Budget a ‘missed opportunity’ to electrify and decarbonise

Photo of Dr Saul Griffith in a studio with a bicycle (budget)
Dr Saul Griffith (Image: Saul Griffith)

The Commonwealth Budget fails to take the crucial first step on the path to decarbonising and slashing household energy bills, because it prioritises subsidies for fossil fuels over renewable-powered electrification of our homes, according to Rewiring Australia‘s Dr Saul Griffith.

The 2021-22 Budget contains more than $10.5 billion in fossil fuel subsidies, according to an Australia Institute analysis released this week, the vast bulk of which ($8 billion) goes to the Fuel Tax Credits Scheme. 

By contrast, the Budget should instead have directed money towards electrifying our homes and vehicles, replacing fossil fuelled devices and with solar panels, batteries, heat pumps, induction stoves, electric vehicles and household and community batteries.

Related article: Electrify everything: Rewiring Australia campaign

“Electrifying our homes and vehicles is the fastest and cheapest path to decarbonising our domestic economy. By 2030 it will save close to $5,000 per year per household on their energy bills,” Rewiring Australia chief scientist Dr Saul Griffith said.

“This budget was the perfect opportunity to start that process with a pilot program to electrify a suburb and a street. It’s disappointing to see taxpayer dollars directed to subsidising fossil fuels rather than investing for a cheaper, cleaner future. 

“This budget could have been underwriting electric vehicles that run on Australian sunshine and develop the zero emission vehicle market, but instead is investing in dated technology and the chief source of our domestic emissions.

Last year, Rewiring Australia modelled the cost benefit of total household electrification for Australia’s 10 million homes, demonstrating how Australians could take advantage of the falling costs of electric vehicles, batteries, solar, and wind, to help every Australian household save money.

It found a $12 billion investment would retrofit 10 million Australian households for full electrification by 2030 leading to national savings of more than $40 billion

And previous modelling, predicated on a petrol price of $1.46, would deliver household savings of close $5000 per year. However with petrol now at $2.20 a litre, the annual saving to households is closer to $7,000 every year.

“There are profound environmental and cost of living benefits to making the big switch to renewable-powered electrification,” Dr Griffith said.

Related article: CEC: Budget fails to prioritise renewables transition

“When you put this in context, if we redirected one year worth of fossil fuel subsidies to an eight year program of electrification we could smash domestic emissions by a third and obliterate energy bills and completely decarbonise all 10 million households in Australia.  

“Beyond the household economics this is a critical national security question. Energy independence weakens the power of oligarchs and petro states. It is unquestionably in Australia’s national interest to decarbonise, especially our vehicles.

“Renewable backed electrification is a big step toward improving the three great problems of our time, climate heating, cost of living and national security. It is a great shame the government’s Budget missed this opportunity again.   

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