Gas ban still missing, but NSW Labor’s message on electrification is crystal clear

Last year, when Victoria’s Labor government announced it would ban residential gas connections to new-build homes in the state from the start of 2024, its counterpart in New South Wales was quick to rule out following suit.

“I don’t need another complication or another policy change when the challenges ahead of us are so serious,” NSW premier Chris Minns told 2GB radio at the time, referring to the race to get more renewables built and connected in time to replace outgoing coal.

Technically, Minns hasn’t changed his stance since then, but his government’s landmark Consumer Energy Strategy, unveiled on Monday, sends a very clear message on the fossil fuel: Homes and businesses in NSW would be much better off without gas.

“Converting gas appliances to electric can save a substantial amount on energy bills, as heating and cooling appliances and hot water systems, often gas-powered, tend to be the two highest energy drainers in a home,” the report says.

“Additionally, gas products attract fixed gas supply charges.

“Electrification also benefits residents by avoiding health impacts for those with asthma or other respiratory illnesses.”

To support these broad words of advice, the strategy includes a range of facts, figures and infographics on just how much NSW consumers can save by going electric in their homes – and just how much of their energy bill might be blown out by inefficient gas appliances.

The infographic below, for instance, sets the scene of the Lee family, which lives in a 30-year-old, four-bedroom house in Dubbo, a regional city in the state’s Orana Region.

It shows the Lees saving around $2,750 a year by switching from gas to electric power – more than double the $1,370 saved through the installation of home solar and storage.

This includes a saving of $1,670 a year by switching to electric hot water heating, $780 by switching to electric heating – and ridding themselves of the $285 a year cost of being connected to the gas network.

This sends a compelling message to the more than 1.6 million consumers in the state currently connected to the gas network – a number that the NSW government says has continued to grow, with 27,985 new connections added in 2022-23, and is probably higher once apartments are factored in.

And it is important for the state’s energy mix, too. According to 2020-21 NSW government data, consumption of gas by residential and small business customers represents 45% (51 PJ) of total gas consumption (113 PJ).

Is NSW planning to phase gas out of homes?

So will the state follow the lead of the ACT and Victoria and develop a policy to phase gas out of homes and small businesses?

Not at this stage, although the Consumer Energy Strategy does commit to the development of a NSW Gas Decarbonisation Roadmap, whatever that might mean – a move that is currently scheduled to the second half of 2026.

In the meantime, the state is setting aside money to review its current policies and how they might be adjusted to help homes and businesses to electrify.

“We have allocated $238.9 million over 4 years to develop and deliver Home Energy Saver, a new program to help households cut their energy bills, reduce cost of living pressures, reduce emissions and support grid reliability,” the strategy says.

“This new program will provide targeted financial support to eligible customers to help cut energy bills by encouraging investment in energy saving technologies.

“[It will also] review the [Energy Savings Scheme and [Peak Demand Reduction Scheme] by 2025 and consider options to enhance the schemes to help deliver the NSW Consumer Energy Strategy targets and objectives including electrification upgrades.

NSW Labor also wants to use the Home Energy Saver funds to “pilot the roll-out of electrification with selected social housing households.”

“We … want to support low-income households access the benefits of electrification,” the strategy says. “This will start with trial electrification upgrades for social housing premises.

“Fully electrified households will have lower emissions and energy bills than duel-fuelled households using gas. The cost of electrification can be significant, particularly when there are upgrades required to the electrical infrastructure of a home or apartment.

“Low-income households will be disproportionately affected by these costs and may be the last to electrify if there is no government support,” it says.