Why new gas connections should be banned

New homes are being added to the gas network every day.

In 2021, 68,494 households connected to gas across NSW, Victoria, South Australia, and the ACT.

“There are more people joining the gas network every year than there are disconnecting from it,” Deputy Program Director of the Energy and Climate Change Program at the Grattan Institute, Alison Reeve, told SwitchedOn.

Since 2010 the number of new households connecting to gas has increased in NSW and the ACT by 37 per cent, in Victoria by 22 per cent, and inSouth Australia by 18 per cent.

Victoria is the only state where the number of residential gas customers grew more slowly than the total number of households.

“The number of people leaving every year is increasing. But the number of people joining every year is also increasing and it is increasing faster than the number of people leaving,” says Alison Reeve.

The Grattan Institute’s report Getting off gas: why, how, and who should pay? shows how this creates problems for the future – every house added to the gas network is adding to Australia’s emissions and will eventually have to be disconnected.

"There is little point trying to encourage homes to upgrade to all-electric if new connections to the gas network continue to grow – it’s like pouring water into a bucket with a hole,” says the report.

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Governments should set dates for bans‍

The Grattan Institute has called on state and territory governments to ban new gas connections to homes, shops and small businesses.

By banning new connections Governments can generate greater momentum towards an all-electric residential sector.

The Grattan report says Governments need to do two things – first, set a date by which residential gas use will end, and second, set a date when no new gas connections will be allowed.

This will provide certainty for homeowners, tenants, building managers, and gas network businesses.

“An early decision about an end date for residential gas use, and a ban on new connections, would reduce the amounts that consumers and shareholders have to pay via depreciation,” says the Grattan report.

Craig Memery, Senior energy advisor at the Public Interest Advocacy Centre, PIAC, says gas bans should be part of any smart electrification strategy.

“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,” says Memery.

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

"Once the gas businesses have been put on notice about what they can expect from the future, it'll give them no option but to plan for that future," says Memery.

Households slugged by gas disconnection fees

Disconnecting from the gas network can be costly. Some householders who have already disconnected have been slugged fees of hundreds of dollars.

By building all-electric homes from the outset, householders can avoid the costly and wasteful process of eventually having to disconnect from the gas network.

Connecting new homes to the gas network when they will inevitably have to be disconnected within the next two decades, is seen as wasteful and costly by renewable energy advocates, and also undermines efforts to combat climate change.

The Grattan report recommends that federal funds should only be available for home electrification instates that have a gas phase-out date and a ban on new connections.

Some jurisdictions already announced bans

The ACT and Victoria are the only state or territory jurisdictions in Australia that have already set dates to phase out gas.

The ACT government has legislated to ban new gas connections for homes and small businesses from November 2023, and phase out existing connections by 2045. Victoria has announced a ban on new connections will take effect from January 2024 on all new homes and residential subdivisions.

“The easiest thing to do is to stop making the problem worse by putting in what will become obsolete infrastructure by rolling out new gas pipelines,” ACT Energy Minister Shane Rattenbury told SwitchedOn.

“We don't want householders building a new home today with a gas hot water system, gas heating, gas cooking environment when we're looking to phase gas out, because they'll just then be left with a more expensive retrofit later on.”

“The best thing we can do for householders at this point, having taken the decision to electrify the city, is to ensure that they are putting in the infrastructure today that they need in the future,” says Rattenbury.

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Craig Memery from PIAC also argues that "it doesn't make sense to install and connect new homes to the gas network from an economic perspective."

"Electric appliances that do the same things as gas appliances have become much more efficient, they've become much cheaper, and they're much cheaper to run."

Banning new gas connections is also seen as a way to accelerate the transition to renewable energy sources and stimulate innovation in renewable energy technologies and energy storage systems.

Several other countries have already announced plans to ban new gas connections to homes and businesses as part of their efforts to combat climate change and transition to cleaner energy sources.

The UK government announced in 2019 that gas connections to new homes will be banned from 2025.

Several municipalities and regions in Sweden have already implemented or announced plans to ban new gas connections.

France has banned the sale of gas boilers from July 2022, and Germany plans to ban them in 2024.

Ban gas connections in new multi-unit building immediately

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The Grattan report also recommends Governments should ban new gas connections in multi-unit buildings immediately.

This is because it will take longer to upgrade multi-unit dwellings togo all-electric - gas can’t be turned off to a building until all dwellings have been electrified.

“Upgrading centrally provided appliances requires the agreement of all owners, and has a high capital cost. And some buildings will have space constraints that limit capacity to upgrade,” says the report.

“For example, centralised gas water heaters take up less space than centralised heat pumps.”

Melbourne City Council and Canterbury Bankstown Council in Sydney have already moved to prevent gas connections in multi-unit buildings.