Esperance locals save on energy bills after getting kicked off gas

Murray Johnson is one of 400 residents in Esperance who had just one year to electrify their homes and businesses after the private gas distribution company that serviced the town made a business decision to cut off the town's gas supply.

Now Johnson thinks he'll be able to save over $500 on the energy bills of each of the 4 short-term rental units he owns in Esperance after electrifying the stove tops and hot water systems.

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Esperance is an idyllic beach town on West Australia's south-west coast and when the gas stopped flowing in March this year most of the residents were ready, having swapped their gas appliances for electric.

Now the Esperance Energy Transition Program Knowledge Sharing Report, produced by Horizon Power, has shown how residents who embraced the energy transition earlier this year are already reaping the rewards with savings on their electricity bills.  

The transition has saved locals between 14 and 59 per cent on their energy bills. The greatest savings were made by households that transitioned their entire property to energy efficient electric alternatives – heat pump hot water systems, induction cooktops and electric space heating.

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When the gas company first announced in March 2022 they would no longer provide gas to residential and business customers in Esperance, there was widespread concern within the local community.

"I thought it was an unusual decision at the time, given the gas pipes were reasonably new and were only a few years old," says Johnson.

Even Stephanie Unwin, the CEO of Horizon Power, the state's regional energy provider, had to front up to community meetings to reassure the residents they would get an energy solution within the year.

It was Horizon's job to administer a $10.5 million state government-sponsored scheme to transition customers to a new energy source. 75% chose to electrify.

Under the Esperance Energy Transition Program - the first electrification program of its kind in Australia - households were able to buy new electric appliances and the government agreed to fund every affected customer with a like-for-like electric replacement.

“It was self-evident very quickly that it had to be one on one, personal [communication]. You've got to walk people through the process, and really engage really deeply,” Unwin told the SwitchedOn podcast. “Education and trust was key.”

The Esperance Energy Transition Program Knowledge Sharing Report shows that the extensive customer engagement has paid off - 94% of customers surveyed say they were satisfied with the delivery of the transition.

Johnson is one of the happy customers and says the Program was run very professionally. He ended up with top of the line heat pumps, valued at around $4000 each, plus installation costs of around $3500 per property, along with induction stoves valued at around $1500, for each of his 4 units.

Without funding from the government, and the installation service provided by tradies authorised by Horizon, he says he probably would have had to go with very basic electric appliances which may not have been as efficient, or last as long.

"I'm not a greenie but I do care for the environment, especially the marine environment," says Johnson who runs a fishing shop. "My main interest was having properties that are less costly to run with less maintenance."

Unlike landlords whose tenants pay for energy, Johnson's properties cater for short term rentals so reduced power bills, and only having supply fees from one utility were a signficant feature of the program for him.

From the outset of the project, Horizon had to deal with severe trade shortages facing WA. They undertook extensive engagement with the local trade community to ensure qualified trades were available to participate in the program. 88 per cent of the installation work was subsequently completed by local trades, and 84% of the program’s expenditure was directed to local trades.

Feedback from customers and trades make it clear that community education on technologies like induction cooking is vital for a successful electrification transition.

Many customers said they were not aware of the difference between induction stovetops and traditional electric stoves until the cooking demonstrations Horizon held in August 2022.  Following the demonstrations, the program saw an increase in the uptake of induction cooktops.

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On average, residents of Esperance have increased their electricity consumption by approximately 24%, and costs have increased by 18% (or $26 per month). However, the report found this is offset by the savings from not having to pay a gas supply charge, and results in a net benefit for the customer.

Modelling commissioned by the government from an independent specialist shows that residential customers who selected 100 per cent electric alternatives for their cooking, heating and hot water can expect to save around 38 per cent a year on their bills.

The report on the Energy Transition project also says the Department of Mines, Industry Regulation and Safety, the government agency responsible for gas equipment safety compliance and licensing, has reviewed the project and found “the [gas] pipeline was safely decommissioned.”

This involved disconnecting the distribution system from both the gas supply source and consumers’ gas installations, along with the purging of any flammable gas from the system.

Horizon Power says the Esperance Energy Transition project serves as a valuable roadmap for other towns considering similar energy transitions across Australia. It provides a case study for the cessation of reticulated gas networks and ways to support the uptake of electrification.

The small regional town has punched above its weight in renewable announcements, with the completion of the Esperance Power Project in May 2022, which means nearly 50 per cent of Esperance’s total electricity demand can be met by renewable sources.

More broadly, Western Australia has bet big on large-scale solar and storage, with ambitious plans to build 50GW of new energy capacity in just 20 years.

The move should help to furnish what the WA Labor government says will be a massive surge in demand for power as the state electrifies, and as new green industries, critical minerals, and renewable hydrogen projects ramp up in the resource-rich state.

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You can hear an interview with the CEO of Horizon Power, Stephanie Unwin on an earlier SwitchedOn podcast here.