The Australian Energy Market Operator is forecasting gas shortfalls, starting this year and continuing until 2026, as offshore production plummets and extreme weather events lash the country.

AEMO chief executive Daniel Westerman said NSW, the ACT, Victoria, South Australia and Tasmania are at risk of not having enough supply to keep up with demand this winter and warned that without new gas projects, demand would outstrip supply on the east coast by 2027.

“While production capacity commitments have increased for 2023 compared to the 2022 gas statement of opportunities report, and several key infrastructure projects are on track for delivery, there is forecast to be a 16 per cent reduction in capacity this winter compared to 2022 in Victoria, which increases supply pressure in the southern regions,” he said.

“To minimise shortfall risks, committed infrastructure and supply projects must be completed on time, while demand-side solutions, additional gas shortage and pipeline development, and LNG import terminals could potentially play a role.

“Investments are need in the near term to ensure operational solutions from 2027, despite falling gas consumption.”

Last year, Australia’s energy ministers agreed to extend the market operator’s powers to immediately tackle east coast supply shortfalls, which will take effect from this winter.

Mr Westerman said it would help manage supply but called for more production to prevent shortfalls during winter and long term.

The AEMO warning comes after the energy regulator flagged electricity prices would soar by 20 per cent for about half a million customers in South Australia, NSW and South East Queensland.

Polly Hemming, director of climate and energy at Australia Institute said “the old gas supply shortage claims are back again”, citing similar claims made last decade.

“Gas is needed in the short term, but the idea that it is helping reduce emissions is manifestly untrue. What Australia needs is an objective equal focus on how to tackle short to medium term supply issues while reducing gas reliance,” she said.

“Short and medium-term gas supply issues are the result of Australia being held to ransom by the gas industry. Australians will continue to be faced with skyrocketing prices across the board until this is addressed.

“The answer to any issue of supply over the coming winters is not to invest in more gas infrastructure. It is to speed up the transition to renewable energy.”

Independent MP Allegra Spender said AEMO’s report “highlights the risks of dependence on declining fossil fuel industries” and called for an accelerated transition to renewables.

“We need to accelerate electrifying our households with solar,” she said.

“The government must back household electrification in the May budget.”