Fears of winter gas shortage in Australia after power plant ccustom party braceletslosures

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CANBERRA - Fears mount that Australia could suffer a gas shortage in the near future, following the closure of the Hazlewood brown coal power station last month.

David Rylah from energy consultancy company Energy Action has said that some customers -- mostly commercial and industrial firms -- are paying up to 12 US dollars per gigajoule, up from levels of 4 US dollars in the past.

He told The Australian on Tuesday that the upcoming winter could result in a huge demand for gas power, and the current output might not be enough to satisfy the needs of private customers and businesses.

"The rate of the tightening of the supply and demand balance is much quicker than anyone had anticipated," Rylah said.

"And as soon as cold weather hits southern Australia in the first winter without Hazelwood, and both physical gas demand and gas-fired generation demand hits the market, volatility and price, we believe, will get a further jolt," he said.

Rylah said even if the government was facilitating construction of further energy and gas infrastructure, the pinch will be felt by consumers in the meantime.

"Beyond the contracting process, instigating and/or maintaining existing on-site energy efficiency projects can have a massive impact on a company"s energy costs," Rylah said.

"Demand destruction will probably take about 12 months to move through if people realize they can"t pass on higher prices."