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Relevance of distributors assumptions questioned by ESC in Victorian gas review; ducted gas heating uses significantly more gas than suggested

Posted by gmarkets on 3 September, 2007

The Draft Decision of Victoria’s Essential Services Commission’s Gas Access Arrangement Review 2008-2012 questioned the relevance of data provided by distributors. Data partly stems from 1999: “The distributors have assumed that the total annual reduction in energy (i.e. gas and electricity) usage as a result of the 5 star building requirements will be from 20 2 GJ to 23.1 GJ (depending on the tool used to estimate savings), and of these reductions 86 per cent will be due to natural gas,” the Commission said. “This 86 per cent reduction is based on data contained in a June 2002 report by Energy Efficiency Solutions (EES). In turn this data is based on information from a number of sources, including 1999 studies by BIS Shrapnel and EES. While the Commission does not doubt the veracity of these figures, it notes that they are based on relatively outdated information and may no longer be relevant.”

Patterns changing: “There have been a number of shifts in domestic energy usage patterns in recent years as shown in table 11.8,” the Commission said. “This data suggests that:

• electricity has slightly increased market share for space heating, although this is not at the expense of reticulated gas; and

• gas has increased its share of the hot water market and electricity has lost market share.

The data also shows that while the proportion of homes using gas for space heating has changed little, the percentage of homes with ducted gas heating has increased significantly (from 31.5 per cent in 1999 to 40.1 per cent in 2005) and the percentage with non ducted heating has fallen (from 40.1 per cent in 1999 to 33.0 per cent in 2005). This is a relatively large increase and implies both that:

• a substantial proportion of new dwellings being constructed will have gas central heating; and

• there has been some level of conversion to gas central heating from existing dwellings.”

Understanding new homes: “In a report for DSE in April 2007 George Wilkenfeld and Associates noted that ‘the preferred form of main heating is clearly shifting from room heaters to central heaters, and the utilities report that central heating is installed in the great majority (of) new gas-connected homes,” the Commission noted. “According to data supplied by the distributors ducted gas heating uses slightly less than double the amount of gas than non-ducted heating (for an equivalent star rating). In order to inform itself regarding energy usage in new homes the Commission has held informal discussions with a cross-section of major building companies in Victoria. Builders contacted include Metricon Homes, Simonds Homes, Dennis Family Homes and Zuccala Homes. The Commission has also reviewed standard housing and appliance specification lists for a number of builders.”

General trends emerge: “While the Commission is not able to provide specific details for reasons of commercial confidentiality, a number of general trends were apparent. These include:

• where natural gas is available almost 100 per cent of homes use gas as the prime source of heating and the vast majority of this is ducted heating;

• standalone heaters are typically only installed in smaller dwellings;

• ducted heating is usually three star, and more infrequently three and a half or four star; and

• following recent price increases for water tanks and price decreases for solar panels, there appears to be a strong preference for gas boosted solar hot water over rainwater tanks.

Information provided by the distributors indicates that on average three to four star ducted gas heating uses 50 to 56 GJ per annum,” the Commission continued. “This is substantially higher than the average use forecast by the distributors for 2007 of between 33 and 39 GJ, even without considering gas usage for hot water and cooking. It is also worth noting that while the distributors have suggested that increased use of reverse cycle air conditioning in Victoria is displacing gas for heating purposes. this is not supported by empirical evidence.”

Reference: Gas Access Arrangement Review 2008-2012, Essential Services Commission, Draft Decision, Executive Summary, 28 August 2007.

Erisk Net, 2/9/2007

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