Cooking with gas is no option

Based on experience, there are good reasons to doubt that the Andrews government’s ban on gas connections to new homes in Victoria from January 1 next year will be the financial panacea households have been promised. Energy and Resources Minister Lily D’Ambrosio says “getting more Victorians on more efficient electric appliances” will “save them money on their bills”. With every power bill that arrives, “gas is only going to get more expensive”, she said. Going all-electric could be delivered at no extra cost to the buyer and would slash about $1000 per year off household energy bills, or up to $2200 for households that have solar installed, the government has claimed. With the change also applying to new public and social housing and public buildings such as schools, hospitals, police stations and other government buildings, the state’s long-suffering taxpayers can only hope Ms D’Ambrosio is correct.

Gas has long been regarded as essential for the transition process to a low-emissions economy. But unintended consequences from premature moves away from gas (with no choice allowed in new homes) could arise from forcing consumers on to an already strained electricity grid. Initially, at least, it will increase the use of coal. After the Labor-Greens ACT government unveiled a suite of measures to remove gas appliances from homes, schools, hospitals and offices, Australian Pipelines and Gas Association CEO Steve Davies said: “If the ACT government wants to reduce emissions, becoming even more reliant on NSW’s coal-fired generators is a strange way to do it.”

On Thursday, the Australian Energy Market Operator revealed that the cost of generating electricity rose 31 per cent in the three months to June. The huge quarter-to-quarter jump in wholesale electricity prices will be a key factor shaping how much household and business power bills will rise next year. The increase was recorded despite price caps on coal and gas, and the strengthening of global supply chains following Russia’s invasion of Ukraine.

Power industry figures in Victoria have also warned the move away from gas is likely to increase bills for households that remain on the network. That could include some of the state’s poorest people, who will probably need extra help to pay for power. Nor should the infrastructure costs to taxpayers and consolidated revenue of renewable energy be overlooked. Solar panels, wind turbines and thousands of kilometres of new transmission lines all need to be paid for.