THE rising price of gas - linked to growing exports of the product from the Australian east coast - could halve domestic demand within a decade, a new report says.

The University of Melbourne's Energy Institute report forecasts the 50% fall largely on predictions of more household consumers switching from gas heating to electric reverse-cycle air-conditioning.

Report author Tim Forcey said 4.4 million Australians already had the reverse-cycle air-conditioners fitted and Victorian consumers, which the report's modelling was based on, could save about $250 million next year by switching.

The report modelled different scenarios based on rising take-up of induction cook-tops, heat pumps and electrical heating appliances.

"Over the longer term these new economic drivers mean that many households will progressively replace old gas appliances with new electric appliances and some will see the advantages of leaving the gas grid completely," the report said.

"Already domestic gas prices in eastern Australia have increased as they become linked to overseas prices following the start of gas exports to Asia from Gladstone, Queensland, and also because of the high costs of producing coal seam gas.

"Rising gas prices and other factors are having a large negative impact on the use of gas in the electricity generation and industrial sectors."