Natural gas from Bass Strait has had a spectacular 55-year run as a staple of Victorian households.
Since natural gas was first piped into a house in Carrum in April 1969, the adoption of and subsequent reliance on this readily accessible and abundant local fuel has been virtually unquestioned.
In the first year after that initial connection, more than a million appliances were converted from what was known as “town gas” (a byproduct of coal) to use this newly harnessed “sea gas”.
Fast forward 50 years and, with up to 3 million connections and 65 per cent of the nation’s total residential use, Victoria remains unique in Australia for its reliance on gas as a fuel source.
According to the Australian Bureau of Statistics, 83 per cent of Victorian households have a gas connection.
The energy landscape has changed
It’s fair to say that, as more gas has been extracted, the Bass Strait natural gas reserves must be declining. At the same time, the gas that is being extracted now is likely becoming more expensive to extract and process, because gas with higher levels of carbon dioxide is more expensive to produce.
Drilling for gas is also a politically sensitive topic. On one hand, burning gas produces far less emissions than burning coal. On the other hand, gas is still considered to be a fossil fuel (and, according to the Grattan Institute, responsible for about 19 per cent of Australia’s emissions).
It all adds up to a reasonable case for Victoria to reduce its reliance on natural gas and look to replace it with energy from other sources to work toward a better balance.
Given that context, the decision from the State Government to ban gas connections for future residential builds is understandable. A couple of weeks ago the government announced that planning permits for new homes and residential subdivisions will only connect to all-electric networks, starting from next January.
While other parts of the country are already used to it, homes with no gas appliances will be something of a shock to the system for most Victorians.
Grants and rebates will be available
As part of regulations regarding new housing builds, the government will spend $10 million on a new residential electrification grant program for developers and volume builders to provide solar panel, solar hot water, and heat pump rebates to new home buyers.
Just as established Victorian households can already benefit from solar rebates, we can expect the Victorian Energy Upgrades program to add a series of new financial incentives to help facilitate a shift from gas to electric appliances.
As we know, a good number of households have eagerly adopted solar energy systems over the past decade, therefore it’s reasonable to anticipate that, given some financial encouragement in the form of rebates, we’ll see a proportion of homes make the switch to all-electric over the next period.
How many and how soon is anyone’s guess, though.
A challenge for established households
Starting a new build from scratch makes it easy to include electrical appliances only and exclude gas. Switching away from existing gas cooktops, gas heating, and gas hot water systems is a bit more problematic – albeit a potential money saver.
Because many electric appliances are significantly more energy efficient than their gas counterparts, after the up-front costs of purchase and installation, you will start saving on your energy bills. For example, a split-system air conditioner is at least five times more efficient than a gas ducted-heating system in producing the same amount of heat.
Rather than suddenly change from gas to electric throughout, it’s likely that most households will wait until each gas appliance has had a good run and might be getting closer to the end of its ‘natural’ life rather than discarding something that’s been in use for only a few years.
And, if a home has all three major gas appliances – for heating, cooking, and hot water – you’d expect them to budget to change one at a time.
Switching from gas to electric appliances
It’s looking likely that rebates are coming, so keep an eye out for what’s available and see if it works for you. Given that heating and cooling account for around 40 per cent of the average Australian household’s energy use – not to mention that heating costs tend to be higher than the Australian average in Victorian winters – it makes sense to prioritise this switch.
The purchase and installation costs can be less than $2,000 for a smaller system while you can get a good-sized system and have it installed for around $5,000.
By the way, it generally costs anywhere between 13 and 36 cents per hour to use a reverse-cycle air conditioner to warm a single room, while a ducted whole-house reverse-cycle air conditioning system currently runs up your bill somewhere in the $1.45 to $2.12 per hour range.
An efficient heat-pump hot water system has the lowest operating cost option for hot water heating. They use 60 per cent less electricity than a conventional electric hot water system and can be powered by a household solar system. These currently start at around $2,500 (Choice recently pulled together a lot of useful data on them).
While Victorians are understandably advocates of cooking with gas (probably because that’s the only way some of us have ever known), there’s already a noticeable take-up of a couple of inexpensive alternatives: air fryers and single induction burners.
The next step would be to replace the entire gas cooktop with an induction cooktop (these start from around $500, and you can get very good ones for around $1,500), and then you might finally swap out your gas oven for an electric one (about $1,000 to $2,000 – although you can spend $13,000 if you want!).
A transition will take many years
Any significant move away from gas will only happen through a long, gradual transition.
As is always the case, there will be a wedge of early adopters, before a more substantial segment of the community gets around to it. Then there will be those like the Texas congressman Tronny Jackson who is quoted as saying “If the maniacs in the White House come for my stove, they can pry it from my cold dead hands!”. The Aussie version is probably “you’ll be waiting ‘til my stove carks it – or I do”.
A good indicator of the potential pace of the transition is the takeup of EVs. Electric vehicles have been on sale in Australia for over 15 years, but there was minimal traction for them for the first decade or more before they finally started to become more mainstream over just the past couple of years.
It’s early days, and as always, we’re watching this trend keen to see where it leads. As soon as we know more, especially about any future incentives, we’ll give you the info. Until then, stay warm this winter with whatever works best for you.