Victoria announces ban on gas connections to new homes from January 2024

Gas connections will be banned in new homes and government buildings built in Victoria from next year.

The announcement has been backed by environmental groups and the property and construction sectors but the opposition has warned the change could increase household energy bills fuelled by higher demand for electricity.

The Victorian government announced the major energy reform on Friday as part of its plan to reach net zero emissions in the state by 2045.

The government estimates the change will save households up to $1,000 on their annual energy bills – or $2,200 if they have solar installed – and reduce emissions.

From 1 January, new residential properties that require planning permits, as well as government buildings including schools and hospitals, will only be powered by electricity.

The state’s energy minister, Lily D’Ambrosio, said the changes would help a new homeowner to save on their energy bills.

“We know the cost of living for Victorians is getting bigger and bigger,” she told reporters on Friday. “Doing something about it is exactly what today is about.”

Environment Victoria said the changes showed gas had “no future” in the state.

 

The state’s energy minister, Lily D’Ambrosio, said the changes would help a new homeowner to save on their energy bills.

“We know the cost of living for Victorians is getting bigger and bigger,” she told reporters on Friday. “Doing something about it is exactly what today is about.”

Environment Victoria said the changes showed gas had “no future” in the state.

“Every new building built with gas will need to be retrofitted in the future, so we welcome this move from the Victorian government to avoid investment in new gas network infrastructure and focus on reducing energy bills, and providing cleaner, healthier homes for Victorians,” she said.

The Masters Builders Association Victoria’s chief executive Michaela Lihou said the ban would help create a pathway to a sustainable future for the state’s construction industry.

The Royal Australian College of General Practitioners said the changes would reduce exposure to indoor air pollution and help tackle climate change. The RACGP’s co-deputy chair, Dr Aadhil Aziz, said the reform was a practical way to improve health.

“Gas stoves expose people to respiratory irritants, which leads to a multitude of respiratory conditions, and research indicates this includes triggering asthma in children,” he said.

The opposition on Friday argued the reform would drive up household energy bills because it coincided with a recent decision by Victoria’s Essential Service Commission (ESC) to increase the price of the default electricity offer by 25%.

Brad Rowswell, the opposition treasury spokesperson, said the changes were “desperate policy on the run”.

“We do need an orderly energy transition from our current circumstances to the ways of the future,” he said.

“I don’t think that this decision today will lead to lower energy prices.”

Innes Willox, the chief executive of business association Ai Group, said the decision was “a turning point”.

 

Brad Rowswell, the opposition treasury spokesperson, said the changes were “desperate policy on the run”.

“We do need an orderly energy transition from our current circumstances to the ways of the future,” he said.

“I don’t think that this decision today will lead to lower energy prices.”

Innes Willox, the chief executive of business association Ai Group, said the decision was “a turning point”.

“A clear decision on the future of gas at least provides some certainty. But we mustn’t underestimate the impact on appliance supply chains, and we also need to ensure that gas users continue to enjoy secure supply,” Willox said.

The announcement comes after Victoria last year announced it would scrap mandatory gas connections on new homes, which will be phased out this year.

A parliamentary committee recommended the Andrews government consider a ban on gas connections in new homes to help accelerate the state’s transition to renewables.

Last month, the ACT passed a ban on new gas connections as part of the territory’s target of reaching net zero by 2045. The New South Wales government on Friday said it had no immediate plans to match Victoria’s gas pledge.

The Victorian government will enact changes to planning provisions and schemes to ensure the changes can come into effect. It pledged to work with industry, including gas appliance manufacturers and trade unions, to support the transition.

D’Ambrosio said a new $10m residential electrification grants program would also be established. It will be available to volume home builders, developers and others to provide bulk rebates for solar panels, solar hot water and heat pumps to new homebuyers.

The Andrews government will release an updated gas substitution roadmap later this year that will outline further measures for electrification and energy efficiency to help Victoria reach net zero emissions.

 

 

 

 

cover photo:From January, new homes in Victoria will be prevented from connecting to gas and can only be powered by electricity as the government bans gas connections. Photograph: Niklas Halle’n/AFP/Getty Images