Gas death spiral will not help power utilities

There is a persistent myth that methane gas is cheaper and better for the environment than electricity for heating of the home and water as well as cooking. I've been busting this myth via real world intervention, assisting friends and family to disconnect the gas supply for several years now.

But even I was surprised by what I discovered in helping my parents replace their gas central heater with the most energy efficient reverse-cycle air conditioner on the Australian market: Daikin's Ururu Sarara.

The sad news for the energy utilities is that my parents will not only smash their gas bill into oblivion but, in addition, their power bill will probably go down. 

It was quite astounding and reflects the fact that split-system reverse-cycle air conditioner energy efficiency has improved considerably over the last few years (other Japanese manufacturers are hot on the heels of Daikin's efficiency) while gas central heating is incredibly inefficient.

The design

Last week four Daikin split-system units were fully installed for $10,500 in my parents' home in the eastern suburbs of Melbourne.  

To ensure my mother was happy, I had to educate her about how these units can humidify the air. People commonly complain that air conditioners dry out the air which can cause discomfort and dry eyes. In fact that's the case with every type of heating system – gas ducted central heating, electric radiators, hydronic heating – they all let relative humidity drop as the temperature rises. But you don't have that problem with this particular model of heater.  

In designing the home heating replacement solution for my parents' home, we factored conservative loss estimates for a very old gas central heating unit of 40% flue losses, 30% ducting losses and 10% pressure mismatch losses (see Half your gas bill is wasted heat for an explanation). So what this means is that while the heater is rated at 23.3 kilowatts, it only manages to deliver 8.82 kilowatts of useful heat into the home, with 62% of the heat energy within the gas lost.

We decided to replace it with the smallest available Ururu Sarara units at 3.6kW heating capacity each. Even so, we significantly oversized the replacement reverse-cycle air conditioner system but, because they have inverters, they can incrementally adjust their output up and down depending on requirements. What's more, they have an override boost function allowing them to heat up to 7.5kW, so my parents will never, ever go cold.

The death of the gas bill

A year of my parents' gas bills from Energy Australia shows gas usage of 95,000MJ or 26MWh. The hot water service is consuming about 3.5MWh of that and cooking 0.5MWh leaving 22MWh for the central heater, of which only 8.5MWh is actually entering the home.

The Daikins have an energy efficiency, or coefficient of performance (COP), of 5.81 which is assessed assuming an air temperature of 7 degrees. So for every kilowatt-hour of electricity consumed the air conditioner delivers 5.81kWh of actual heat (although it's likely they'll achieve much higher COP than that, as 6-7 degrees is an average minimum temperature in June-August, while the Melbourne heating season runs for about 7-8 months).

Therefore, the 8.5MWh of heat can be delivered with just 1.5MWh of electricity.

However, the energy reductions don't stop there.

Because my parents have a large house which can't be properly zoned for heating requirements (without creating pressure equalisation/balancing problems and resultant heat loss), they previously needed to heat the whole house when only part of the house was occupied. Now it is likely that they'll only run two of the four units most of the time, given they have the option to only heat the parts of the house they are in.

We estimate this will save a further 30% off the part of their electricity bill due to heating, giving a requirement of 1.0MWh of electricity annually to heat the house.

Finally there is the benefit of humidity control which can be factored at about a 20% reduction in power consumption. This then reduces the electricity required to heat the house to 0.84MWh.

So 0.84MWh – or 840kWh – will cost a total of around $120 extra on their electricity bill assuming Powershop's prices running 60% during off-peak and 40% peak. 

This is a huge saving versus gas, which cost them $1115.

The electric bill saving surprise

I ventured under the house to assess the central heater's electricity consumption before the gas is disconnected from the house once the Sanden heat-pump water heater replaces the gas unit.

I was surprised to find the central heater's fan was using 575W of power which would run for 1000 hours per year. This means that half of the electricity that is required to run the new Daikin reverse-cycle heating system will come from decommissioning the fan on the old gas heating unit. Meaning the total additional electricity consumption will be around 265kWh, or just $50 extra on their power bill.    

So here we have an example of a house that will go from requiring 22,000kWh of space heating energy per year with gas (as well as 575kWh for its electric fan) to just an additional 265kWh in electricity over the year to provide all space heating needs. An energy saving of almost 99%.

The steak knives

The final bit to the story is that, as my parents are getting a cooling as well as a  heating system, this allows us to decommission the evaporative cooler upstairs and a 20-year-old air conditioner downstairs. The savings from not running those will be in excess of 265kWh. 

So the conversion from gas space heating to four new Daikin reverse-cycle air conditioning units will actually slightly reduce their power bill, while also destroying the gas bill.

This could well be indicative of much of the Victorian home building stock that is older than 20 years. It suggests gas utilities including SP Ausnet, Spark Infrastructure, Origin Energy and AGL may see very little compensating gain in their electricity business from the coming gas death spiral.

Matthew Wright is executive director of Zero Emissions Australia, technical director at Efficiency Matrix and resident columnist at Climate Spectator.