Running homes and cars on electricity alone would save households $5,443 a year, report finds

A new Australian thinktank says ditching domestic gas and petrol use would slash national greenhouse emissions by a third

What would you do with an extra $5,443 a year?

Converting all home appliances and cars to run on electricity could eliminate a third of Australia’s greenhouse gas emissions while saving households $40bn a year by 2028, according to a new report.

The report, Castles and Cars, by the new energy thinktank Rewiring Australia, found the average Australian household uses 102kWh of energy a day at a cost of $5,248 a year. Much of this cost comes from relying on petrol and gas to power cars, stoves, showers and heaters.

The report said internal combustion engines in cars were only 30% efficient in converting petrol or diesel to power, while water heaters relying on natural gas used three times as much energy as those using a heat pump – the same technology that runs refrigerators and air conditions. In electricity generation, many coal plants reach an efficiency of only 30% while natural gas plants reach 45% efficiency.

Replacing fossil fuel appliances and vehicles with electric models by 2030, and powering them with increasingly efficient cheap solar energy, could save households $5,443 a year and cut household emissions to zero, the report states.

It said Australia was uniquely positioned to electrify households due to its population density, capacity for renewable energy generation and existing state and territory policies.

Saul Griffith, an Australian who has advised the Biden administration on energy policy and the report’s author, said taking the best existing policies from each state and combining them with federal leadership would allow Australia to put together a comprehensive framework and “show the world how it’s done”.

“Australia is a lot closer to doing this than the general country thinks,” Griffith said. “If we go first, we’ll be selling those technologies to California. If we don’t go first they’ll be selling them to us.”

He said the first step would be a pilot program to retrofit every building in a suburb. It would become a template that could be refined before being rolled out elsewhere.

The report, developed in partnership with the Australia Institute, will be launched on Tuesday by Victoria’s energy and climate change minister, Lily D’Ambrosio. Matt Kean, the New South Wales energy and environment minister, who is expected to soon become treasurer, was due to join the launch before Gladys Berejiklian resigned as NSW premier on Friday.

Richie Merzian, from the Australia Institute, said the report was a good news story. “It reduces the solutions to climate change to a simple narrative: get to 100% clean energy, electrify everything and then turn your carbon sources into carbon sinks,” he said.

Suggestions in the report included offering rebates and finance to help low-income households switch to electricity and ensure access to solar power and battery storage as a “national priority”. It would involve programs similar to the Victorian government’s solar homes program – which aims to electrify appliances in low-income households – being expanded nationally.

D’Ambrosio said the Victorian government was developing a “gas substitution roadmap” that would “chart a long-term plan to decarbonise gas usage”.

“Electrification offers incredible opportunities to help us reach Victoria’s target of halving emissions by 2030,” she said.

Nicky Ison, energy transition manager with WWF Australia, was not involved with the report but said it was “incredibly compelling”.

“One of the problems we have when we talk about climate change and the energy transition is a lot of the focus 15-years-ago was about personal sacrifice,” Ison said. “We’ve now moved from a climate narrative based on austerity to one based on abundance and opportunity.”