Stepping Up: A Smoother Pathway to Decarbonising Homes
The future of household energy use is exciting and challenging. To meet Australia’s emissions reductions targets, all households will need to electrify. However, to date, there has been a limited understanding of the shared and individual cost impacts of electrification for consumers. To address this, we engaged CSIRO and Dynamic Analysis to conduct modelling on this topic.
Based on the findings of CSIRO’s technical report, we have produced a companion policy report, Stepping Up: A Smoother Pathway to Decarbonising Homes.
The Stepping Up report and CSIRO’s modelling have the following key findings:
- The households that benefit the most from the energy transition will be those that electrify their heating, cooking and transport and have energy efficient homes. Those who remain on fossil fuels will face escalating bills.
- By 2030 the average difference in total energy costs, including transport, between a typical fossil-fuelled home and an all-electric home (without solar and a battery) will be around $2,250 per year. Households that install solar and a battery will make additional savings on top.
- As more households electrify all their appliances, the households that remain connected to gas are likely to pay much higher bills due to the need to pay higher network charges to recoup the cost of a less utilised gas network.
- Widespread uptake of EV’s won’t just benefit individuals – electricity bills for all consumers will likely come down through better network utilisation from EV use.
- People need access to the right information at the right time to empower them to make decisions about how to electrify their homes to suit their unique situation. They also need to understand why they’re being asked to make changes to the way they heat their homes, cook, and fuel their car.
- Households that face barriers to electrifying their homes will need support. We need to make sure that no-one is left behind in Australia’s energy future and that the last households to electrify are the ones that choose to wait, not those who couldn’t afford to.
The scale of the change required at the household level is unprecedented. As we decarbonise our economy, the electrification of households will play a significant role. However, how we get from where we are now to an all-electric future requires planning, support, and clear communication with households. Many households will be unable to make their changes on their own and will need support. These changes require a coordinated and proactive approach across Australia.
Our recommendation is for a new national partnership of all three levels of government to coordinate the energy transition for consumers and ensure it is as smooth as possible.
The new national partnership is needed to develop a clear and comprehensive national plan for household decarbonisation. The plan will require a combination of top-down and structural policies that enable the shift from fossil fuels to electricity, and bottom-up actions to support households when they’re making the change.
The partnership should include three key elements:
- Support consumer agency: Households need the right information at the right time from a trusted source that is clear, and in their language, to empower them to make decisions that are right for their situation.
- Financial support: The transition will be costly for some consumers. At the very least, funding is needed to support electrification of Australia’s most vulnerable households.
- Structural policies to enable change: Government policies are needed that enable, or potentially mandate, the changes required to make sure the necessary infrastructure and processes are in place to help all households electrify.