By Kieran Rooney, Bianca Hall and Daniella White
Home owners won’t be forced to replace broken-down gas appliances with electric ones as originally proposed by the Victorian government after it revised its electrification plans for the state.
A push to force the replacement of gas heating and cooktops has been abandoned, while plans to phase out gas hot water systems will continue, but will start from 2027 and have exemptions if the process is too expensive or difficult.
Victoria has revised its proposal for gas bans on new appliances.Credit: Bloomberg
The Victorian cabinet adopted a raft of new gas-related measures on Monday, and Premier Jacinta Allan and Energy Minister Lily D’Ambrosio on Tuesday pledged “commonsense” rules for homes and businesses, stronger protections for renters, and securing the supply of gas for industry.
Environmental groups welcomed the new electrification plan, but the Victorian Chamber of Commerce and Industry remains a vocal critic.
Allan is seeking to negate a long-running political headache in which she has sought to balance concerns about gas shortfalls and prices with the challenges of transitioning the state with the highest gas usage in the country to electricity.
In December, the government released documents showing its favoured option to curb natural gas usage would include a requirement for existing household gas appliances – excluding gas cooktops – to be switched to electric alternatives once they reach the end of their lives.
The Age last week revealed the government was considering revising this proposal ahead of cabinet discussions.
Following cabinet endorsement on Monday, these plans have been scaled back and timelines pushed out. Exemptions will also apply if installation costs for upgrades are too high or there are other limitations, such as space or a heritage overlay.
“Families will pay less on their energy bills, industry will get the gas it needs – and Victorian jobs are protected,” Allan said.
Under new regulations to take effect on March 1, 2027, a gas hot water system that reaches the end of its life must be replaced with an electric alternative, such as a heat-pump system.
Gas cooktops were already excluded from the proposal, but the government’s revised plans will also exempt gas heating systems.Credit: iStock
The government estimates this would save households $330 a year, or $520 for those with solar.
Gas hot water systems can still be repaired if they break down or are temporarily removed during renovations, with the ban only applying to gas systems that can no longer be maintained.
A home owner would be exempted from upgrading their hot water system if doing so would amount to an “unreasonable cost”, for example, it required them to upgrade their switchboard.
There will be no bans on gas heating and cooking for owner-occupiers. Cooktops were already excluded; revised plans now exempt gas heating systems too.
The most significant changes will apply to new builds, with all new homes and commercial buildings required to be all-electric from January 1, 2027.
Victoria banned gas installation in new homes with a planning permit in 2024, but this will be extended to all residential buildings and close a loophole where those without planning permits could still include natural gas connections.
The all-electric rule for commercial buildings will be a new requirement, but will include exemptions for the industrial, manufacturing and agriculture sectors.
There will be no changes for ageing gas appliances in existing commercial buildings.
Allan will also announce new details of the government’s minimum energy standards for rentals and public housing, which include stricter bans on gas appliances and will apply from March 1, 2027.
In these properties, hot water systems and heaters must be replaced at the end of their lives with heat pumps and reverse-cycle air-conditioners.
At the start of a new lease, all rental properties will be required to have shower heads with four-star water efficiency ratings, draught sealing installed on all external doors, windows and wall vents, and homes with no insulation must have ceiling insulation with a minimum rating of R5.0.
Main living areas are required to have heating, but from March 2027, they will also be required to have an electric cooling system.
Smart Energy Council chief executive John Grimes described the changes as important, noting gas was the most expensive way to heat Victorian homes and businesses.
The news was also welcomed by Friends of the Earth gas campaigner Freja Leonard, who said the reforms would help residents and businesses with cost-of-living pressures.
“We love that the nearly one-third of homes occupied by renters are prioritised, meaning that some of the most vulnerable households will see an early benefit in shifting away from expensive gas to more efficient hot water, heating and cooling options,” she said.
Environment Victoria chief executive Jono La Nauze said the reforms were vital steps forward on the state’s clean energy transformation.
“Since first announcing plans to replace outdated gas appliances in Victorian homes with efficient electric appliances, the gas industry has launched a massive PR campaign to protect its own profits at the expense of everyday Victorians’ health and hip-pockets,” he said.
Allan and D’Ambrosio unveiled the revised regulations alongside the release of a Gas Security Statement on Tuesday, which will outline their plan to avoid predicted gas shortfalls in Australia’s south-eastern states by the end of the decade.
The government estimates these reforms will unlock 12 petajoules of gas every year by 2029 and 44 petajoules annually by 2035, estimated to meet 85 per cent of Victoria’s industrial demand for the fuel source.
D’Ambrosio is also working with Commonwealth, state and territory ministers on potentially expanding the powers of the Australian Energy Market Operator (AEMO) to help shore up east-coast gas supply.
This could include the AEMO becoming a long-term customer for gas import terminals, with Victoria earlier this month giving a provisional green light for Viva Energy to build a floating gas-import terminal at its Geelong oil refinery.
Chamber of Commerce and Industry chief executive Paul Guerra said the changes removed choice for Victorians and would cost more.
“There were some that were saying this government were anti-gas, well, it looks like they might be right,” he told 3AW.
“This is ideological overrun now. The government is writing cheques on electricity that it may not be able to cash.”
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