As the gas industry knuckles down to fight its death spiral, so too does the battle to eliminate it from our kitchens and our commercial buildings. The degasification campaign now has a major consumer organisation on its side.
A new report released by Energy Consumer Australia is calling for a better national plan to roll out full electrification of Australian households to decarbonise the economy and meet emissions reduction targets.
The report breaks down key findings of the technical and modelling reports released in tandem by partnering research organisations CSIRO and Dynamic Analysis and aims to inform the limited understanding of what gas costs consumers.
Key findings in the report include:
- households remaining on fossil fuel will face escalating bills
- by 2030, average difference in energy costs between a fossil fuelled home and all-electric home (excluding solar and battery) will be around $2250 a year. Households with solar panels and battery will make additional savings
- as more household electrify appliances, those on gas will also pay higher network charges to make up the difference
- uptake of EV will reduce electricity bills due to better network utilisation from EV use
- consumers don’t have the right information to let them make decisions about how to electrify their homes in ways that respond to their unique situations and why it is important
- more action is needed to help households facing barriers to electrify their homes to ensure greater equity
Consumers could be saving up to $500 a year with energy efficient measures such as improved insulations and savings from solar-battery ownership is set to increase from $1250 to $1470 between 2030 and 2050.
We need all levels of government to coordinate their policies
While electrification of household will play a significant role, there is a need for planning, support, and clear communication with consumers, writes Energy Consumer Australia. The group is calling for coordination and proactive approach across the country to support the households that are unable to make this change on their own.
“Our recommendation is for a new national partnership of all three levels of government to coordinate the energy transition for consumers and ensure it is as smooth as possible,” the report says.
What was needed is a top-down action on structural policy shifting fossil fuel to electricity and bottom-up support for households.
This could incorporate:
- a consumer support agency – to give the right information at the right time from a trusted source and in their language to make the right decision
- financial support – to get funding to Australia’s most vulnerable households
- structural policies to enable change – government policies are needed to enable and mandate necessary infrastructure for change
How the states are faring
The report concludes that most households are not aware of how the transition will impact them as industry and policy makers have primarily focused on the supply side of energy. For instance, the federal government’s Australian energy market operator’s (AEMO) 2022 integrated system plan (ISP) provided $20 billion of low cost finance to modernise the grid.
Most states have also designed renewable energy zones and other policies to attract solar and wind generation, but many states have yet to commit to 100 per cent renewable energy.
An estimated five million households are connected to the gas network. Millions of these would require renovation to improve energy performance and climate resilience and to transition from 15 million non-electric cars currently in Australia.
A report by the Grattan Institute released in June 2023 said that Australia will not hit its 2050 net-zero emissions target unless it gets off natural gas yet getting off gas will be complex for governments and difficult for many people. Delaying action will it even more so, Grattan said.
Victoria has recently banned gas connections to new homes starting 2024 and the Australia Capital Territory will be providing $2000 to $15,000 in interest free loans to buy energy efficient products. The New South Wales Premier Chris Minns, South Australian Premier Peter Malinauskas and the Queensland Energy Minister Mick de Brenni have all refused to ban to follow suite and ban gas connections.
However, industry sources have told The Fifth Estate that in the case of NSW a move in that direction was only a matter of time.
Minns was more ham strung by lack of public service capacity to manage a change in policy, given a string of announcements around new policies in recent months, than non-agreement with the direction, the source said.
There is also the effective banning of gas in new commercial property with the Sustainable Buildings State Environment Policy that will mandate either electrification now or provision for electrification, a policy flagged by David Clark director of Positive Zero in our Festival of Electric Ideas masterclass #2 Kit and Fit.
“Minns said that he doesn’t have the capacity to take on something else, so the way I understand and I’m just speculating, is that he hasn’t thought it out from an ideological perspective, but more just pushed it down the track as something to be dealt with in the later date,” said the source.
The source said that there would be an inevitable domino effect with ACT and Victoria first and others to follow.
Other challenges
The pushback will continue though.
Most fierce resistance will be from the Housing Industry Association which is opposed to anything mandatory and is “hoping to continue to make things as we did in the Stone Age.”
The Masters Builders Australia was slightly more progressive but calls for delays to the transition to allow the industry to adjust.
The Masters Plumbers Association, though a minor lobby group was fierce in its opposition to Sydney’s Waverley Council banning gas.
See our article, How we’re blowing out gas – state by state, council by council, stove by stove.