Is Gas Cheaper Than Electricity?

Obviously, all homes require electricity to power the building itself and the appliances used inside.

But, when it comes to gas fittings, there are different types of gas to choose from and you have the option to use as little or much as you desire. So, to answer the question of how much gas you should use (if at all), you need to take into account: your current lifestyle, the limitations of your property, and also compare market rates.

Another key factor is the energy-efficiency of the appliances you purchase, but we’ll get to that shortly.

To help you settle the gas vs electricity debate, let’s start with the basics.

Understanding electricity and gas:

Gas:

There are two types of gas fittings you can choose from: natural gas connected to a mains network, or liquefied petroleum gas (LPG) delivered to the property in large tanks that need to be replaced regularly.

Natural gas is the most commonly used across Australia, as you receive a consistently reliable supply of gas, there’s no need to replace any tanks, and the overall running cost is a bit cheaper. Plus, natural gas emits less carbon dioxide than LPG.

However, if you live in a rural area with limited access to natural gas lines, then LPG is a perfectly viable alternative.

Gas can be used to power a variety of appliances. Some of the most common include gas stove tops, ovens, dryers, heaters, and barbecues or grills. Gas appliances are often favoured compared to their electrical counterparts – especially in cooking – as they can reach a higher temperature more quickly while being easy to adjust on the fly.

Electricity:

All homes and businesses need a constant supply of electricity to power the building itself and the associated appliances.

One advantage to electricity is that it can power a wider variety of appliances than gas. However, since most properties are guaranteed to have a source of electricity, the question isn’t really a case of electricity vs gas but rather electricity + no gas vs electricity + some gas.

Again, which option is right for you comes down to a variety of factors.

Do you already have a natural gas connection?

If not, then you’ll have to factor in the cost of professional gas fitting.

The cost to install a natural gas line is anywhere from $250 to $750 or higher. How much you pay will depend on the cost of labour, quality of materials, and how long it takes to get the job done. For that last part, the complexity of the job and distance from the gas mains network will result in a slightly higher cost.[1]

However, if the overall cost of running more gas appliances turns out cheaper than electricity, then it will only take a few years or less for the reduced energy costs to pay off the initial cost of installation.

Electricity vs gas running costs:

Current electricity rates:

As of June 2019 the current average price of electricity for households in Australia is 0.36c/kWh according to Global Petrol Prices.[2]

When you break these findings down state by state, the figures look like this:

  • VIC: 23.272c/kWh
  • QLD: 23.545c/kWh
  • NSW: 27.56c/kWh
  • SA: 37.62c/kWh

Above findings provided by Canstar Blue are based on average usage rates for six leading electricity retailers – AGL, Origin Energy, EnergyAustralia, Red Energy, Click Energy, and Alinta Energy.[3]

Keep in mind, aside from ongoing running costs, you also pay a Daily Supply Charge of around 90c to $1.50 per day, which covers the cost of your provider actually transferring electricity to your building. Regardless of how much electricity you use on a given day this fixed rate remains the same.

Current gas rates:

What about gas rates? Below is a state-by-state breakdown of average gas rates as of 2018:

  • VIC: 9c/MJ
  • QLD: 6c/MJ
  • NSW: 4c/MJ
  • SA: 4.2c/MJ[4]

While these figures are a few years old, the main takeaway from this is: you’ve probably noticed just how much cheaper gas is per megajoule compared to electricity.

So is gas automatically cheaper by default? Not quite.

Let’s compare:

While a megajoule (MJ) of gas is technically cheaper than a kilowatt (kWh) of electricity, that’s not the whole story. In reality, a single kWh provides a lot more energy than a MJ does. Which means, you need to use more MJs to achieve the same level of energy as a kWh.

But that doesn’t mean electricity is the clear winner, either.

Let’s say you live in NSW. The average cost of electricity is 26.56c/kWh compared to gas which is 4c/MJ. So if you were to run a 2.3kW electric oven it would cost you around 61.1c per hour. However, an average 12MJ gas oven would cost you around 48c per hour. While this difference may be negligible on the surface, over time this could lead to massive savings on your energy bill.[5]

Of course, certain factors like the energy-efficiency of each appliance and current market rates would result in slightly different figures. Even still, the overall cost of gas would still turn out cheaper in the end.

Which choice is right for you?

Whether or not you should convert your electrical appliances to gas is tough to answer. At least, not without first understanding your unique circumstances.

For this reason, it’s worth consulting an electrical and gas fitting expert.

By assessing your current energy usage and the energy-efficiency of your appliances, they can advise you on whether to upgrade (or repair) your appliances, make the switch to more gas appliances, or – if you aren’t connected to the gas mains – they can provide an obligation-free quote for gas installation.

After this initial consultation, you will have all the information to decide what step you should take next.

Unsure if going all-electrical is right for you? Considering the switch to more natural gas alternatives? Contact Oldmate ACT today for an obligation-free quote on professional gas fitting.


[1] https://www.homeadvisor.com/cost/plumbing/install-or-repair-gas-pipes/#avg

[2] https://www.globalpetrolprices.com/Australia/electricity_prices/

[3] https://www.canstarblue.com.au/electricity/electricity-costs-kwh/

[4] https://www.canstarblue.com.au/electricity/whats-cheaper-electricity-or-gas/

[5] https://coolaustralia.org/wp-content/uploads/2013/12/Typical-power-ratings-for-appliances.pdf

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