Gas prices across Australia are expected to rise in the coming years in the wake of a growing global market for natural gas, according to a recent report from the Grattan Institute. Australia’s natural gas sector is projected to see major growth over the coming decade, which could put the country into the number one spot for natural gas exports.

While this may seem like a boon for consumers, there’s a downside: Foreign competitors may be willing to pay a certain price for Australian natural gas, which will cause prices to increase Down Under.

How much will gas prices increase?

According to the Grattan Institute’s energy program director, Tony Wood, prices will increase in proportion to the extent you rely on natural gas for your home’s power. In Melbourne, for example, many households use natural gas for all their cooking, heating and hot water needs – in these cases, energy bills could soar by about $435 per year.

The relationship between gas prices and the RET

Australia currently has a set Renewable Energy Target of 20 per cent by 2020 – that is, by the year 2020, the Australian government hopes to rely on renewable resources such as wind and solar power for a full 20 per cent of its power.

However, a recent review of the target has generated controversy among officials and environmentalists. The review recommended abandoning the scheme, which would have a number of consequences, such as allowing natural gas growth to run unchecked while eliminating incentives to switch to renewable resources. While the growth of natural gas may be seen as a plus for some aspects of the economy, the recent Grattan Institute survey indicates that it may be tough on consumers.

What can you do at home to reduce energy costs?

Mr Wood recommends taking a few courses of action to reduce energy costs.

“If you’re living in Brisbane and using gas only for cooking, you’d probably say to yourself you’re willing to pay an extra $100 to stay with LPG for the convenience of it,” he told news.com.au. “On the other hand, if your hot water, cooking and heating are all gas, that’s a very different challenge. If you move away from gas overnight, you’ve got several thousand dollars worth of new appliances to buy.”

Business Spectator noted that on average, Sydney residents who don’t currently have energy-efficient technologies in their homes will have to spend about $2,000 to save themselves $600 per year. This means that if you invest in all-new gas alternatives, you’ll see a payback in about three years. In Melbourne, that ratio was $3,000-5,000 for $1,000 in savings per year, meaning residents will see a payback about three to five-and-a-half years in.

If the latter applies to you, you may want to look into evacuated tube solar for your hot water. Energy-efficient appliances and electric power may also help reduce your costs over time.

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