The process of moving away from gas as a household energy source is more or less under way in Australia, but so far there’s no coherent plan from governments for an approach to national electrification that’s fair for energy customers.
This leaves people who have no control over the power sources they use – such as renters, apartment dwellers, and low-income consumers in general – vulnerable to sharply rising energy costs in the years ahead. Currently, around three million Australians rent their homes, and around 2.6 million live in apartments.
New modelling by the advocacy group Energy Consumers Australia (ECA) points to a cost blowout for millions of households who end up stuck on the gas network.
In its most recent report, Power Move: Fair and Affordable Electrification for Australian Households and Small Businesses, ECA calls on governments across Australia to ramp up their efforts and set an ambitious electrification agenda.
If we wait much longer – or if we fail to help the most vulnerable households get off the gas network – the cost and difficulty will increase significantly
ECA general manager for advocacy and policy Brian Spak
The not-for-profit, which was established by the Council of Australian Governments (COAG) Energy Council in 2015, wants to see all new homes and small commercial buildings fully electrified by 2028, all existing rental homes by 2040, and homes of all types by 2050.
Between now and the end of household gas, however, energy customers who still rely on gas will have to find room in their budgets for bigger power bills.
“If we wait much longer – or if we fail to help the most vulnerable households get off the gas network – the cost and difficulty will increase significantly,” says ECA general manager for advocacy and policy Brian Spak.
“Every recent independent study – including the Commonwealth’s Future Gas Strategy – indicates that there’s unlikely to be much, if any, gas delivered to small consumers via the network in 2050. The transition off gas has countless benefits. All-electric homes and businesses will have cheaper and more predictable energy bills and be healthier places to live and work. The sooner households and businesses start to go all-electric, the easier it will be.”
ECA general manager for advocacy and policy Brian Spak says vulnerable energy consumers need protections as gas is phased out.
Fewer customers, higher delivery costs
The ECA report includes modelling which shows that, unless state and territory governments intervene, the network component of household gas bills (the cost of transporting gas through pipelines to homes) could more than quadruple by 2050 as the network recovers costs from fewer and fewer customers.
With network charges making up about 50% of the average gas bill, this will send total household energy costs through the roof.
A typical household gas consumer in South Australia, for example, faces a 64% increase in their total gas bill by 2036 and a 265% increase by 2050, according to ECA.
It wants to see governments “actively plan a fair and orderly exit from gas” for households and small businesses.
“Federal and state governments can ensure that the most vulnerable consumers are protected and that our economy thrives from the transition off gas by urgently working together on a national roadmap for household and small business electrification,” Spak says.
ECA makes a number of recommendations to make the transition to electricity fairer for those who aren’t in a position to choose their power sources, including:
Landlords should be required to install efficient electric appliances when a gas appliance stops working in a rental home.
Clear labelling of how gas appliances will affect energy bills should be mandatory at point of sale.
Rebates, incentives or subsidies to purchase new gas appliances where they are eligible under state-based schemes or offered by gas networks, should be removed or prohibited.
Disclosure of energy performance ratings of properties at point of lease and sale should be mandatory.
Strata legislation should be reformed to support electrification in multi-unit dwellings.
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
For more than 60 years, CHOICE has been fighting the good fight for Australian consumers.
In the past year alone we've uncovered systemic issues with sunscreens, investigated shonky supermarket pricing, fought for stronger scam protections and helped make complex energy pricing fairer and clearer.
CHOICE is here to provide unbiased advice and independent testing in our world-class labs. We buy the products we test, just like you do, and our expert reviews are influence free. We’re here to help you choose smarter. Hopefully you’ll also save some money along the way.
Thanks to CHOICE, you’ll never be alone when a business treats you unfairly. You can support our work by joining or donating to our cause.
