A new report commissioned by The Australia Institute shows gas demand in NSW could halve within a decade and questions the need for a gas network in NSW.

The report, “The Dash from Gas. Could demand in New South Wales fall to half?” by the University of Melbourne’s Energy Institute synthesises recent important research by AGL, the Grattan Institute, Deloitte Access Economics and others, as well as providing new analysis.

The report also points out that if unnecessary gas infrastructure is built on the basis of inflated gas demand projections, then unnecessary network costs will be passed onto NSW households and businesses – as happened with electricity prices in over the past few years.

A gas industry “death spiral” could result as demand for gas falls, gas customers disconnect, and the remaining customers would be left to pay for ongoing gas grid operation and maintenance.

“The future of the gas grid in NSW needs to be addressed”, says report co-author Tim Forcey. “Electrical appliances for space heating, cooking and hot water can provide the same services as gas, and are more efficient, cleaner, and more economic. So whether we can afford having two grids – a gas grid and an electricity grid – needs to be looked at.”

“NSW is facing a gas price shock, not facing a gas shortage”, says Matt Grudnoff, senior economist at The Australia Institute. “As IPART has confirmed, the gas price rises have been locked in by LNG exports. No amount of gas mining in NSW will change that.”

“The solution is for the NSW government to assist households and businesses.to reduce their exposure to gas, by helping the shift to cleaner, cheaper and more efficient electrical alternatives.”

Link to MEI report: Here

Below: Download the TAI submission to the Inquiry into The Supply and Cost of Gas and Liquid Fuels in New South Wales