We can electrify the smart way, or the slow and expensive way

Craig Memery discusses why Australia needs a plan to ensure everyone benefits from the electrification journey.

Electrification is acknowledged as being essential for the world to get to net zero in the fastest possible time.

But to electrify the smart way Australia needs an electrification plan, argues Craig Memery, Senior energy advisor for the Public Interest Advocacy Centre.

“We need a plan, we need a strategy, we need a common goal held by governments, by industry, by consumers, by the market institution and others that says this is where we want to get to,” says Memery.

“The starting point really for doing it smarter has to be policies and decisions by regulators and market institutions that lock in electrification as the future.”

“Once the gas businesses have been put on notice about what they can expect from the future, it will give them no option but to plan for that future.”

But the smart way won’t be simple.

That’s the message Craig Memery makes in a broad ranging interview for the SwitchedOnAustralia podcast.

Memery believes the electrification of our homes and businesses is inevitable, and necessary for two reasons – “it’s emissions and it’s cost.”

Gas is a fossil fuel that can’t be decarbonised, whereas electricity can and is being decarbonised. And electric appliances have become much more efficient, and much cheaper to run.

But Memery is concerned some people will be disadvantaged by the move away from gas if they don’t receive assistance to transition to electric options.

He is particularly concerned that already disadvantaged members of the community will be most adversely affected by “the gas death spiral.”

 

The gas death spiral

 

Several people are already choosing to fully electrify their homes, and disconnecting from the gas network, either to reduce their carbon footprint or their household running costs.

Although many more people are currently still connecting to the gas network than leaving, the number of people disconnecting is accelerating.

As that acceleration gains speed, the gas networks will be left with an increasingly smaller pool of people to pay for their services.

“The remaining costs [for consumers] will get recovered from a smaller and smaller base, which means that the cost of that system goes up for the people who remain connected to the gas network,” says Memery.

The people who are likely to be left on the gas network, because they can’t afford to leave, will be those who are least able to pay.

“They're the people on low incomes who can't afford the upfront cost of an electric efficient appliance that's cheaper than their gas appliance, even though it might save them more money in the long term,” says Memery.

“It's people in rentals, who don't choose their appliances [whose] landlord is likely just to replace like-with-like at the time that an appliance fails.”

Another group who are likely to be left on the gas network are people in high density housing who face barriers to installing efficient electric heat pumps. These require a component to sit on the outside of a building which may be prohibited by body corporate regulations.

Homes that have old electrical wiring will also need to be rewired if they are to fully benefit from the electrification transition, particularly to accommodate induction cooktops.

“[That can cost] thousands, even tens of thousands of dollars for some homes for the rewiring alone,” says Memery, which many cannot afford.

To overcome these challenges, and ensure everyone is able to participate in the electrification transition, Memery argues government incentives to electrify must be targeted at people who will be most disadvantaged by the move away from gas.

This will help them get off gas, and where they can't get off gas, it will lessen their exposure to bill shock in the short term while gas prices continuing to rise.

 

Finding an electrician

 

An electrification plan will also need to address another major challenge – Australia doesn’t have enough qualified and knowledgeable people to install all the appliances we’re going to need.

“What we really don't have yet is the local supply chains and the local employment, that's going to take us through the transition,” says Memery.  

“We're going to need to change something in the order of hundreds of homes, from gas to electric every day in the big states of Victoria and New South Wales,Queensland in particular.”

Governments will need to support programs that build the capacity, competency and knowledge of appliance installers.

The supply chain for electrical appliances will also need to be modernised and secured as the electricity system is modernised.

 

The cold shower incentive

 

One of the problems with transitioning from gas hot water to electric is householders often only make a decision about a new hot water system when their system fails.

“It is often quicker then to replace a system like-with-like,” says Memery. “When they’ve had enough cold showers and they don’t want to wait any longer.”

That often means one gas hot water system is replaced by another, a decision that is likely to be backed by a plumber.

“If you're a plumber today, chances are you've installed 99 gas water heaters for every one electric heat pump that you've installed. It's what you're used to. It's what you're experienced with,” says Memery.

Plumbers who have only worked on old style electric heat pumps for water heating are more likely to talk people back into getting gas replacements because of their experience with underperforming electric heat pumps.

“To some extent those [concerns] are well founded. There have actually been some poor-quality electric heat pumps out there that have had operational issues and broken down. And the reality is they have a lot of moving parts.”

Memery says we need to skill up new installers from the start, when they're doing their apprenticeships, about the benefits of new efficient appliances, particularly on the running costs of different appliances.

“It’s not something that people learn when they do an apprenticeship - how to advise people on which appliances cost more or less to run.”

If gas appliances are held to the same efficiency standards as electric appliances, Memery argues they will automatically be self-selected out of contention because they are less efficient.

If less efficient appliances were not able to be sold, or were penalised in some way, consumers would be further encouraged to choose more efficient electric options.

 

Listen to the full interview with Craig Memery on the SwitchedOn Australia podcast here

Author
Anne Delaney
SwitchedOn Editor
April 21, 2024
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