Energy groups reveal true cost of sweeping power changes could be thousands more than estimates
The state government’s Gas Substitution Roadmap could see households hit with conversion bills $7000 higher than original estimates.
Victoria
Don't miss out on the headlines from Victoria. Followed categories will be added to My News.
Energy groups are demanding the Andrews government release modelling for its sweeping changes to powering homes, with claims thousands of households could be hit with conversion bills at least $7000 higher than government estimates.
The state government’s Gas Substitution Roadmap, which sees government incentives for residential gas products phased out by the end of next year, encourages all new Victorian homes to be powered only by electricity, while existing dual-fuel gas/electric households are offered new appliance rebates to switch from gas.
But with more than two million residential gas users in Victoria, the biggest of any state, Gas Energy Australia and other industry bodies estimate a switch to all-electric in existing homes would cost each household $21,500 to $42,000 — while the government puts the cost at $14,500 when its solar homes rebate is included.
“Following the quiet release of the Victorian Gas Substitution Roadmap almost two months ago, and our discussions with the Minister Lily D’Ambrosio’s office in late July, the government is point-blank refusing to publicly release its modelling, which is supposed to quantify and justify the policy direction,” GEA chief executive Brett Heffernan said.
“Why the secrecy? Shouldn’t Victorians, especially the 79 per cent of households using gas, be fully informed and allowed to assess the bona fides of the policy for themselves?”
Gas Appliance Manufacturers Association of Australia president Ross Jamieson said the roadmap would impact record investments now being made in renewable gases and clean-gas appliances.
“We are dealing with complex issues which could have a profound impact on future energy security and affordability for all Victorians,” Mr Jamieson said.
“Governments and their consultants do not always get it right. The secrecy smacks of arrogance and stifles open and honest dialogue on the best way forward.”
Mr Heffernan questioned the roadmap key finding that switching to an all-electric home would cost average homeowners $15,500, saying while the change was optional, the figure was well below industry estimates.
“Frontier Economics data, which includes full modelling, shows the cost of switching is, in fact, between $21,555 and $41,430 per dwelling, depending on type and size of dwelling and appliances used.
“This does not include the extra costs to Victorian taxpayers in having to upgrade the wiring to deliver the greater electricity load to each premises for every affected metropolitan, regional, rural and remote household and business across the state.”
Under the roadmap, the government will offer new incentives through the Victorian Energy Upgrades program of $2600 to replace ducted-gas heating and cooling with electric products and $300 rebates to replace gas hot water systems with heat pump systems that can heat water directly from solar panels.
Analysis commissioned by GAMAA found that $1600 to $4000 would have to be saved on electricity bills each year to recover the cost of switching from gas to electric appliances.
“And yet the Victorian Gas Substitution Roadmap estimates households will save just $1025 to $1250 a year on electricity bills, leaving many households well out of pocket,” Australian Pipelines and Gas Association’s Jordan McCollum said.
While the roadmap supports hydrogen for industry, GEA and GAMAA say hydrogen and renewable gases including biopropane and biomethane now being developed offer a cheap, reliable option for homes while allowing the state to achieve its carbon cut target of net-zero by 2050.
“Going all-out to lock households out of gas is counter-productive - gas will be lower emission compared to electricity for at least the next 15 years, at which point renewable gases will be more mainstream,” Mr Heffernan said.
“It’s shortsighted, given the emergence of renewable, net-zero gases will achieve the same outcomes without the massive additional costs to homeowners and businesses in transitioning to electrification, or to taxpayers in upgrading the grid to cope.”
Comment has been sought from Energy Minister Lily D’Ambrosio.
Fatima Payman unveils first candidate in Victoria
A Greens candidate has spectacularly quit to join Fatima Payman’s new Australia’s Voice party and lead its Victorian Senate ticket.
Under-pressure Allan govt hits go on new homes, jobs hub on city’s fringe
A new precinct in Melbourne’s southeast that will deliver 1600 new homes and 22,000 jobs has been given the green light as pressure mounts on the government from developers fed up with delays and massive land tax bills.