The recent news of 10 towns in Victoria losing access to the reticulated gas network and being forced to convert to bottled gas or electricity is a very clear indication of a reality facing all of us.
Solstice Energy has given householders 18 months’ notice as they seek to reduce distribution to uneconomical areas.
Spinifex is an opinion column. If you would like to contribute, contact us to ask for a detailed brief.
As the cost of harvesting gas and maintaining an aging network of pipes and pumps continues to rise and is passed through to householders, they then move from gas to electricity, making the costs increase further for those who remain.
The network operators apply to the Australian Energy Regulator (AER) to increase network charges, which are then passed on, causing more houses to electrify.
The gas network has entered a classic death spiral.
Our government can put the gas network on life support by meeting some of these costs through taxpayers’ money, or they can spend this money more wisely on helping the householders help themselves, get off gas, and roll the network up more quickly and cleanly.
Our problem is that around half of Australian households are on reticulated gas. In Victoria that’s about 80 per cent or 2 million homes, in South Australia it’s also about 80 per cent.
We need to avoid the worst of what could be a painful and costly mess of uneconomical delivery of less and less gas, through old leaky networks, to fewer and fewer houses spread across all states.
We need to coordinate the roll-up as much as possible. This requires planning, collaboration and communication, while investing in the physical change from gas hot water, space heating and cooktops to electric equivalents.
The government needs to work with the gas distributors to identify the next 10 towns and suburbs that we should no longer supply gas to, and then the next 10, because to keep them on the network will be too costly.
These are the towns and suburbs that are on the furthermost points of the network or with the oldest infrastructure. Then we communicate and give those areas as much time as possible to transition to electricity and provide them with the necessary support.
It’s understood that Australian Energy Market Operator (AEMO) is studying the costs associated with decommissioning the gas network.
Maintaining the network is currently costing about $1 billion a year, and this is paid for by network charges on regular gas bills.
Even if the cost of maintenance were to miraculously plateau, individual households will still experience rising costs as others remove themselves from the grid, but the total maintenance costs remain high and must be paid for by an ever-shrinking customer base.
The best we can hope for is an orderly retreat from gas while we ensure our future energy use is both effective and efficient.
This can be delivered through improving the incentives for households to not only get off gas faster, but with good quality and highly efficient electric appliances. It’s also important to actually disconnect and remove the gas meter as we go.
The incentives need to support those who can least afford the transition, including renters. The energy efficiency schemes are well placed to help in this regard and can have multipliers to support concession card holders or renters and only allow accredited products and service providers. They can also multiply the support for householders and businesses with solar PV systems already installed, or being installed at the same time.
So we should encourage everyone, whilst focusing on those in the most costly areas of reticulation that we need to turn off first. We should upgrade as many as we can prior to a deadline and then move those remaining to either bottled gas, or even better electric, as is currently the case.
While we may fear the process from a cost and inconvenience point of view, the future is something worth rushing toward. A reduced gas network will be less costly. Currently, our towns and suburbs have two energy networks (gas and electricity) with two service providers and all the digging and maintenance that is required to keep all of that up and running.
The health benefits of not having gas in the house and leaking from cracked pipes into the air that we breathe will only be appreciated in the fullness of time, like the removal of the lead pipes in Rome.
Gas plumbers will become less busy, while electrical engineers and electricians will be in high demand.
The government needs to incentivise the reskilling of the former to become the latter. Much of the discipline and skills that gas plumbers have developed will be relevant and somewhat transferable to working with electricity.
Electrical provision of hot water, heated and cooled air, and the boiling of our spuds will save money for all, in particular those fortunate (or smart) enough to have solar panels.
Electrifying houses is relatively easy, it’s just a numbers game – big numbers for sure but the benefit of a well ordered retreat from gas is something that we hope the government is preparing us for, and then will be brave enough to attack on our behalf!
Don’t put gas on life support or let its death spiral damage all and sundry – the time to plan and act, and to act boldly, is now!
We also need to consider the impact of methane escaping as fugitive emissions from that ageing network as it is the worst by far greenhouse gas!