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The Debate: Is Gas Cheaper Than Electricity In Australia?

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There are a plethora of choices for Australians when it comes to energy. Among the many energy options, some homes use gas connections while others prefer electricity. But the question remains: Is gas cheaper than electricity?

Electricity is an obvious necessity in all homes for powering some appliances and the entire building. For gas fittings, however, you can select from different gas types and you have the luxury of using either very little or so much. This all depends on your preference.

So, deciding how much gas to use means you have to consider market rates, property limitations, and your lifestyle at present. Before we begin our analysis of gas vs. electricity in Australia, keep in mind that gas is available in two forms:

  • Liquefied Petroleum Gas (LPG) that you get in large tanks and have to replenish at specific intervals, and
  • Natural gas that you get from the main gas network

Throughout Australia, more households use natural gas and that’s because this energy source is quite affordable. But that doesn’t in any way mean that it is free of limitations. Some homes also do not have a natural gas connection and will have to consider the cost of setting up gas.

At this point, is it better to use gas or electricity? Or should you combine both energy sources in your home?

The Running Cost Estimates of Electricity vs Gas

First, let’s analyze gas rates in Australia. The estimated gas rates as of 2018 for different states were 4.2c/MJ, 4c/MJ, 6c/MJ, and 9c/MJ for SA, NSW, QLD, and VIC on average.

Now let’s talk about electricity rates. Last year, Australian households had a 0.36c/kWh average electricity price. If you go further to break this price down and do some analysis at the state level, you get something like 37.62c/kWh, 26.56c/kWh, 23.545c/kWh, and 23.272c/kWh for SA, NSW, QLD, and VIC, respectively.

Now, these rates above were calculated based on the average usage rates relating to some top retailers of electricity. We’re talking about retailers like Alinta Energy, Click Energy, Energy Australia, AGL, etc.

Apart from the recurring running costs, bear in mind that you are expected to remit a daily supply charge. This daily fee helps to cover electricity transfer costs from your provider to your property. The daily supply charge is a fixed rate and does not depend on your level of electricity consumption.

By citing these figures from a few years back, the point is clear. The main lesson is that when compared to electricity, gas is cheaper per megajoule. Based on this, can we then say that gas is simply cheaper than electricity by default? Let’s see.

Why is Gas Cheaper than Electricity?

Even if 1 kilowatt (kWh) of electricity tends to be cheaper than 1 megajoule (MJ) of gas, there’s more to the story. The truth is, you get more energy from a single kilowatt than a single megajoule. So, to get equal energy levels, you’ll have to use more megajoules.

However, that doesn’t not in any way make electricity a much cheaper option. Why? Here’s an illustration:

Say you live in an area where you have to pay 4c/MJ of gas compared to 26.56c/kWh. If you have an electric oven of 2.3kW to run with electricity, you’ll spend around 61.1c every hour.

But running a typical gas oven of 12MJ costs somewhere around 48c every hour. Now, this doesn’t look like much but if you calculate this difference over time, you just might notice significant savings on those energy bills of yours.

In the end, even if we considered other factors such as current market rates and the energy efficiency of the appliances, you’d still find gas to be a cheaper energy option in the long run.

Gas vs Electricity – Which is Best for You?

Is gas cheaper than electricity? Now you have your answer.

It’s up to you to decide your preferred energy source but make sure to have a cost-effective plan. In this case, you’ll have to compare prices and do some shopping around to find an energy plan that best suits the needs of your household.

The decision to convert from electrical to gas appliances isn’t always easy and that’s why you have to understand your circumstances first.

This is where an electrical and gas fitting professional can help. Have the experts determine how energy-efficient your appliances are, as well as your energy usage, at present. An expert will be in a better position to tell you if switching to gas appliances makes more sense.

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