In 2045, less than a quarter-century from now, Canberra will be almost entirely powered by renewable electricity, and gas will be obsolete, the ACT Government predicts – and they want households to start planning now.

Today, Chief Minister Andrew Barr revealed the plan for a “gradual, gentle transition away from natural gas”.

“We need to make this transition in a responsible and considered manner … to provide certainty to households and businesses, but also support them during the transition.”

That transition will be led by electrification, supported by solar photovoltaics, battery energy storage, and more energy-efficient buildings and appliances.

“It will enable us to power our homes and businesses with cheaper, renewable electricity,” Mr Barr said.

Electrification is better for the environment and cheaper than gas, Shane Rattenbury, Minister for Water, Energy and Emissions Reduction, explained.

The ACT Government is committed to zero gas emissions by 2045, and fossil fuel gas is the second largest source of emissions after transport, responsible for 20 per cent.

As gas prices soar and more households “upgrade” to electric appliances, the government predicts gas consumption will decline by 60 per cent by 2045, while electricity demand will increase by 21 per cent.

The price of gas has already doubled between 2000 and 2020, and is expected to increase by a further 19 per cent by 2029 – adding $220 to an average household’s yearly gas bill. Electricity bills, however, will decrease by 3 per cent.

“The days of cheap gas in Australia appear to be over, and renewable electricity is now the cheapest and cleanest way to power our homes and businesses,” Mr Barr said.

Replacing the entire fossil fuel gas supply with renewable gas is not feasible, due to high costs, government experts say, but renewable gas might still be used for niche purposes.

Today, Mr Rattenbury, as Attorney-General, introduced a Bill to amend the Climate Change and Greenhouse Gas Regulations Act 2010, which will override national energy laws, and prohibit new gas connections for greenfield residential and urban infill development.

“We want to stop making the problem worse; we don’t want to see any more gas rolled out,” Mr Rattenbury said.

“For many Canberrans, this will come as a surprise. For a long time, we’ve been told that gas was the cheap and clean alternative. That may have been true in the ’90s, but it is no longer the case. Gas is now simply another fossil fuel that is responsible for greenhouse gas emissions that we need to cut.”

Next year, the government will release its Integrated Energy Plan, which it says will set out the big picture for how the ACT will transition away from fossil fuel gas use. It will include the gas transition pathway, community battery storage, electric vehicles, funding options to support electricity network upgrades, and renewable gas opportunities.

Over the next 15 years, households should replace gas appliances – space heating, water heating, cooking – with electric ones, at the end of their appliance’s life.

“Make the next one electric,” Mr Rattenbury said. “Don’t put another gas one in. Choose an electric one today. It’s better for the environment, and it will be better for your bank account.”

The government offers incentives for Canberrans to switch from fossil fuel gas to electricity. For households:

• The Sustainable Energy Scheme: zero-interest loans of $2,000 to $15,000 to help with the upfront costs of energy efficient products and appliances
• The Home Energy Support Program: pensioners and veterans can get rebates of up to $5,000 for sustainable home upgrades

For businesses:

• The Business Energy and Water Program: a 50 per cent rebate, capped at $5,000, to upgrade to more sustainable water and energy systems
• Solar for Business Program: free tailored advice on the best rooftop solar system for the business

Both are eligible for the Next Gen Energy Storage Program, which provides rebates for batteries (for households, $3,500 or half the battery price; for businesses, $35,000 or a third of the battery price).

“We recognise as a government that there will be costs associated with the transition away from gas,” Mr Barr said. “That’s why we want to give households and businesses certainty now, so that the transition can be gentle and gradual over the next two decades.”

For more information, visit the ACT Government’s website.

ACTCOSS response

The ACT Council of Social Service (ACTCOSS) welcomed the clarity provided by today’s announcement, but was concerned poor households and renters might be unable to afford electric appliances, and so have to pay expensive gas bills.

“ACT residential and small business gas consumers face uncertainty around Canberra’s energy transition and the future of gas, and today’s decision provides them with a clear timeframe,” Dr Emma Campbell, ACTCOSS’s CEO, said.

“However, it is critical that the transition away from fossil fuel gas does not lead to higher costs or inequity for people on low incomes or other vulnerable individuals. 

“For renters and people on low incomes, upgrading their appliances may not be an option. These Canberrans are already spending a greater portion of their income on energy bills than the average household, and are most likely to be impacted by cost increases.

“It is important that we do not end up with vulnerable people stranded on the gas network, paying an increasing premium for basic human needs such as hot water, meals, or to heat their houses. This is a real danger unless we have a comprehensive energy transition strategy.

“The ACT Government needs to do much more to target Canberrans who have the least. The vast majority of the support announced so far has not targeted people on low incomes. ACTCOSS will continue to work closely with the government to achieve a comprehensive and just transition.”

Conservation Council response

The Conservation Council ACT Region welcomed the ACT Government’s “forward-looking policy”, saying it would “provide clear guidance to households and businesses alike that change is coming, and that the sooner we adjust, the easier the transition will be”, executive director Helen Oakey said.

“To transition away from fossil gas is an ambitious policy for a cold-climate city that has the second highest use of gas per capita, and 131,550 households and businesses connected to Canberra’s gas network.

“However, phasing out fossil gas for heating, cooking, and hot water is very doable given the alternative technologies that are available. The good news is that those technologies are often more efficient, cleaner, and can save money on energy bills.

“Heat pump technology can deliver energy into homes much more efficiently than resistance appliances, and new appliances such as induction cooktops can provide accurate, clean, and efficient cooking options.

“Households are already getting off gas as they understand the benefits: 33 per cent of homes are already all-electric, and 75 per cent of gas-fired homes are already considering or switching one or more gas appliances to electric.

“While the up-front costs can be off putting for some households, new appliances can reduce running costs for homeowners by cutting energy bills significantly. However, it will be important for the ACT Government to continue support for low-income households through the transition.”

The Conservation Council was pleased the government would not replace fossil gas with biogas or hydrogen as a long-term solution.

“The production of biogas at scale is not a realistic option to replace fossil gas across the Territory’s gas network, and can still have climate impacts,” Ms Oakey said. “Substituting hydrogen produced using renewable energy is also a highly inefficient way of delivering energy into our homes when we can power them directly with renewables. There will be other uses for green hydrogen that don’t include the residential network.”

Given new developments will be unable to hook up to the gas grid from 2023, Ms Oakey urged all developers and home builders to move ahead of this timeline, and stop new builds with gas connections right now.

“This is essential – both from a “do no more harm” perspective on climate change, but also because of the future expense transitioning properties off the gas network over the next two decades compared to building all-electric now.

“The ACT is once again leading other states and territories on climate action, and this decision should resonate around Australia. It must also send a strong message to the Federal Government who should stop supporting new fossil gas developments in Australia.”