About the East Coast Gas System (ECGS)

Scope of the ECGS

The east coast gas system includes the gas markets, the gas industry facilities and stakeholders participating and operating within east coast jurisdictions, which includes all states and territories except for Western Australia. Markets in the ECGS include the:

Declared Wholesale Gas Market (DWGM) in Victoria in which AEMO is both the transmission system operator and market operator;
Short Term Trading Market (STTM) hubs at Sydney, Adelaide and Brisbane where AEMO is the market operator;
Gas Supply Hub (GSH) at various locations where AEMO operates a gas trading exchange; and
capacity trading platform and day ahead auction (DAA) of secondary capacity on designated pipelines and compression facilities, which AEMO operates.

AEMO’s Roles and Responsibilities in the ECGS

Market Operations

AEMO operates and administers the wholesale gas markets in the ECGS and has a defined role in each of those markets as summarised in the section above. AEMO also operates and maintains the Gas Bulletin Board (GBB) which is a gas market and system information website that aggregates and displays data on gas production and flows across the east coast gas transmission system.

Reliability and Supply Adequacy functions

In response to the projected supply shortfall in the south in 2023 and the heightened susceptibility of the gas markets to reliability and supply adequacy threats, Energy Officials developed and implemented a framework extending AEMO’s powers and functions, known as the ECGS function. The ECGS function does not duplicate markets-specific rules but rather operates in a complementary fashion. Stage 1 ECGS reforms extended AEMO’s powers and functions to provide it with tools to monitor, signal and manage supply shortfalls in the east coast gas market prior to winter 2023:

Transparency: New and existing participant disclosure obligations to enable AEMO to assess the likelihood of risk or threat to the reliability or adequacy of gas supply in the ECGS.
Signalling: Communication of information about risks or threats, including the ability for AEMO to hold conferences. This function also replaced the Gas Supply Guarantee which was a mechanism developed by the gas industry in March 2017 to make gas available to meet peak demand periods in the National Electricity Market.
Directions: AEMO can give directions to gas industry participants to resolve an identified risk or threat. This includes a compensation framework for directed participants.
Trading: AEMO can trade in natural gas to maintain or improve the reliability or adequacy of gas supply in the east coast gas system using its $35 million trading fund.

Gas planning and forecasting reports

AEMO is responsible for long-term gas supply and demand forecasting to support efficient decision-making and long-term investment in ECGS gas markets and infrastructure services:

The Gas Statement of Opportunities (GSOO) which provide AEMO’s forecast of annual gas consumption and maximum gas demand, and reports on the adequacy of eastern and south-eastern Australian gas markets to supply forecast demand over a 20-year outlook period; and
AEMO’s Victorian role as operator of the Victorian gas Declared Transmission System (DTS) which requires AEMO to prepare and publish the Victorian Gas Planning Report (VGPR). The VGPR provides a supply and demand, and pipeline capacity adequacy assessment for the Victorian DTS over the next five years. Registered participants in the DWGM provide AEMO with forecast information for the VGPR. AEMO must keep this forecast information confidential. The VGPR provides forecast information for the total system and by system withdrawal zone, as required by the National Gas Rules (NGR).

The ECGS reforms effectively expanded AEMO’s role from identifying long term gas supply adequacy and reliability issues under the GSOO into the same short to medium term identification of gas supply adequacy and reliability assessments as are provided in Victoria under the VGPR and as part of the Victorian transmission system operator role.