Australia's LNG Use to Slow with La Nina
The La Nina weather pattern expected to drench the summer months in Australia is deemed to impact on gas generation, carbon analytics firm, RepuTex said in a briefing paper.
RepuTex's Emissions Update report for November, released on Monday, reveals that power emissions for the month of November decreased 2.7% from October levels, as a reduction in availability of coal generation in Queensland and NSW led to increased output from hydro and gas sources for the month.
According to RepuTex, output from natural gas is likely to go into reverse thanks to La Nina.
"La Nina has brought with it cooler, wetter weather which has subdued peak energy demand on hot days, so while we have seen an increase in gas output over November, that's unlikely to be sustained over summer as coal generators like Millmerran and Mount Piper come back online and limit the use of natural gas", said RepuTex's Executive Director, Hugh Grossman.
"Peak demand from hot days in NSW, Queensland and Victoria in November was well down on historical levels, due mainly to the low number of consecutive warm days thanks to La Nina. That's a trend that is likely to continue over summer, so we should see less use of gas, assuming coal generation capacity remains available", Mr Grossman said.
The report shows NSW, Queensland and Victoria did not see any uplift in their peak demand on hot days. In Victoria, a 35 degree day led to peak demand 9.6% lower than last November. Similarly, a 37.2 degree day in NSW saw peak demand 3.1% lower than the previous analogous day in November 2009.
As a result, RepuTex expects power emissions to stay flat over the short term.
"We expect December emissions to be more or less in line with November as school holidays also begin to slow peak demand and Snowy Hydro and Tasmania Hydro continue to generate strongly", continued Mr. Grossman.
"If we look to the longer term impact on Australia's carbon market next year, a repeat of a La Nina event in 2012-13 would likely see a reduction in any carbon liability on gas generators as a result of lower gas output.
"Combined with a likely rise in natural gas prices, we may see a reduced role for natural gas as a potential intermediary fuel - an interesting shift in the Australian market."