Electrifying ignites more debate on cost

Grattan Institute energy expert Tony Wood has endorsed gas industry analysis that suggested electrifying the nation would cost upwards of $60bn.

Grattan Institute energy expert Tony Wood.

Grattan Institute energy expert Tony Wood has endorsed gas industry analysis that suggested electrifying the nation would cost upwards of $60bn, despite accusations from green lobby groups the costs were grossly underestimated.

Renewable energy lobbyists on Thursday accused the gas industry of acting like Big Tobacco and deliberately misrepresenting the cost of moving five million Australian households off gas and on to clean energy.

The attacks came after the national peak body for gas infrastructure estimated a move to electrify all Australian households could cost $66.3bn, based on modelling from the independent parliamentary budget watchdog commissioned by ACT ndependent Senator David Pocock. The figure was widely criticised by Rewiring Australia and Senator Pocock, who said it was a “baseless scare campaign” and a desperate attempt to mislead the public.

But Mr Wood said it could cost up to “$50bn or $60bn” to transition all Australian households off gas, arguing estimates from the renewable energy lobby were often underestimated. He said the independent think-tank was preparing a report into the challenges for Australia to electrify to help meet its legislated emissions reductions targets, saying electrification would be very costly and politically difficult.

Both sides of the debate had vested interests, with renewable energy proponents likely to make significant amounts of money during the nation’s transition, while the gas industry could be left behind, he said.

“We are having a very close look at the challenge of how we move away from gas, in a practical and realistic sense,” Mr Wood said. “We are not taking an ­idealistic view of the world, we’re not moralising, we’re just saying if we are going to meet our emissions reductions targets, then we’re going to need a plan for getting off gas.”

Estimates from the gas lobby revealed by The Australian this week prompted Rewiring Australia chief scientist Saul Griffith to accuse the gas industry of acting like big tobacco companies when they tried to prevent bans on cigarette advertising in the 1990s.

Mr Griffith stood by modelling by the advocacy group, which found nationwide electrification would cost about $12bn, and help households save about $3000 per year by the end of the decade.

“The American gas lobby ­failed to derail Rewiring ­America’s work delivering up to $US14,000 per household in electrification investments into America’s Inflation Reduction Act,” Dr Griffith said.

“The Australian gas lobby will fail to derail the Labor ­government’s commitment for ‘meaningful and substantial’ electrification funding in the upcoming budget. This is reminiscent of the 1990s when Big Tobacco lobbied desperately to run a rearguard campaign to prevent bans on cigarette advertising.”

Australian Pipeline and Gas Association chief executive Steve Davies hit back on Thursday, pointing to new internal modelling that found the average cost for electrifying a home in Victoria could be up to $31,000, consistent with modelling from the PBO. He called for independent modelling by the PBO to analyse the cost of full electrification for taxpayers.

Mr Davies said Australians should “welcome an open and frank discussion about the cost of electrifying homes and businesses so they can make informed decisions cost-of-living decisions about how they choose to reduce emissions.