Victoria is clearly moving away from gas and it won’t be easy

Victorian households are being moved off gas and the process won’t be easy.

Victorian Minister for Energy Lily D'Ambrosio on Friday. Picture: Luis Enrique Ascui

When announcing a ban on gas connections in new homes from next year, Energy Minister Lily D’Ambrosio took aim at soaring prices.

“We know that with every bill that arrives, gas is only going to get more expensive,” she said.

That’s grim news for the 2 million households and businesses that still rely on gas in Victoria.

Banning new builds from hooking into the gas network sends a clear message to industry about government intentions, but on its own it is a relatively simple proposition.

Going electric when starting from scratch won’t, as D’Ambrosio said, hit the hip pocket hard.

What the government does next in terms of the Victorian homes still reliant on gas, is likely to be much more complex.

Shifting existing homes of gas won’t be easy.

To shift those homes off gas will be an expensive exercise for those in ageing homes where electrical mains upgrades may be required, on top of appliance replacements.

What will the transition arrangements be for these homes – particularly for those who can’t afford upfront costs?

D’Ambrosio is right that gas has become more expensive, but there is a risk that during the phase out she wants, prices will go even higher.

She is also right that to meet climate change targets we cannot keep relying on the fuels that have served us well in the past.

But major investments have been made in the gas network, such as new pipelines and government-mandated upgrades, meaning businesses will now recoup those costs among fewer gas users, and bills could soar further.

If, as the government says, gas prices are expected to stay higher anyway, then that’s a double whammy.

There’s also the impact on the electricity grid, which is playing catch up with renewable installation and transmission.

If we can’t get enough renewables built to cater to soaring demand, would the government extend the life of coal plants, which pollute at a higher rate?

The government is promising to release an updated “gas substitution road map” soon.

Hopefully that will include some clearer signposts about its plans for the majority of Victorians still cooking with gas.