When it comes to powering your house, you have two options: electricity or natural gas. Although both solutions have advantages and disadvantages, we think you’re more interested in finding out which is the most cost-effective. Unfortunately, the solution to that question isn’t straightforward, so we’ll give it a shot.
Gas vs. Electricity
Before we get started, let’s go over the basics of electricity and petrol. Natural gas, which is drawn from the mains gas network, and liquefied petroleum gas (LPG), which is delivered in massive tanks that must be replaced on a regular basis, are the two types of gas available to households.
In Victoria, New South Wales, South Australia, and Western Australia, natural gas is the more popular of the two fuel alternatives. Gas is very efficient and cost-effective, but it has a narrow range of applications and is mainly useful for water heating, room heating, clothes drying, and cooking.
Electricity, on the other hand, has a wide range of uses that can be used for any of the above and more. Although many households do not have access to natural gas, almost every home requires electricity. The dilemma then becomes whether it is better to use either electricity or both electricity and gas.
Operating Costs of Electricity
Customers are paid based on the number of kilowatt-hours (kWh) of energy used. Households will also be charged a ‘Daily Supply Fee’ to offset the expense of delivering power to the home from the provider. The power prices you pay are determined by your state and distribution network. The following are the typical electricity consumption rates for each state:
28 cents per kilowatt-hour in Queensland
32c/kWh in New South Wales
30 cents per kilowatt-hour in Victoria
42c/kWh in South Australia
Western Australia: 27 cents per kilowatt-hour
26 cents per kilowatt-hour in Tasmania
Keep in mind that the specified consumption rates are for a ‘single-rate’ tariff, and consumers on time-of-use or block tariffs which be paid at significantly different rates. Depending on the tariff, daily supply charges range from 90c to $1.50 a day. Regardless of how much electricity you need, you must pay supply costs. Supply expenses will account for a larger portion of the nett costs in low-usage households. If you have a high-usage home, the situation is reversed.
Operating Costs of Natural Gas
Customers for natural gas are paid per megajoule (MJ) of gas consumed. This is in comparison to the set ‘Daily Supply Fee,’ which ranges from 65 to 85 cents a day. However, depending on the state and delivery network, this differs significantly. The below are typical gas consumption rates:
6c/MJ in Queensland
4c/MJ in New South Wales
4.2c/MJ in South Australia
11c/MJ in Western Australia
8c/MJ in Tasmania
Natural gas spends just a few cents per megajoule, as you can see. The above prices presume a single-rate tariff; nevertheless, gas tariffs often function on a “block-rate” basis, in which the rate rises incrementally as you consume more gas.
Cost of Electricity vs. Cost of Gas
Isn’t gas the most cost-effective option? Yeah, but it isn’t the whole story. Sure, a megajoule of gas is less expensive than a kilowatt-hour of electricity, but a kWh has a lot more energy. A modern electric oven, for example, uses about 2.3kWh of energy per hour, while a typical gas oven uses about 12MJ per hour.
An electric oven would cost 76c per hour to operate, while a gas oven will cost 48c per hour, assuming an average energy consumption rate of 33c/kWh and an average gas rate of 4c/MJ. While this can seem to be a minor change at first glance, the petrol savings in this situation may save you a lot of money in the long run.
If you can see, the cost of operating a gas appliance is 30 to 45 percent less than that of an electric one. Bear in mind, however, that these figures are founded on specific hypotheses that may or may not extend to your case. Western Australians, for example, pay significantly higher gas consumption prices than the rest of the country, making gas a marginally less appealing choice if you live in the west.
Costs in Purchasing Appliances
Although gas appliances are less costly to operate, they are more expensive to buy in the first place. A modern electric oven, for example, can cost anything between $700 to $1,500, while a gas oven can cost anything between $900 to $2,000. This means that deciding whether to use electricity or gas boils down to whether you want to save money now or save money later.
If you’re a big cook or like to turn on the heat, installing gas appliances could save you money in the long run, assuming you have access to natural gas. It’s crucial to remember that if you have both an electricity and a natural gas link, you’ll have to pay two regular delivery costs. This means that you can only use gas if you are certain that you can use enough to offset the extra supply fee.
How much would it cost to link to natural gas?
If you want to use natural gas but don’t already have a link, you’ll need to set up a connection with the local gas delivery network. Gas connections will cost anything from a few hundred dollars to several thousand dollars, depending on the network and the size of the work required.
If you don’t have access to a mains supply, LPG might be your only choice. Bear in mind that if you are renting, you will require approval from your landlord before adding any gas connections or appliances.
Contact the gas provider to see if you are qualifying for a mains natural gas link.
Alternatives that are more energy consuming
Remember, though, that not all electronics are created equal. For example, in this post, we looked at the expense of operating standalone heaters; but, if you have a reverse-cycle air conditioner or heat pump, you should usually expect to spend a little less on energy. Often, keep an eye out for an appliance’s energy efficiency star ranking. The higher the number of stars on an appliance, the less energy or gas it consumes. Although energy efficient models are always more costly up front, you can save money in the long run due to lower operating costs.
So, do you want to go for electricity or gas?
Gas is less expensive than power, so if you have a natural gas link, you can choose gas over electricity if possible. If you just have access to power, though, the decision between the two fuels gets a bit more difficult.
If you have access to a gas line and can afford to spend a little more on gas appliances, converting to gas can save you money in the long run – assuming you use enough of it to justify your investment. It is not recommended for consumers who do not want to stay at the same property for a long time because the gas savings would take time to justify the installation cost. In the end, the choice between energy and gas is a matter of personal preference.