When corporates purchase carbon credits and try to ‘offset’ their emissions, environmental groups would accuse them of greenwashing and to a certain extent, tokenism. Yet when Victoria state government bans gas in new homes from 2024, environmental groups were pleased and herald it as some degree or progress and victory.
It is easy to pass this off as a big move. Developers of new homes may have more planning restrictions. Those buying new homes will need to stop using gas. Gas demand growth from households will slow down but gas use in homes are a really tiny fraction of 17% contribution to the state’s emissions by the gas sector.
At the system level, Victoria’s grid emission factor in 2022 is actually such that it emits 4.6 times more carbon dioxide equivalent than combusting piped gas for an equivalent amount of energy. You can easily work that out by consulting the greenhouse emission factors published each year. Of course, I’m probably ignoring some of the emissions associated with the distribution part of things and also with fugitives. The reason for this big difference is the presence of coal-fired power plants on Victoria’s grid. In any case, all renewable energy injected into the grid from wind and solar will be used. Coal-fired power plants provide the baseload and gas-fired power plants usually absorb the additional load demand. What this means is that during the times (early morning or in the evenings) when you’re using electricity for heating or cooking in households, it is quite likely you’re consuming more gas fired power than solar power (whose generation peak in the mid-day).
There are questions on the efficiency of the whole process. Burning gas at power plants and converting them to electricity will result in some energy loss, and then using the electricity to convert it back to heat will mean a bit more losses (less than at the power plant of course); so heat applications for electricity isn’t all that efficient.
And then there is the question of energy bills. Whether you are consuming gas directly in the house or indirectly through electricity in the system, you are going to bear the cost of the gas that is consumed. In Australia, a large proportion of the cost of energy isn’t really in the energy itself but the share of cost that goes into infrastructure, especially that of distribution. Going full electric in households serves to help decarbonise the system only when the renewable electricity is supplied during the times when household’s demand peak. For solar, this is unlikely to be the case unless the household installs its own battery system to charge when solar generation is peak in mid-day. Batteries, additional distribution network assets to cater to peak renewable generation, are all infrastructure that will add to the cost of electricity.
So let us be honest about it: banning gas in residential use is unlikely to move the needle much in terms of decarbonisation in the electricity system right now. At least not all that much in Victoria. It is going to push the problem upstream where it can potentially be managed better. But a lot more actions will have to be taken. Would it improve indoor air quality for homes? Maybe, if your house is not properly ventilated but I doubt it is a very serious issue. Would it really reduce energy bills across the household? Quite unlikely. What it could accomplish is some degree of tokenism to pacify the groups of people who thinks it is a good idea.
Yet it is probably a setback for decarbonisation because we are narrowing ourselves to decarbonise by using a narrow set of technologies and forgetting about the ability to decarbonise gas through biomethane.