Governments must act immediately to get more gas supply into the grid, Australia’s largest and most representative business network said today.

Australian Chamber of Commerce and Industry chief executive officer Andrew McKellar said the report issued by the Australian Energy Market Operator (AEMO) should ring alarm bells inside federal and state governments.

AEMO has indicated that coal fired power stations will close at a much faster rate than is currently scheduled.

Yet the transition to renewables as coal power is phased out is running well behind schedule.

“AEMO is forecasting that demand for gas power production will double by 2050, but gas reserves are dwindling and stronger co-ordination across all levels of government is required to secure the necessary supply needed for the future,” Mr McKellar said

“Adding more gas into the energy mix in the short to medium term will make that transition to renewables much smoother and help us to reach net zero carbon by 2050”.

“Businesses now face even higher energy costs with the early closure of coal and slow rollout of renewables increasing pressure on the system.

“This is a wake-up call to our governments who have done little to get extra gas into the energy grid, despite repeated warnings from the gas industry of a looming shortage.”

Last week AEMO sent a threat notice to the gas industry, warning that gas supply on the east coast may be inadequate to meet demand in 2024.

The situation is expected to get even worse over the next three years.

The notice follows high demand for heating during a cold snap in eastern Australia and an earlier warning from AEMO that generators may need to burn diesel to secure electricity supply.

Mr McKellar said urgent action is needed to get more investment in gas exploration and supply and that the threat of forced shutdowns of manufacturing would hit business hard.

“At a time of low economic growth and rising labour costs this is the last thing business needs,” Mr McKellar said.

“Attracting new investment to open fresh gas reserves is desperately needed if we are to meet current demand as well as the increasing demand for power generation over the next 25 years.”