ACT gas network heads for early shutdown as household usage drops 44%

For the climate community, the ACT's discussion paper is a powerful proof-of-concept: when consumer behaviour and policy align, fossil fuel infrastructure can become stranded far faster than expected. The territory's experience—cutting gas emissions 22% in two years while household demand plummets 44%—offers a replicable model for jurisdictions globally that are grappling with how to wind down natural gas networks without stranding consumers. The unfolding 'death spiral' dynamics here are a warning shot for gas utilities everywhere.

The Australian Capital Territory (ACT) government has issued a stark warning: parts of its gas network may need to be shut down from the mid-2030s, well ahead of the territory's planned 2045 phase-out, because rapidly declining usage is making sections of the network economically unviable. A newly released discussion paper outlines how the combined effect of households switching to electric appliances and a three-year-old ban on new gas connections is hollowing out demand, leaving a shrinking customer base to shoulder the fixed costs of maintaining the pipes. Total gas emissions in the ACT have already fallen by 22% in the past two years, and average household gas consumption has plummeted 44% between 2010 and 2024, illustrating the accelerating pace of the transition.

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The territory's experience—cutting gas emissions 22% in two years while household demand plummets 44%—offers a replicable model for jurisdictions globally that are grappling with how to wind down natural gas networks without stranding consumers.

The development marks a significant escalation in Australia's energy transition, where the 'death spiral' of gas networks—rising per-unit costs as customers exit—is now moving from theoretical risk to near-term planning reality. The ACT, which has already achieved 100% renewable electricity and banned gas connections in new homes since early 2023, is the vanguard of the country's electrification push. The discussion paper signals that the government is preparing to manage a staged, managed decline rather than waiting for an abrupt, disorderly collapse. The sections likely to be shut down first are those with few remaining customers and low utilisation that are not critical to the wider network's operation, meaning some neighbourhoods could lose gas supply while others retain it for years longer.

From a policy perspective, the ACT is treading a careful line. Climate Change Minister Suzanne Orr emphasised that the government wants to support the uptake of electric appliances rather than impose outright bans on selling new gas equipment such as heaters, stoves and ovens. This approach leans on incentives and consumer choice, perhaps to avoid political backlash, but the consultation paper makes clear that voluntary switching alone may not be enough to prevent early closures. The territory's experience will be closely watched by other Australian states and cities—Victoria and New South Wales, for instance, still have large gas networks and are grappling with their own transition pathways. The ACT's model of combining a connection ban for new builds with a long-term phase-out target and now a proactive discussion about early closures could become a template for how to wind down fossil gas infrastructure in a way that minimises stranded assets and consumer disruption.

The financial implications for remaining gas customers are severe. As more households disconnect, the fixed costs of pipeline maintenance are spread over fewer users, driving up bills and accelerating the exodus. The discussion paper describes this dynamic as a key driver of 'economic unviability' for network segments. Without intervention, lower-income households that cannot afford to electrify may be trapped paying ever-higher gas bills or left without gas when sections are abruptly closed. The government's consultation process, which seeks feedback on options to support the transition, will need to address equity concerns head-on—particularly for renters, apartment dwellers and those without upfront capital for heat pumps and induction cooktops.