July 2025

After a government has committed to phasing out natural gas, how will gas consumers respond?

How will energy prices and government rebates affect the decisions consumers make?

These are questions addressed by our choice modelling study of 1885 households in the Australian Capital Territory (ACT), where the Government has banned new gas connections and committed to phasing out natural gas by 2045, and Queanbeyan.

We asked households about the decisions they would make about replacing gas appliances under a wide range of different upfront and running costs for gas and electric appliances.

We found that most households will wait until their appliances break before replacing them and, once they do break, most households will switch to electric appliances. Roughly half of the gas appliances in the region are more than 10 years old, with many expected to require replacement over next five years. The survey responses indicate the majority of those replacements will involve switching to electric appliances, leading to disconnections from the gas network.

The pace of electrification will depend on prices and government rebates, but their impact will be limited, with only one third of households evidencing changes in their chosen fuel type in response to changing relative costs. The price elasticity of demand for residential gas connections is between -0.02 and -0.06, depending on the timeframe over which the demand response is measured. For example, a 20 per cent increase in retail gas prices today would reduce the forecast of residential gas connections in 2036 by 1 per cent relative to the forecast in 2036 without the price increase.

Costs and affordability are important factors in household thinking about how and when to replace appliances. However, the quality and performance of appliances and—for households with intentions to electrify before their appliances break—environmental concerns also play an important role.

The households likely to disconnect from the gas network soonest include owner-occupiers, and those with middle-income and/or decision makers over 60 years of age. Disconnection rates are likely to be highest in North Canberra and Belconnen and lowest in Queanbeyan, which lies over the border in New South Wales.

Details of the methodology and results, for both the survey and a detailed household-level forecasting model, are available in our report.

For further information on how The CIE could apply quantitative survey techniques to help you better understand consumer preferences, please contact Ben McNair in our Canberra office.