Green power push to ‘electrify’ Australian households

More Australian homes could soon run entirely on electric power, with the government planning to encourage families to ditch gas and oil amid an ongoing fight over its proposed gas price cap.

Australian households will be helped to ditch gas and go all-electric under a “significant” package Labor has promised the Greens in return for support to pass its proposed gas price cap.

Gas companies are still pushing the federal government to reconsider its plan to impose a 12-month price cap of $12 a gigajoule on uncontracted gas for the domestic east coast market, but Labor will forge ahead with legislation to be introduced to parliament on Thursday.

MPs and Senators have been recalled to Canberra for a single sitting day to consider the bill, which will also allocate $1.5 billion toward electricity bill rebates for low-income households.

To secure crossbench support to pass the Senate, Energy Minister Chris Bowen on Wednesday struck a deal with the Greens agreeing the 2023-24 federal budget would include support for Australian families to “electrify” their homes.

Mr Bowen refused to rule specific measures in or out and would not say how much the government had committed to spend on the initiative.

Support to get Aussie homes to go all-electric inside their homes is being included in next year’s federal budget.

Greens leader Adam Bandt described it as a “significant package” and said the deal was a “big win for households and the climate”.

Mr Bowen said the war in Ukraine was the primary driver of soaring energy costs in Australia.

Energy Minister Chris Bowen during question time at Parliament House in Canberra. Picture: Martin Ollman

As a result of Labor’s policy, energy prices are expected to only rise 23 per cent instead of 36 per cent next year, with households on Commonwealth support to receive an additional direct power bill subsidy of about $230 on average.

But the government’s unprecedented intervention into the energy market, which includes a temporary cap on domestic gas and coal prices, bill relief and a mandatory code of conduct requiring gas be sold at a “reasonable” price permanently, has been criticised as “rushed” and lacking in consultation.

Credit Suisse’s head of energy research Saul Kavonic told News Corp the policy “rips up” the gas market and “doesn’t replace it with anything”.

“Brace for Bowen Blackouts,” he said.

Saul Kavonic, head of energy research at Credit Suisse.

“Normally it takes a few years to alter market designs with careful consultation in order to avoid blackouts, but Labor are doing it in a few weeks with no consultation.”

Mr Kavonic said gas caps “simply don’t work” and caused shortages.

“Even Europe, with war on its doorstep, has been wary of price cap policy because of the risks,” he said.

This week Woodside Energy, Shell and other east coast gas suppliers called off talks with customers for new supply contracts in the wake of the government’s plan to have permanent ability to intervene in the market through a mandatory code.

Woodside chief executive Meg O’Neill warned the proposal it would impact gas supply, and jeopardise jobs and investment.

Industry Minister Ed Husic said the gas companies were playing the “dumbest game of chicken” by ignoring the government’s “months” of signals they were preparing to move on the code and potential gas cap.

“Multinational gas companies are squealing about the fact that the nation needs to confront these companies’ obsession with Putin profits and we have, as a government, made a decision that we need to ensure that households and businesses can get affordable access to an Australian resource,” he said.