Long Term Gas Supply and Demand Scenarios – 2019 Update (Scenarios 2019) was again commissioned by Gas Industry Co from independent expert Concept Consulting Group (Concept). This Report is the fourth edition following previous editions in 2012, 2014 and 2016.
Long Term Gas Supply and Demand Scenarios – 2019 Update
Scenarios 2019 explores gas supply and demand scenarios to understand how New Zealand’s gas market may evolve over the period to 2050. The scenarios in the report are not predictions, but have been developed to understand the possible range of these uncertainties and how various plausible combinations may affect New Zealand’s gas sector.
For the 2019 study, two new key issues facing New Zealand’s gas sector were explored:
- The end-of-life of some of New Zealand’s largest gas-producing fields occurring within the next 10 to 15 years, and the economic factors and policy settings driving possible development of new fields.
- The implications of various climate-change-related policies including:
- Altered oil & gas exploration policy settings
- Higher potential carbon prices
- The policy goals of achieving
- 100% renewable electricity generation by 2035 in a normal hydrological year; and
- net-zero carbon emissions by 2050
Scenarios 2019 identifies that gas supply conditions are likely to tighten due to low levels of exploration, relatively high levels of demand, the end-of-life of offshore fields and the implications of climate-change-related policies.
The conditions in the market are less certain in the medium to long term, depending on the outcomes of a number of market drivers which are subject to material uncertainty, particularly:
- The future cost of importing LNG if New Zealand continues consuming gas to the point where it will eventually have insufficient gas supply to meet demand.
- Future CO2 prices, and the consequent impact on gas demand – particularly if it becomes more economic for most industrial process heat gas consumers to switch from gas to biomass or electrification.
- Investment in renewable generation and its potential to displace baseload thermal power generation.
- Population and GDP growth.
The Report analyses how different future outcomes for these drivers may affect New Zealand’s gas market.