Gas hot water
Looking at doing a renovation of the kitchen and the hot water cylinder is in the way...
With all the current talk about gas connections being retired, would you personally still consider a switch of hot water to gas?
Posted Feb 22, 2021, 10:19 AM UTC
Gas will allow no new connections to the house after 2025, but will still be around in 50 years time.
There is nothing stopping you going to gas, though I have a feeling price hikes for gas that we've had recently may continue and so electricity may be cheaper long term and would be my choice. It's a gamble though right?
Wholesale gas (natural gas and by extension LPG) supply is predicted to effectively run out/be unprofitable to operate by around 2040-2045. No new significant resources of gas in NZ have been identified in the last decade or so that can be efficiently extracted, so supply will start to decline significantly after the end of this decade. Pohokura are experiencing severe well decline at the moment, Kupe are trucking along but I'm not aware of any new drilling programs in the near future (it keeps changing hands so that should tell you a lot about the long term viability of the asset), OMV have some hope for the Maui field drilling but I'm not super optimistic, Todd have decent reserves but they are going to start really tapping into them now (they will likely be the last significant producers of gas by the late 2030s).
This is evident by the fact that Methanex (who use around half the country's supply of natural gas) intend to cease operations around 2030 just due to the lack of (cheap) supply (and thus increasing feedstock prices). This will cause a temporary reduction in demand but only short lived (they will wind down operations slowly between now and 2030, they already are by closing down the Waitara Valley reformer and announcing new redundancies this week).
In the run up between now and 2040-2045, economies of scale will start to make LPG increasingly less and less economic to use and the price will keep rising. This will naturally lead into less hydrocarbon use just through natural attrition but domestic users will suffer the most in terms of LPG sale value as they are the most susceptible to market rates (compared to long term contracts for industrial/commercial users). Importing LPG is not a viable option large scale, it is already imported during winter to cover demand but current supply offsets the extra cost of importation.
I don't believe LPG will be an affordable energy source for domestic users by 2040, let alone in 50 years time.
In saying that, I have an LPG system for cooking and infinity water. I won't be getting rid of it and I would probably replace it now, just because I really like gas cooking. The cost of a few thousand to replace the system now when you're betting on what will happen in 15+ years time is kind of irrelevant imo. The kit will probably be replaced between now and then anyways as more efficient water heaters etc come to market.
Yeah it is a gamble, I can see the price rising more after 2025
I’m in the Deep South so tankless systems that will cope when it’s a bit colder seem to be hard to find