The South Australian Government has announced it will commit $24 million towards a program to give companies incentive to extract more gas to supply to the local market.
The incentive aims to increase the supply of gas into the energy market – with South Australian generators, industry and households having first offering – and provide a medium-term response to the need to reduce energy prices.
Minister for Mineral Resources and Energy Tom Koutsantonis said, “There is a lack of available gas in the national market, a situation made worse by the decision in Victoria to ban onshore conventional and unconventional gas exploration and development.
“Gas is an important transitional form of energy generation that works in tandem with renewables, providing base-load power to stabilise the system as more renewables come online.”
Australian Petroleum Production and Exploration Association (APPEA) Director South Australia/Northern Territory, Matthew Doman, said the South Australian Government’s decision to incentivise natural gas development is a positive initiative that should help bring more gas to market and benefit local consumers.
“This is a good policy for South Australia that will help ensure a stable and reliable supply of natural gas to meet the energy needs of local businesses and households,” Mr Doman said.
“It’s encouraging to see a government delivering constructive policies, rather than destructive policies such as moratoriums and blanket bans being embraced elsewhere.
“This will only enhance South Australia’s reputation as an attractive and supportive destination for natural gas investment.”
Mr Doman said a reliable and affordable supply of natural gas was critical in helping South Australia transition to a cleaner energy future.
“Modelling released last week by the Climate Change Authority showed that under a range of policy scenarios, gas will need to play a bigger role in electricity generation if Australia is to achieve its emissions reduction targets,” Mr Doman said.
“The fact remains that gas-fired generation is essential to reliable electricity supply – its rapid response technology is the natural complement to intermittent renewable energy.”