Australian Gas Networks (AGN) has undertaken cost comparisons and found that a South Australian household can save as much as $1100 a year by using natural gas instead of electricity to fuel hot water service systems.

From 1 July 2017, retail electricity prices will increase by an average of 17.5 per cent, while retail prices for natural gas are increasing by seven per cent.

Using only the costs associated with running a household hot water service, AGN’s new figures reveal:

  • For a large family already using natural gas for cooking or heating, a yearly saving of as much as $1100 can be made by converting an existing electric hot water system to a natural gas appliance
  • For a couple in the same situation, the saving is about $405 a year
  • For a large family with no existing natural gas appliances, an annual saving of about $870 is achievable simply by swapping its existing electric hot water system for a natural gas system
  • For a couple in the same situation, the saving is about $120

The savings become even greater when a range of available rebates/discounts are used when converting to natural gas

Using natural gas also helps the environment.

In South Australia, using natural gas to fuel a household hot water service will reduce the emissions by 63 per cent compared to grid electricity, of which a lot comes from Victoria’s coal fired power stations.

Australian Gas Networks Chief Operating Officer, Andrew Staniford, said that the price gap between using natural gas and electricity for everyday household appliances is widening.

“It is also worth noting that the more gas appliances you have in your home, the cheaper your gas charges (per unit of energy consumed) become.

“That means the savings a household can achieve by using natural gas for its hot water, cooking and heating instead of electricity is even more significant,” Mr Staniford said.

Australian Gas Networks announced in May 2017 that its tariffs will increase on average by 6.4 per cent from 1 July 2017 – consistent with the price path set by the Australian Energy Regulator (AER) in its Final Decision for the SA Network in May 2016.

However Mr Staniford said AGN’s 2017/18 charges were still less than they were two years ago in 2015/16 – the average residential customer in 2017/18 will be paying $100 less per annum for their network charges when compared to 2015/16.

“The AER-determined price path approved an initial real cut of 23 per cent followed by annual CPI (1.5 per cent this year) plus X factor (3.6 per cent – which is a proposed price increase reflecting the growth in assets due to AGN’s mains replacement program) increases for each year thereafter.

“This equated to nearly 450,000 South Australian households and small businesses receiving a reduction, on average, of between $144 and $750 respectively off their annual gas bills from 1 July last year.

“Our increased tariffs enable AGN to continue to undertake its mains replacement program. This is a significant safety program, with 1000km replaced in the past (2010/11 to 2015/16) five year period, and another 1000km to be replaced in the next five year period to 2020/21,” Mr Staniford said.

“Each year, it invests around $250 million in its networks to reach new areas, improve supply and replace old gas mains.”

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