Victoria eyes new bans on appliances to get homes off gas

Victorian homes would be forced to replace broken-down gas heaters and hot-water units with electric versions from as early as 2026 – and gas connections to new buildings would be banned – under the state government’s preferred plan to slash usage of the fossil fuel.

Documents, to be released on Friday, reveal the Allan government’s favoured option to curb Victoria’s reliance on natural gas includes a requirement for existing household gas appliances – excluding gas cooktops – to be switched to electric alternatives once they reach the end of their lives.

Gas is a key source of planet-warming emissions but remains widely used in Victoria and NSW.Credit: Adobe Stock

All new residential and commercial buildings, meanwhile, would have to be built all-electric, and would be required to fit electric stoves, the government said. This would expand an existing ban on gas connections to homes with a planning permit. Industrial and agricultural facilities are exempt.

The government is promising “genuine consultation” on the changes, and says no decisions have been made on the ideas canvassed, except to rule out existing household cooktops from the possible restrictions.

The documents project the changes coming into force as early as 2026, although the start date is also still to be finalised.

“We want to hear from Victorians on how to help households to switch to electric appliances, so they can save money on their energy bill,” Energy Minister Lily D’Ambrosio said. “This process is a genuine conversation and a way to hear the views of Victorians.”

Efforts to curb Australia’s reliance on gas – a major source of the carbon dioxide and methane emissions that are dangerously heating the planet – have come into sharper focus as governments nationally step up commitments to decarbonise.

However, looming supply shortfalls in south-eastern Australia also add urgency to efforts to cut down on use. Vast offshore gas fields in Bass Strait, which have supplied the bulk of Australia’s domestic gas for more than 50 years, have begun rapidly drying up with scant new supplies to replace them.

The risk of shortfalls and price spikes is most acute in Victoria, Australia’s largest gas user, where more than 2 million households and businesses still use the fuel for heating, cooking or hot water.

As more consumers switch to electric appliances, authorities including the competition watchdog and the Australian Energy Market Operator have issued repeated warnings that the shift is not happening fast enough to ease the worsening threat of winter supply shortages in Victoria and NSW.

D’Ambrosio said on Thursday gas would play a role in the state’s transition to cleaner sources of energy, “but supply is dwindling and prices are going up”.

“That’s why we are securing new supply and helping households and businesses switch to electric appliances, slashing their energy bills and reducing demand,” she said.

The government’s preferred option would reduce Victoria’s gas consumption by nearly 70 per cent by 2045.

Bill savings for households making the switch from gas to more efficient electric alternatives, such as heat pumps and reverse-cycle air-conditioners, could also be significant and amount to hundreds of dollars a year, the government adds.

If paired with existing rooftop solar, the savings of going electric would be even greater, of up to $2000 a year.

For customers making the switch, government rebates pay about $420 to replace a gas hot-water heater with a heat pump, $900 to replace a non-ducted gas heater with a non-ducted reverse cycle air-conditioner and $3600 to replace a ducted gas heater with a ducted reverse-cycle air-conditioner.

Friday’s release of the government’s latest electrification proposals will add to an escalating backlash from the oil and gas industry, which has argued that speeding up the shift away from gas could deter gas producers from investing in exploring and developing much-needed new local supplies of the fuel, and cause them to write off investments in the gas network faster, leading to higher bills.

Business groups have also flagged concerns, with Australian Industry Group’s Victorian head Tim Piper telling The Age on Wednesday that residents going electric would put cost pressures on the private sector by sharing gas distribution charges among fewer users.

The government documents also acknowledge that those remaining on gas are likely to face “increasing gas tariffs” because of this.

Earlier this week, the government confirmed it would use its expedited planning processes to fast-track gas extraction, storage, transmission and import projects to ensure a reliable supply for businesses.

Other options outlined in the Victorian regulatory statement on building electrification include requiring existing gas stoves to be replaced with electric ones, although the Allan government has confirmed it had ruled out changes to existing household stoves and any restrictions on the use of liquefied petroleum gas (LPG) in new or existing homes.

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