The outlook for 2023 is a predicted shortfall of 2,700% at 56PJ.
ACCC chair Gina Cass-Gottlieb said, "Our latest gas report finds that the outlook for the east coast gas market has significantly worsened. To protect energy security on the east coast, we are recommending the resources minister initiate the first step of the Australian Domestic Gas Security Mechanism (ADGSM)."
Good to know. The ADGSM or "gas trigger" is a mechanism by which the federal government can limit LNG exports to make sure there's sufficient supply to meet the demand for Australian homes. Whether the government will enact the ADGSM remains to be seen. However, treasurer Jim Chalmers said the government will respond to the ACCC's inquiry.
What does this mean for my gas bill?
Just as rising wholesale electricity prices are driving up the cost of household electricity bills, rising wholesale gas prices will do the same.
In its most recent quarterly report, the Australian Energy Market Operator (AEMO) found that wholesale gas prices had increased to an average of $28.40 per gigajoule (GJ) in Q2 2022 compared to just $8.20 per GJ in the same quarter last year.
Any outright shortage will only drive the wholesale price higher.
What can I do to lower the cost of my gas bill?
Not every home is fitted with gas. Those that are most likely use it for heating, hot water systems and cooking.
- Lower the hot water temperature. We're not suggesting you turn your hot water off completely, although it's a good idea when you're travelling. However, lowering your temperature even just a bit ends up using less gas.
- Take shorter showers. It's a 2-for-1. Save on your water and gas bills.
- Wash your clothes in cold water. Laundry detergents have come a long way. Most include all kinds of enzymes to help break down dirt, bacteria and other nasties. Unless something's heavily soiled, a cold wash will do a fine job.
- Use energy-efficient appliances. Just as there are efficiency ratings for electricity, there are efficiency ratings for water use. For example, consider using the economy wash feature on your dishwasher to save some money.
- Switch to an instantaneous hot water system. While more expensive to install, an instantaneous system uses gas to heat your water only when you need it rather than keeping the water warm all day.
- Skip preheating your oven or get an oven thermometer. Lots of recipes that call for preheating are often directed at electronic oven users. Gas ovens heat up faster. Depending on what you're cooking, you can likely skip pre-heating altogether or invest in a handy thermometer that can show you when your oven has reached your desired heat.
Electrifying your home
There's no quick fix but electrifying your home now could end up reducing the average household energy cost from around $5,000 a year to just $800 a year based on a report by Rewiring Australia.
While this figure accounts for access to solar power and electric vehicles, it's not too far off reality. With further rebates from state governments to install solar panels and home batteries, a gas-free future is possible.
Just last month, the Victorian government released its Gas Substitution Roadmap that outlines how the state will achieve net zero emissions and cut energy bills by moving away from gas.
For now, your best option for saving is to follow our tips and get on a better gas plan if you haven't switched recently. Compare your options here.