War of words erupts over Victoria’s transition away from gas erupts

The Allan government has been lashed by a leading business group over its plans to fast-track the transition away from gas in Victoria, sparking an extraordinary war of words.

Forcing Victorians to ditch gas would clobber consumers, kill business confidence, and destroy local manufacturing, a leading business group says.

In a stunning attack on the Allan government and its energy policies, the Victorian Chamber of Commerce and Industry chief executive Paul Guerra called Labor’s plan to accelerate the electrification of new and existing buildings to cut gas use as “lazy” and “ridiculous”.

He also called for a limit on international gas exports to “put Australia first”, and said he believed it was inevitable that ageing coal-fired power stations would need to have their lives extended in Victoria.

Energy Minister Lily D’Ambrosio fired back at Mr Guerra and sparked an extraordinary war of words, accusing the Chamber of launching a “co-ordinated campaign to protect the profits of the gas industry at the expense of Victorian households”.

Lily D’Ambrosio has accused Paul Guerra of being involved in a coordinated campaign to protect the gas industry. Picture: Supplied

The government is currently consulting on the regulatory impact of making more buildings electric, including its preference to fast-track the process by forcing existing homes to replace gas heaters and hot water systems with electric ones when they expire.

Environmental groups applaud the rush to turn off gas, but industry has savaged the intervention as unnecessary and costly.

The chamber’s submission says that forced electrification would “add considerable costs to residential users which will have a direct impact on disposable income and therefore the economy more broadly”.

“It will have deleterious consequences on business and industry who will pay significantly higher prices for energy while also dealing with a cost-of-living crisis and a challenging economic environment,” it says.

Victorian Chamber of Commerce CEO Paul Guerra has slammed Labor’s plan to accelerate the electrification of Victoria. Picture: Mark Wilson. Picture: Jake Nowakowski

Mr Guerra told the Sunday Herald Sun the state was facing an energy crisis late this decade if ageing coal-fired power stations began to close as scheduled, and that although keeping them running would be expensive “there is no question that without those coal power stations, we won’t have enough electricity”.

“There is a problem coming for business if we don’t have affordable and secure gas and electricity in this state because the manufacturing sector will pick up and leave,” he said.

“People will not look to invest in Victoria. And that will have a significant impact in our ability for employment, and therefore that starts to cut into communities.”

Mr Guerra said it was “time to get rid of the ideology” and be pragmatic about getting to net zero, and that it was unacceptable that 90 per cent of Australian gas was exported.

“When are we going to put Australia first?” he said.

Yallourn Power Station will close in 2028.

As well as saying the chamber was in the pocket of the gas industry, Ms D’Ambrosio accused Mr Guerra and his business lobby group of making “deliberately false claims” in its submission.

“We’ve been clear that gas is part of our energy transition, but supply is dwindling and prices are going up,” she said.

“That’s why we’re securing more gas supply and helping families and businesses that can go electric slash their power bills, freeing up supply for industries that can’t make the switch.

“We’ve met every renewable energy target we’ve set and are on track to meet our next ones with enough renewable and storage projects in the pipeline to cover Yallourn’s capacity when it retires in 2028.”

Originally published as War of words erupts over Victoria’s transition away from gas erupts