Australia in need of new gas investments to ensure energy security

July 1, 2026, by Melisa Cavcic

Australian Energy Producers, representing Australia’s upstream oil and gas exploration and production industry, has welcomed the 2026 Integrated System Plan (ISP) from the Australian Energy Market Operator (AEMO), which highlights the need for new gas investments to enable grid reliability.

Illustration; Source: Australian Energy Producers

The Australian Energy Market Operator’s 2026 Integrated System Plan is interpreted to reaffirm the critical role of gas in supporting reliable and affordable electricity to 2050, which will require more investment in new gas supply and infrastructure.

Australian Energy Producers’ Chief Executive sees the ISP as another reminder that governments need to ensure policy settings support the investment in gas needed to maintain a reliable and affordable energy system.

Samantha McCulloch, Australian Energy Producers’s Chief Executive, commented: “The ISP reaffirms that the National Electricity Market (NEM) will need more gas power generation to keep the lights on and power prices down. As more renewables enter the system and coal retires, gas will play an increasingly important role in maintaining reliability and supporting energy security.

“That is why governments must provide stable and predictable policy settings that encourage investment in the gas resources and infrastructure needed to support the transition.”

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Based on the ISP, the least-cost pathway to achieve net zero is a system built around renewable energy, which is linked through transmission and distribution networks, bolstered with storage and supported by gas.

This plan projects the NEM will require 17 GW of flexible gas-powered generation by 2050, up from the current 8 GW, which will require new gas supply, transport and storage infrastructure to support reliability and flexibility in the grid.

According to AEMO, “timely and efficient investment in new gas resources and/or infrastructure is critical to ensure the operability, reliability, and security of the power system,” while maintaining gas supply to residential, commercial and industrial consumers.

The ISP underscored the importance of getting the design of an east coast gas reservation scheme right, in McCulloch’s view, who added: “A test of a well-designed domestic reservation policy will be whether it encourages the long-term investment in new gas supply and infrastructure that the ISP has identified.

“Unfortunately, the current draft design framework released by the government risks destroying investment signals, crowding out domestic-focused gas producers and ultimately risking higher energy prices and future shortfalls.”