Electrification: Australia’s path to savings?

Saul Griffith’s blueprint for electrifying Australian homes and businesses reveals a powerful financial opportunity: shifting away from fossil fuels could deliver trillions in savings and safeguard Australians against volatile energy prices. By focusing on efficiency, regulatory innovation, and community-charged solutions, Griffith’s approach showcases a model for business leaders seeking scalable decarbonisation solutions.

Mass electrification could drive national savings

Griffith, a former climate adviser to the Biden Administration who lives in Wollongong south of Sydney, told SXSW Sydney audiences that Australia needs to make all water heaters electric by 2040, compared with 50 per cent now; likewise with cooktops, of which 60 per cent are electric; and with cars, of which only 3 per cent are electric.

Doing so would save the nation over $50 billion a year by 2035 and $65 billion dollars or more by 2040, Griffith said. And by 2050, “going all in on electrification” could create annual savings of $1.7 trillion. Much of Griffith’s work, however, is targeted at individual households, whose behaviour could drive significant decarbonisation results and shape demand, expectations and policy settings for industry.

A home with gas appliances and petrol vehicles could save close to $4000 a year if it went electric, but many householders don’t feel they can borrow money to buy electric vehicles and appliances.

"Going all in on electrification could create annual savings of $1.7 trillion." - Saul Griffith, Rewiring Australia, Founder & Chief Scientist

Efficiency as a strategic business advantage

If an average Australian home went all electric with cars and appliances, and the power was produced by wind and solar, it would use 32 kilowatt (kWh) hours per day of energy rather than the 120 kWh of mixed energy the consumer now uses. “That's the efficiency of electrification,” he said.

“Even if our homes still are leaky and our cars are too big, as long as they're electric, we can get the job done.”

He urges householders in Australia to electrify by making five big decisions over the next 10 to 15 years, such as when it comes time to replace the old car, buy an electric vehicle or when the gas hot water heater breaks down, replace it with electric.

Anti-inflationary investment

The debate about transitioning the economy focuses on the cost, but should instead focus on the money to be saved by moving away from fossil fuels.

“Once you buy solar, you're buying 20 years of sunshine up front, and you're buying it on finance, then you have fixed-interest finance bills for 20 years. This is like, literally anti-inflationary,” he said. “So we could as a nation decide to really invest in this legislation and will be anti-inflationary. It will help us in this cost-of-goods crisis.”

A blueprint for business leaders and job growth

Griffith is the author of The Big Switch, Australia’s electric future, which sets out a detailed blueprint for fighting climate change while creating millions of new jobs.

He says Australia has other advantages when it comes to electrifying the nation: “We have extraordinary renewables, we have expensive petrol, we have expensive natural gas, and we have a mild climate.”

Griffith said 2050 is fast approaching, “yet nobody has figured out how to get a community with zero emissions.” “You can't really say that there's any place in the world that works.”

“Even if our homes still are leaky and our cars are too big, as long as they're electric, we can get the job done.” - Saul Griffith, Rewiring Australia, Founder & Chief Scientist

Stakeholder engagement and consultation

This sobering fact was the genesis of the Electrify 2515 Community Project, a community pilot to offer subsidies and support to 500 households in the 2515 postcode to upgrade to electric appliances.

Griffith said the idea is to showcase that homes and communities can electrify and hit a zero emissions target. “It looks better and operates better than a traditional community – that was the goal, to sort of create the future prototype in the real world,” he said. “This will be the biggest project of its kind in the world.”

The community of 4500 households is served by an electricity substation, which is not only the Australian average size, but also the global average. “You've heard everyone complain, Oh, the grid won't handle the solar. It won't handle electrification,” he said.

“We're going to prove on an exactly average substation that you can do the whole thing and it doesn't break and it saves people money.”

Electric infrastructure innovations to reduce costs

The project – which is driven by Rewiring Australia, Endeavour Energy, Brighte and the Australian Renewable Energy Agency (ARENA) and others – is measuring the “soft costs” of installing electric equipment. These are the costs in addition to the price of the equipment itself, such as any necessary permits and services from tradespeople.

For solar these are already low in Australia – five times cheaper than in the US, Griffith said – and the project is aiming to “smash down” the soft costs of other equipment such as electric cookers and water heaters.

It is also measuring the electricity flows to every household from the substation. “Another part is to prove the coordination, so that we can coordinate all of these electricity flows in ways that won't break the substation, " Griffith said.

Finally, they are using the data they gather to model the economics of electrification for households. “The data that goes into it really confirmed that the micro economics for the household, the macroeconomics for the country, are really good, which hopefully will give politicians permission to have bigger, more ambitious policies,” he said.

“If we do a great job I think we should be able to get every subsequent house in Australia, every subsequent suburb, a discount on this future, and we will make it happen soon.”