By the end of this year, the ACT Government intends to ban new gas network connections as part of their plan to transition off fossil fuels by 2045.

Fossil fuel gas is the second largest source of greenhouse emissions after transport, accounting for 23 per cent. On average, fossil fuel gas produces 371 kilotons of carbon dioxide each year.

Public consultation opened today. An Issues Paper, available on YourSay Conversations, seeks the public’s views on when new fossil fuel gas network connections should be prevented, and the need for any exemptions. The government will use that community feedback to develop the regulation.

“We want to continue to hear from Canberrans on this transition project,” Chief Minister Andrew Barr said. “The pathway towards a net zero emissions city is a long-term project, and the Government will continue to do what we can to support Canberrans to make the everyday climate choice that will make a difference.”

The government proposes that the regulation will begin by November, or as soon as is practicable afterwards, and that it will only apply to new buildings or developments that do not yet have a Building or Development Approval.

The new National Construction Code (NCC) requires that all new homes built from October must have a seven-star energy efficiency rating and minimum accessibility standards.

“The proposed regulation is an important step in readying our city for an all-electric future, and I look forward to hearing community ideas on how we achieve the best outcome for Canberra households, businesses, and industry,” Shane Rattenbury, ACT Minister for Energy and Emissions Reduction, said.

Gas use in the ACT

The ACT Government announced last year that all new fossil fuel gas connections would cease before 2045. By then, the only new connections made will be to a 100 per cent renewable gas network, or developments that are subject to exemption.

• ACT reveals pathway to electrification (4 August 2022)

According to Evoenergy, the Territory’s gas distributor, there are approximately 139,000 fossil fuel gas mains connections in the ACT.

Approximately 80 per cent of all new homes in the ACT are still connected to fossil fuel gas. Those homes will need to be converted to electricity by 2045, Mr Rattenbury said.

Businesses and industries are also establishing new gas connections.

The number of customers on Evoenergy’s gas network has grown by 2 per cent per year for the past five years, the Australian Energy Regulator states. Over 2019–2021, Evoenergy reported 8,910 new connections – almost 3,000 new connections per year.

However, existing premises are reducing gas appliance use and converting to electric appliances.

The new regulations would ensure new residences were electrified from the start, rather than having to convert to gas.

“All-electric buildings are not only a better choice for the environment, but they’re also better for future building users, and will save people money on energy costs,” Mr Barr said.

The government predicts that new fully electrified buildings would be cheaper (electricity prices are expected to fall, and retail gas prices to rise), healthier (gas combustion releases damaging pollutants), and will save the cost of conversion from gas to electricity.

The price of gas doubled between 2000 and 2020, the government noted last year, 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, would decrease by 3 per cent.

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

More than half of the ACT’s annual gas demand (51 per cent) is used by residential customers (less than 100 gigajoules per year).

Small businesses (between 100 gigajoules and 1 terajoule per year) use 16 per cent; and large commercial users (more than 1 terajoule a year) use 14 per cent.

Residential and most commercial customers use fossil gas primarily for space heating (75 per cent), water heating, and cooking. Some small businesses, such as hairdressers and beauty salons, use fossil fuel gas to heat water, while many restaurants use gas as their primary source of energy for cooking.

Some business customers use fossil fuel gas for processes that require heat, such as laundromats, food production, coffee roasters, medical sterilisation, manufacturing, glass and steelworks, and automotive bodyworks. Many pools and health facilities also use fossil fuel gas to heat high volumes of water.

Contract customers (industrial sized, directly connected to the high-pressure ‘secondary’ gas network; more than 10 terajoules per year) use 19 per cent of the ACT’s annual gas demand. This includes construction (for asphalt production), scientific research, food production, and public swimming pools. Contract customers may also use fossil fuel gas for backup electricity generation.

New gas connections are often made when all-electric builds would be better for the environment and future users of the building, the ACT Government states, because building owners and energy consumers do not have to pay for the global impacts of emissions from their gas use through their utility bills, while architects, builders, and property developers have limited incentives to consider the long-term additional costs of gas connections on tenants and owners.

The potentially higher upfront costs of all-electric buildings may deter property purchasers, as they may not factor in the long-term savings from lower energy bills and the additional costs to retrofit the property with electrical appliances. Purchasers might not be aware of the adverse environmental and health impacts of fossil fuel gas use.

“By allowing new fossil fuel gas connections to continue, we create a larger transition problem that will need to be funded by building owners and energy users in the future,” the ACT Government stated. “The longer we delay, the higher the transition costs will be.

“By regulating new gas connections, we can assist the electricity and gas network owner to plan and manage both networks in the most cost-effective way to meet the needs of Canberra. Similarly, a regulation will help builders, developers, gas fitters, electricians, gas component suppliers, gas consumers, and government plan for the ACT’s electrification.”

The ACT Government recognises that it may not always be feasible for homes and businesses to adopt electricity: for example, industrial processes requiring high grade heat, or commercial kitchens.

To help Canberrans electrify their homes and businesses, the ACT Government offers zero-interest loans as part of the Sustainable Household Scheme, rebates for low-income households to switch from gas to electric heating through the Home Energy Support Program, and rebates for small to medium businesses through the Sustainable Business Program.

Other jurisdictions both in Australia and overseas intend to phase out fossil fuel gas. Like the ACT, Victoria has removed mandatory requirements for gas infrastructure. Several American cities – including Los Angeles, New York, Chicago, and Seattle – have passed ordinances to prevent new developments from connecting to natural gas or using gas appliances, and to ban fossil fuels from most construction.