Victoria is enhancing its energy security and preparing for the future with the development of additional offshore gas storage. The Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024, recently passed in the Victorian Parliament, paves the way for new gas storage capabilities to ensure a stable and reliable gas supply as the state transitions to renewable energy.
Under the new legislation, gas can now be stored offshore in underground rock reservoirs, mimicking how it formed naturally before extraction. This additional storage will allow gas to be available when demand peaks, providing backup for the electricity grid and reducing exposure to price fluctuations in the gas market during high-demand periods.
One significant project in this initiative is the Golden Beach Energy Storage Project, located off the coast of Gippsland. This will be Victoria’s first offshore gas storage facility, adding approximately 12.5 petajoules of capacity and increasing the state's gas storage by nearly 50%. This project has already passed an extensive environmental review process, which included public consultation, and is now moving towards the investment phase. The project will initially undergo a short production period before transitioning to a full-scale storage facility. Once operational, it is expected to provide 30 petajoules of gas annually starting in winter 2027—about a quarter of the state's yearly household and small business gas consumption.
By increasing gas storage capacity, the state aims to ensure reliability during periods of high demand and further support gas-powered electricity generators. Gas currently contributes 2-5% of Victoria’s total electricity generation. This additional capacity will play a key role in maintaining a secure electricity supply as the state progresses toward its goal of 95% renewable energy by 2035, with gas supporting the remaining 5% to ensure system reliability.