by Imogen Hartmann, Editor, Energy magazine
The narrative around climate change has often been one of doom and gloom, and, although it is a very serious topic, Dr Saul Griffith argues that there’s finally a “good news story”. Dr Griffith is shifting the narrative from what we have to lose, to instead what we have to save. Here, we speak to the founder of Rewiring Australia, key architect of US President Biden administration’s electrification agenda and winner of the prestigious Macarthur Fellowship, about what he dubs as the “vaccine” for climate change: electrification.
According to Dr Griffith, the debates around climate change solutions have been too often shrouded in fear about the potential loss of exports because of Australia’s prevalence as a major coal and gas exporter.
However, he maintains that we have “a lot to win” in terms of electrification. This was the notion behind extensive modelling that was conducted for US President Joe Biden’s administration, which examined the positive aspects of the electrification transition through household economics.
Last year, Dr Griffith began applying this same energy economic modelling to Australian domestic households to assess the potential savings, but factoring in one major advantage – “the Australian rooftop solar miracle”.
Castles and cars
The original marveller of electricity, iconic Australian film The Castle protagonist Dale Kerrigan, might just have been onto something, especially with an emphasis on the importance of homes.
In early-October, Rewiring Australia, a new energy think tank, released its inaugural report, Castles and Cars: savings in the suburbs through electrifying everything, which demonstrated that Australian households could vastly reduce their energy bills through electrification, and cut domestic emissions by around one third by 2030.
The modelling in the report predicted an average household saving of $5,000 on power and the cost of owning cars and appliances by 2030.
This would be achieved by replacing conventional cars and appliances with electric vehicles, solar, batteries and efficient appliances such as heat pumps for hot water and heating and cooling.
“The future looks like vastly cheaper energy, better homes and nicer cars,” Dr Griffith said. “It is now well understood that the vaccine for climate change is electrification. As with COVID-19, we do better by going hard and going early. Australian households will save on energy and money with this electrification vaccine.”
Electrification of households would reduce domestic emissions by around 33 per cent by 2030, which would enable Australia to pledge a higher 2030 target at the Glasgow climate conference.
The abundant solar advantage
According to Dr Griffith, Australia is already the world leader in rooftop solar, with around three million solar households. This gives the country a massive head start in electrification.
“No nation is better placed to seize this opportunity for cheaper energy, self-reliance, and cleaner air than Australia,” Dr Griffith said.
“Australians already lead the world in harvesting solar electricity. Now we have the technology available to use it. “ With modest public investment in our homes, cars, and communities, we can electrify everything without sacrificing our way of life. If we embrace this shift now, we can enjoy cheaper, cleaner, healthier energy, and win the global decarbonisation race.”
“It’s written into our national poetry. We are a sunburnt country.” The Australian rooftop solar advantage is our ticket to winning the decarbonisation race.
The electrified home at a glance
In order to capitalise on Dr Griffith’s modelled savings, the electrified home would include:
» Heating systems (water heating, space heating, or cooktops) swapped from natural gas to electric heat pumps and induction hotplates
» Rooftop solar panels
» A home battery
Dr Griffith also says economics can be improved further with weatherisation, LED lighting, and other efficiencies. Perhaps the most important household electrification swap is the cars in our driveway.
According to the report, cars account for 38 per cent of household emissions and average around $3,000 per household in annual fuel expenses – making them the largest contributor to household emissions and energy costs.
When looking at the “average” Australian household, which the report deems as 2.6 people and 1.8 vehicles, vehicle fuels account for 69 per cent of the total household energy use.
The report also maintains that electrification equals efficiency, with solar or renewable-powered electric vehicles only consuming 25-35 per cent of the primary energy of their internal combustion engine alternatives.
Heat pumps (the technology that enables refrigeration and air conditioning function) can be run in a reversible or mini-split system to also heat households or water using electricity to separate out the heat and the cold from air. This allows them to use about three times less energy than water heaters or space heaters burning natural gas.
Long-term savings, upfront costs
The modelling in the report uses published data that predicts dramatic cost reductions in battery, electric vehicles and efficient electric appliances.
Dr Griffith and his co-authors project that the finance and running costs of a “rewired” home will soon be cheaper than one with a petrol car and conventional gas and electric appliances.
Millions of households are already saving with solar, storage and electric appliances. All-electric homes, appliances and vehicles will be the cheapest option by mid-decade.
Dr Griffith says that whole-home electrification of Australia’s housing stock will be an economic win for all households mid-decade. He maintains that Australia’s federal and state governments should be developing workforce capacity, industrial supply chains, and grid integration immediately to enable Australia to lead the world in decarbonising.
The paper predicts that cumulative public investment would peak at $12 billion in 2025 before delivering savings of $40 billion per year by 2030.
However, electrified end-use machines – cars, kitchen ranges, water heaters, and heating systems – while typically cheaper to operate, are more expensive to purchase.
Electric vehicles, being around 3.5 times more efficient at converting energy into motion, have the potential to unlock significant long-term cost savings when fueled by (or charged with) cheap renewable electricity.
According to the report, charging an electric vehicle, even with the existing electricity grid, would cut fueling costs in half. Despite these obvious long-term economic benefits though, the upfront costs of electric vehicles are still pricier.
The increase in electric vehicle production has only occurred recently, unlike solar and wind turbines, so they haven’t yet seen the same reduction in cost.
This is forecast to change, with nations imposing petrol car sale deadlines, but electric vehicles aren’t expected to match the same price as their petrol counterparts until 2026 – though they’re expected to be 20 per cent cheaper by 2030.
Making electrification equitable
Because of these upfront costs, Dr Griffith says that the credit of a household will very much impact a consumer’s ability to electrify, making finance a very important piece of the puzzle that needs to be considered.
“For the very wealthiest households, the savings are inconsequential and they can afford the cash,” Dr Griffith said. “I think the upfront cost does matter to the other households and the access to credit to purchase these things is a very big challenge.”
The good news is, the report records that major banks are now providing consumer financing for these types of goods, but the problem remains for those that rent their home instead of owning them.
“How do you pass the savings through the landlord? I think these are very important questions to answer if we want this to happen equitably and not become a cultural division,” Dr Griffith said.
“That’s a problem that’s only going to be solved with clever legislation and regulation and maybe even public-private partnerships with banks that will support it.”
Electric vehicles are still more expensive to purchase up front
than their petrol counterparts, but that’s set to change.
Grid neutralisation: inspiration from the internet
When it comes to removing barriers, the report indicates the need for the swift elimination of red tape, including building codes, permitting processes, zoning rules, grid standards and wholesale electricity market participation.
The report states, “Anything that acts as a barrier to these technologies being installed needs to be removed so individuals and businesses can actively participate in the new energy market.”
An essential component of this ethos is a “Grid Neutrality” policy for the National Electricity Market (NEM). Dr Griffith said years ago, the rules of the internet were designed to be completely democratic so that no data packet had any privilege over anyone – which is what needs to be applied to the NEM.
According to Dr Griffith, the rules of NEM favour the utilities, the distributors, and the generators, when there’s potential for more individual participation in the grid. We need to “level the playing field”.
“‘We need everything that can be a battery to be a battery that is playing demand response. We need everything that can generate to be a generator that is feeding into the grid, regardless of the size or scale,” Dr Griffith said.
This will ensure that all storage and generation assets on the grid have equality in dispatch, and increase system security. “It isn’t rocket science, we need to abolish subsidies for gas appliances, stop expanding gas reticulation networks, and aggressively phase out natural gas for both new households and existing households,” the report states.
Four key players
Dr Griffith says that it’s now late in the climate game and we won’t get where we want to “unless everyone plays nice”. This is in reference to the collaboration and participation of the four key energy players; governments, generators and distributors, utilities and the third parties, and the households or the consumers.
Dr Griffith argues that all four of those players can see the potential for positive economics with electrification, but what’s missing is a unilateral guiding principle.
While he believes as much of the potential savings as possible should be passed on to the household, Dr Griffith also says that there still needs to be economic motivation for the remaining three players, and therein lies the negotiation at stake.
Dr Griffith said that in order for the government, the energy industry, and the consumers to benefit from electrification, it’s going to take some give and take.
A simple solution
Dr Griffith deems the electrification solution as a simple recipe. For the household consumer, it means shifting the focus from small, frequent investments and decisions, like purchasing stainless steel water bottles and using keep-cups, to instead making a finite number of infrastructure-for-your-life decisions.
These are the types of decisions, like home and vehicle electrification, that only need to be made once every ten years or so, but with a significant impact. “I think Australia is ready for some good news stories around climate,” Dr Griffith said.
“I think the Australian public is ready for a simple story of how they can help and how they can engage.” Dr Griffith believes that caring about the climate often trumps political alignment, and there’s an overarching hunger for an answer to: what do we do?
“To be able to give a fairly simple answer that is relatable to the things in your life – your kitchen, your basement, your garage, your cars, your rooftop – is pretty reassuring,” Dr Griffith said.
As for governments, Dr Griffith believes that by not asking their constituents for sacrifice, but to instead be able to put money back in their pockets without a massive lifestyle impact, is a big draw, one that gives permission to have larger ambition when it comes to climate and energy policy.
According to the report, the time to act is now, and no sector of our economy is better poised to decarbonise first and faster than our own households: our castles and our cars.
To read the full report, go to: https://www.rewiringaustralia.org/castles-and-cars.
