Fossil gas ‒ households in hot water

By Jim Crosthwaite and Amaryll Perlesz

In the last issue of Chain Reaction, I explained that emissions of fossil gas need to be tackled on many fronts (Crosthwaite 2020a). Here I look at gas used for heating hot water in households.

Household use of gas helps to legitimate the fossil gas industry, which loves to promote gas as clean and natural (ENA 2017a, 2017b), and even warm and cuddly (Mazengarb 2020). The industry will do everything possible to ensure households remain connected to the gas supply. How can the climate movement challenge this?

There is a huge opportunity for massive change away from household gas in the next 15 years. By 2035, nearly every hot water service (HWS) in Australia will be replaced. Their expected life is only 10–12 years.

Imagine over three million gas-run HWS being replaced by electric! That should be our ambition with the heat source being a heat pump, solar thermal, PV diverter, direct PV or an instantaneous electric system (RENEW 2017).

In 2014, ABS found an estimated 3.4 million HWS in Australia running on mains gas, and another 387,900 running on LPG/bottled gas. 75% of Melbourne households relied on gas for hot water, as did over 60% of households in Adelaide and Perth and 46% in the ACT, falling to 35% in Sydney and 13% in Brisbane. In regional Victoria, 45% were estimated to use mains gas, and 7% used LPG/bottled gas. Over 10% of households in regional Queensland, South Australia and Western Australia relied on LPG/bottled gas (ABS 2014).

Building momentum away from fossil gas in households will have flow-on effects. As people disconnect from gas, they will become community advocates for a renewable economy. Scepticism about advertising by the fossil gas industry will grow. Reducing demand for gas will be recognised as better than expanding supply to meet so-called shortages.

The problem

Unfortunately, without public intervention, most gas HWS will be replaced with another gas one because of price and decision-making by households, landlords and builders. Continued use of gas for hot water is not a massive source of emissions, but it will delay Australian households going all-electric for cooking, heating and cooling, and disconnecting the gas.

Here are three barriers that will require a strong community campaign to address.

Decision-making process and who is involved. Going without hot water is most inconvenient, and people who own their own homes will rush to ring a plumber and get a new appliance as soon as possible. They will typically make a snap decision. Weighing up the pros and cons of going electric, and choosing the right type of electrically run service, takes time and energy.

Only 10-15% of new HWS are 'considered purchases' by owners. A massive 55-65% are 'emergency purchases' after breakdown (E3 Hot Water Systems Roadmap 2018). The plumber or retailer has a major influence on these decisions.

Builders of new houses install the remaining 25‒30% of new HWS. They are driven by capital cost, without regard for the running cost to be borne by the household. The owner of an investment property will have similar priorities.

Price. Running costs of electric HWS are cheaper than for gas, whereas upfront costs are higher. However, recent increases in the domestic cost of fossil gas makes the additional capital cost of an electric HWS with a high efficiency heat pump a more attractive proposition in both the short and longer term. The financial impact of going off gas depend on location, household intention and gas price; replacing gas is certainly best if it is the first step towards an all-electric home (Lombard & Price 2018).

Commercial reality of the gas industry, its regulation and standards. As illustrated above, households do not make decisions about HWS in isolation, if they make them at all. The plumber, the appliance retailer, the builder and even the architect are all likely to be expert in gas systems, rather than the alternatives. They need to be guided and helped as part of a just transition away from fossil fuels.

There are many standards and regulatory issues, at state and commonwealth levels, that need to be addressed. Allston (2020) highlights the hurdles faced in making the shift to an all-electric home in Victoria. These are also clear in Environment Victoria's report on opportunities to reduce gas use (Northmore Gordon 2020) and in the work of the Greenhouse and Energy Minimum Standards Regulator (GEMS 2018).

Meanwhile, gas industry players are writing detailed reports, making submissions or lobbying to maintain regulations and standards that suit them. There are seven associations covering different parts of the industry (Crosthwaite 2020a, 2020b), but most of them have a shared 2050 vision (ENA 2017a), using the promise of hydrogen technology as a cover for continued use of gas (Forcey 2018).

Vigilance is required! Even green energy suppliers have recently moved into selling gas to households. Energy Locals was granted a Victorian retail licence on 6 May 2020, and Powershop some years earlier (see the Essential Services Commission website). Let's make this an opportunity, as outlined below.

Options for action on gas HWS

Why not ask your group to brainstorm what might be done about household use of gas – get the ideas down, then prioritise them for action.

Emergency advice

  • Councils and state government to promote accredited green plumbers and electricians
  • An independent hotline to ring for expert advice when the HWS breaks down
  • Promotion through council rate notices, community groups, church groups, social media
  • Magnetic fridge stickers with the hotline number and other key advice

Green energy retailers

  • Produce a public plan with 3, 5 and 10-year targets for shifting customers off gas
  • Use the plan to attract new customers keen to get off gas, but who need time to transition
  • Use customer notices encouraging the move off gas
  • Offer generous support to allow customers to pay off the installation over time
  • Partner with Earthworker (see below) in delivering all-electric services using renewable energy and a heat pump

Worker and business support

  • Subsidies for training for gas fitters and other plumbers in how to work with heat pumps and solar thermal system (typically with tubes on the roof) and other HWS systems
  • Training and other support for plumbing firms to work on heat pumps as well as the hot water tanks and other plumbing
  • Working with businesses in the gas appliance supply chain to identify issues, and help shift them away from gas
  • Support for worker-owned cooperatives like Earthworker – www.earthworker.com.au ‒ manufacturing, supplying and fitting hot water tanks and highly efficient heat pumps

Financial incentives and disincentives for owners

  • Higher rates for premises that replace gas HWS with gas rather than electric. This would require mandatory registration of all HWS replacements by the installer
  • Grants to help pay upfront costs of electric HWS, but also to go all electric
  • Grants for landlords to go electric if the old system breaks down

Lobbying state governments

  • Regulation to require replacement of gas HWS when they break down with electric – after a sunset period, say 5 years
  • Public housing packages to give priority to going all electric — new builds & upgrades

Community housing industry

  • Regulation to require industry members of Community Housing Industry Association (CHIA) to install electric HWS and heat pumps in new and re-furbished community housing builds

Local councils and community groups

  • What should climate emergency and similar plans say on this issue?
  • What role for councils, groups of councils, local business networks and communities?
  • How to maintain vigilance in monitoring gas industry behaviour and government action or inaction on standards and regulations?

Keeping up to date

  • RenewEconomy reports frequently on the fossil gas industry www.reneweconomy.com.au
  • Australian Gas Market Insights, www.facebook.com/groups/AustralianGasMarketInsights
  • 'My Efficient Electric Home' facebook group, www.facebook.com/groups/MyEfficientElectricHome

Jim Crosthwaite is a member of Friends of the Earth Melbourne. Amaryll Perlesz is a member of Darebin Climate Action Now.

References:

‒ ABS (2014) Environmental Issues: Energy Use and Conservation. Australian Bureau of Statistics. Cat. 4602.0.55.001. Data Cube, available at https://www.abs.gov.au/AUSSTATS/[email protected]/Lookup/4602.0.55.001Main+Features1Mar%202014?OpenDocument (accessed 26 June 2020).

‒ Allston, J. (2020) 'Building all-electric homes – and why ditching gas isn't as easy as it should be', One Step Off The Grid, 13 May. Available at: https://onestepoffthegrid.com.au/building-all-electric-homes-why-ditching-gas-isnt-as-easy-as-it-should-be/ (Accessed: 28 June 2020).

‒ Crosthwaite, J. (2020a) How can we transition the fossil gas industry Chain Reaction #138 pp.36-38. https://www.foe.org.au/how_can_we_transition_the_fossil_gas_industry

‒ Crosthwaite, J. (2020b) Just transition to a sustainable future without 'fossil' gas. Washington, H., Lawn, P., Blackwell, B. Ecological Economics: Solutions Now and in the Future. Sydney: ANZSEE.

‒ ENA (2017a) Gas Vision 2050 [online]. Energy Networks Australia. https://www.energynetworks.com.au/gas-vision-2050. [Accessed: 13 March 2020].

‒ ENA (2017b) Gas for Australian Homes [online]. Energy Networks Australia. Available from: https://www.energynetworks.com.au/assets/uploads/gas_for_australian_homes_october_2017.pdf [Accessed: 13 March 2020].

‒ Forcey, T. (2018) Beware fossil-gas suppliers bearing hydrogen gifts. RenewEconomy. Available at: https://reneweconomy.com.au/beware-fossil-gas-suppliers-bearing-hydrogen-gifts-73041/ (Accessed: 28 June 2020).

‒  GEMS Regulator (2018) Policy Framework: Hot Water Systems in Australia & New Zealand | Energy Rating. Greenhouse and Energy Minimum Standards Regulator. Available at: https://www.energyrating.gov.au/document/policy-framework-hot-water-systems-australia-new-zealand (Accessed: 15 March 2020).

‒  Lombard, D. and Price, K. (2018) 'Gas versus electricity: Your hip pocket guide', Renew, (143). Available at: https://renew.org.au/renew-magazine/efficient-homes/gas-versus-electricity/ (Accessed: 5 April 2020).

‒  Mazengarb, M. (2020) 'The Australian Instagram influencers being paid to promote gas', RenewEconomy, 25 June. Available at: https://reneweconomy.com.au/the-australian-instagram-influencers-being-paid-to-promote-gas-18028/ (Accessed: 26 June 2020).

‒  Northmore Gordon (2020) Victorian Gas Market – Demand Side Measures Review.

Report Prepared for Environment Victoria. 23 March 2020. Available at https://environmentvictoria.org.au/2020/06/03/victorian-gas-market-demand-side-measures-to-avoid-forecast-supply-shortfall/ (accessed 26 June 2020)

‒  Renew (2017) Hot water buyers guide - Renew magazine. Available at:  https://renew.org.au/renew-magazine/buyers-guides/hot-water-buyers-guide/. See also the 2020 update at https://renew.org.au/renew-magazine/buyers-guides/hot-water-buyers-guide-2/ (Accessed: 27 May 2020).

Published in Chain Reaction #139, national magazine of Friends of the Earth Australia, May 2021. www.foe.org.au/chain-reaction


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