The case against unconventional gas mining in Australia has been given a boost this week, with the release of a new report that predicts household demand for in gas in the nation’s eastern states could be cut in half in a matter of years, as households switch their gas heaters off, and their reverse-cycle air conditioners on.
The report, published on Wednesday by the University of Melbourne Energy Institute, forecasts declining gas demand in both electricity generation and industry, but says the most dramatic decline will be seen in the domestic market, where demand may fall by 50 per cent within a decade.
The new modelling, commissioned by the Australia Institute and a group of Victorian farmers, even outstrips AMEO forecasts of declining gas demand, despite their 2030 forecast having been cut by a staggering two-thirds.
According to AEMO data, the amount of gas consumed in eastern Australia peaked in 2012, since which time it has declined each year – and will continue to do so. AEMO’s high, medium, and low demand scenarios indicate that by 2025, gas demand in eastern Australia will have fallen from the 2012 peak by 15 per cent, 26 per cent, or 38 per cent respectively. AEMO forecasts that gas demand will decline in the industrial and electricity generation sectors.
Mark Ogge, from The Australia Institute says the MEI scenario of a 40 per cent reduction in household gas demand reflects the likely switch, by households, from increasingly pricey gas-powered heating to increasingly efficient electric alternatives.
Space-heating cost savings of $1,733 per year (a savings of 77%) were modelled for a large home in Canberra and $658 per year (63%) for a large home in Melbourne.
Around 4.4 million Australian homes already have reverse cycle air conditioners, that can both heat and cool.
According to University of Melbourne’s Tim Forcey, an energy advisor and author of the report, Victorian households alone could collectively save around $250 million in 2016, just by switching their gas heaters off, and their air-con to heating mode.
And he should know: “In my home we did that for the first time this winter,” Forcey wrote in an article published here in July.
“Our savings are remarkable, though not surprising nor different to what others in the community are reporting. As an example, during two particularly blustery days I found I could comfortably heat my house one day with gas at an energy-only cost of A$4.80 and then do it the next day with my air conditioner at a cost of just A$1.50. Our savings across the full heating season will add up to hundreds of dollars.”
Obviously, switching from gas to efficient electric heating makes even more sense for those households with rooftop solar – or planning to get it.
And there are other benefits, says Forcey, with energy savings in the residential sector opening up large quantities of gas for higher-value industrial use.
Not everyone is convinced, though, like the Energy Networks Association, which called the MEI’s claims “wildly premature” in a response to the report on Wednesday.
“Gas has always competed as a fuel of choice and Australia should not lose sight of the benefits of dual fuel energy networks to our households and economy,“ ENA CEO John Bradley said.
“Consumers will consider a range of factors including what kind of home they have, their appliance mix, cost effectiveness, environmental performance, amenity and cooking preferences.
“Gas is very price competitive – in the case of Victorian customers, the Australian Technology Association notes it remains about a quarter of the price of electricity on an equivalent energy basis.
“For households that have adopted solar to reduce emissions, gas plays an important role when the sun is not shining, by avoiding 85% of the greenhouse gas emissions from electricity use,” Bradley said.
The MEI report comes as a Victorian government inquiry into unconventional gas prepares to hand down its interim report. It has been largely crowd-funded by Victorian farmers and rural communities concerned about onshore gas drilling.
At a federal level, meanwhile, the Abbott government’s support for gas has been on par with its championing of coal.
Just over a year ago, its energy green paper focused largely on the nation’s gas industry and how to get more investment into extractive energy resources, so that Australia could become an energy “superpower.”
The green paper’s four-page executive summary mentioned gas 18 times, coal four and solar, just two. And the the 78-page body of the report, gas is mentioned 434 times; coal 100 times …. solar 26 and wind energy just 13 mentions.