The latest Gas Statement of Opportunities shows “shortfalls” pushed out again, now beyond 2030, as electrification and a pipeline of roughly 30 GW of batteries eat into demand.
Instead of a looming shortage, AEMO now sees total gas consumption falling faster than previously projected, with industrial users and households shifting to electric options, and gas generation in the National Electricity Market (NEM) declining as batteries and renewables take over. In other words, the “gas gap” keeps moving away from us because the system is moving past gas.
This is exactly the story we (Peter Newman and Ray Wills) have been documenting: Australia’s grids are undergoing a storage-led transition where batteries rapidly move from the margins to the centre of system security.
Their analyses of the NEM show gas generation on a long-term decline, battery dispatch out-discharging gas peakers, and renewables plus storage supplying more than half of NEM energy for the first time in 2025.
Batteries and electrification don’t need gas
AEMO’s 2026 GSOO says falling gas demand is driven by two forces: booming batteries in the power system and accelerating electrification in buildings and industry. Around 30 GW of battery projects under development are expected to sharply reduce gas-powered generation compared with previous forecasts, especially as batteries take over peaking, firming and frequency services that gas once dominated.
At the same time, households and businesses are abandoning reticulated gas for efficient electric appliances, and AEMO now expects industrial electrification to gather pace as the preferred decarbonisation path.
We have described this as “Australia’s battery revolution pushing gas out of the grid support business”, arguing that storage is cheaper than gas – indeed, gas is an expensive, inflexible relic rather than a necessary back-up. Recent AEMO data back this up: Q4 2025 saw battery discharge nearly triple year-on-year, while gas-fired generation fell 27% to its lowest level since 2000.
That is “Blazing Saddles” in action – what “passing gas” looks like in practice.
The disappearing gas crisis
For a decade, industry has warned of imminent gas shortages to justify new fields and pipelines. Yet each time AEMO updates its outlook, the crunch moves further into the future as demand erodes faster than expected.
The 2024 outlook talked about peak-day shortfalls as early as 2025; by 2025, the gap slipped to 2029; now major annual supply gaps are only projected from 2030 – and only if gas use stays high and electrification under-delivers. The trend line is clear: every year, more batteries and more electrification mean less gas.
We (Peter Newman and Ray Wills) have framed this not as a temporary reprieve but as the start of the fastest energy transition in history, where electrification structurally reduces primary energy demand and strips gas of its role in both bulk energy and grid support.
If policy simply aligns with the direction markets and technology are already heading – prioritising renewables, storage, efficient electric appliances and demand flexibility – the supposed future gas shortfall will be solved not by new supply, but by making gas unnecessary.
Australia has passed gas – now policy must catch up
The recurring delay of gas shortfall dates is not a footnote; it is a warning that planning based on old gas-centric assumptions is out of date. Australia has effectively “passed gas” in its electricity system, with batteries and renewables taking over the growth frontier and gas shrinking into a residual, transitional role.
The logical next step is to recognise this in regulation and investment: stop using ever-receding shortage forecasts to justify new gas fields and infrastructure, and start planning explicitly for a grid – and an economy – where gas demand continues to fall.
Australia’s lived experience now matches what Newman and Wills have long argued in their research and commentary: in a storage-led, electrified energy system, gas is not the bridge to net zero. It was only ever a cul-de-sac, we are already exiting the dead end.
Prof Ray Wills (Adjunct Professor, The University of Western Australia; Managing Director, Future Smart Strategies)
Prof Peter Newman (John Curtin Distinguished Professor, Curtin University)
Facts Only
The Australian Energy Market Operator (AEMO) released its latest Gas Statement of Opportunities, showing gas demand shortfalls now projected beyond 2030.
Total gas consumption is declining faster than previously forecast due to electrification and battery storage expansion.
Industrial users and households are shifting from gas to electric appliances.
Gas generation in the National Electricity Market (NEM) is decreasing as batteries and renewables take over.
Approximately 30 GW of battery projects are under development, expected to reduce gas-powered generation.
Batteries are replacing gas in peaking, firming, and frequency services.
In Q4 2025, battery discharge nearly tripled year-on-year, while gas-fired generation fell 27% to its lowest level since 2000.
Previous AEMO forecasts predicted gas shortfalls as early as 2025, then 2029, now pushed beyond 2030.
Professors Peter Newman and Ray Wills argue that Australia’s energy system is undergoing a storage-led transition, making gas unnecessary.
They contend that policy should prioritize renewables, storage, and electrification rather than new gas infrastructure.
Newman is a John Curtin Distinguished Professor at Curtin University; Wills is an Adjunct Professor at the University of Western Australia and Managing Director of Future Smart Strategies.
Executive Summary
Full Take
The narrative presented here is a compelling case for Australia’s rapid energy transition, where gas is being structurally displaced by electrification and battery storage. The strongest version of this argument is supported by AEMO’s shifting forecasts, which consistently delay projected gas shortfalls as demand erodes. The data—such as the tripling of battery discharge and the 27% drop in gas-fired generation—lends credibility to the claim that gas is becoming obsolete in grid support. The authors rightly highlight the economic and technological advantages of storage over gas, framing this as a market-driven shift rather than a policy-imposed one.
However, the analysis could be vulnerable to a form of **ARC-0024 Ambiguity**—the assumption that the transition will be seamless or that policy will naturally align with market trends. While the data supports declining gas demand, the narrative downplays potential challenges, such as grid stability during the transition or the political inertia around gas infrastructure. There’s also an implicit **ARC-0043 Motte-and-Bailey** risk: the argument shifts between "gas is unnecessary" (a strong claim) and "gas demand is falling" (a weaker, more defensible one). The authors’ framing of gas as a "cul-de-sac" is provocative but could oversimplify the role of gas in certain industrial processes or as a transitional fuel in regions lagging in electrification.
The root cause of this narrative is a paradigm shift in energy systems, where decentralized, flexible storage solutions outcompete centralized, inflexible fossil fuels. The unstated assumption is that technological momentum alone will drive policy change—a risky bet given the historical influence of gas lobbyists and the path dependency of existing infrastructure. The implications are significant: if gas becomes unnecessary, stranded assets and job losses in gas-dependent regions could create economic and social friction. Conversely, consumers and industries adopting electric alternatives stand to benefit from lower costs and reduced emissions.
Bridge questions: What are the limits of battery storage in replacing gas for high-heat industrial processes? How might gas interests respond to this narrative, and could they delay the transition through regulatory or political means? What safeguards are needed to ensure a just transition for workers in gas-dependent industries?
Counterstrike scan: A coordinated influence campaign pushing this narrative might emphasize the inevitability of gas decline to deter investment in gas infrastructure, while downplaying transition risks to accelerate policy shifts. However, the content here aligns more with evidence-based advocacy than manipulation, as it relies on AEMO data and acknowledges market trends rather than resorting to emotional appeals or distortion.
Patterns detected: ARC-0024 Ambiguity, ARC-0043 Motte-and-Bailey