LPG part of Victoria's renewable cooking, heating & hot water needs
14 December 2023
TODAY's release of the Victorian Government's Gas Roadmap Update recognises that not all gases are the same. LPG has unique paths to net zero emissions that are commercially viable, reliable and relatively easy without the massive costs of switching to electricity.
"This Update provides important recognition that leaves the door wide open to LPG being a partner with electrification in achieving net zero, without the hefty price tag," Gas Energy Australia CEO Brett Heffernan explained.
"Today's announcement by Minister D'Ambrosio will go some way to relieving pressures on Victorian families doing it tough, showing that hugely expensive electrification isn't the only option homeowners have to achieve net zero.
"Over 356,000 Victorian families already rely on LPG for in-home cooking, hot water and heating, and it has been growing year-on-year for some 15 years. They can go on using LPG without needing to bite the bullet on switching to more expensive electrical appliances and achieve net zero emissions from bioLPG over the same timeframe as the electricity grid.
"BioLPG, likely to be available in Australia from as soon as 2025-26, is derived from waste products and is a by-product of biodiesel and sustainable aviation fuel production using the hydrotreated vegetable oil process, which is expected to be commonplace in Australia. BioLPG is a one-for-one replacement with regular LPG, requiring no additional capital costs as the same cylinders, pipes and appliances/equipment can be used seamlessly.
"It's also a much-needed boost to families in Victoria on natural gas, as they can easily and cost-effectively switch to LPG rather than electricity. The State Government's ban on natural gas connections in residential settings in 2024 does not apply to LPG.
"Switching from natural gas to LPG, typically, requires minor changes by a licensed gasfitter. If, in rare cases, natural gas equipment cannot be made LPG-compliant, new LPG appliances retail for about half the price of electrical appliances and come without the costs of rewiring homes to cope.
"BioLPG will be an important complement to electrification, providing reliable, affordable and flexible energy. Wind and solar are disappointingly not meeting their targets. With coal exiting the grid, renewable gases will be essential for homes, businesses and farms across the state, while taking pressure off an increasingly overburdened electricity sector.
"Sticking with LPG or, indeed, switching to it, can save households and businesses tens of thousands of dollars on more expensive electrical appliances, retrofitting premises to suit and/or having to upgrade homes and buildings from Phase 1 to Phase 3 wiring to cope with new power loads.
"According to modelling by Frontier Economics, the most efficient CO2 electrical appliances will set Victorian families back around $12,000 in upfront costs (appliance and installation), save a few hundred dollars over a year on bills, but would only reduce emissions by 9kg per week. That's about the volume of typical BBQ cylinder.
"In Victoria it would take homeowners 12 years to get a return on that investment. Faced with these costs, families might opt for cheaper, though less CO2 efficient, electrical appliances thinking they're doing the right thing. But emissions from these appliances are higher than gas. Switching from gas to low efficiency electrical appliances increases each Victorian home's emissions by a staggering 960kg per year.
"The gulf between rhetoric and reality is already dawning on many. Last year, Frontier Economics put the cost of switching to all-electric homes at up to $42,000. Victorian families have since told us they've been quoted not to expect change out of $50,000. In the ACT, we've been advised it runs to $55,000. One family in Canberra whose ducted gas heating system died, sought to replace it with an electric alternative. The quote was $20,000 due to all the hidden costs. Not surprisingly, they went with a new ducted gas unit.
"Today's recognition by the Victorian Government that LPG can transition to renewable alternatives and, thereby, provide an alternative to all-electric homes comes on the heels of the Tasmanian Government's Gas Strategy, which also makes it clear the industry's commitment to decarbonise is a fillip for flexible, reliable energy supply.
"Bit-by-bit the reality of net zero bioLPG is sinking in and getting traction with decision-makers. We will continue to work collaboratively with the Victorian Government on the opportunities for bioLPG to be a partner in achieving the state's dual needs for reliable energy and emission reduction targets."
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