According to EnergyQuest, Queensland’s LNG projects recovered quickly from the slump in demand and global gas prices in mid-2020 to finish the year with record exports in volume terms but quarterly revenue numbers highlighted a “roller-coaster ride”.
It found quarterly revenue swung between $4.1 billion and $1.6 billion and forecast export revenue for the Queensland LNG industry of around $10 billion this year, “although much will depend on the kind of winter in the northern hemisphere”.
Even accounting for the roller coaster ride, 2020 revenue was $12.5 billion in a year when the sector slashed billions from the value of its assets.
EnergyQuest said that notwithstanding the rapid growth of renewables, coal remained the dominant fuel in the NEM in 2020 with a 67 per cent of market share.
“Notwithstanding the growth of wind and solar, renewables only supplied 19 per cent of the lower level of national electricity market demand in 2020, compared with 67 per cent for coal. Renewables only generated 28% as much electricity as coal,” EnergyQuest said.
But despite that, coal was less important than it was a decade ago when it had an 80 per cent share.
“The future for coal, however, is bleak as the surge in renewables and low wholesale electricity prices accelerate the exit of coal plants,” EnergyQuest said.
“The good news in 2020 was that total renewable capacity reached 25,079 megawatts. This is more than NEM coal capacity of 23,200 MW.
“The other conclusion we draw from the 2020 result is that a massive increase in renewables will be needed to replace coal in the NEM.
“Renewable capacity would need to increase by a factor of 3.5 times to replace the depressed level of coal generation seen in 2020. Work done by Frontier Economics for the Australian Pipelines and Gas Association concludes that in 2035 a NEM that is 93 per cent renewable generation and 7 per cent gas generation will be 36 per cent cheaper to run than one that is 100 per cent renewable.
EnergyQuest raised the question of whether gas had a future and found that markets that had a high concentration of renewables also gave gas a significant market share.
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