Victoria acts on electrification to free up gas supply

The Energy Efficiency Council (EEC) has welcomed the Victorian Government’s decision to cut home energy bills and free up gas for industry with a raft of new regulations designed to accelerate electrification of buildings across the state.

The state government’s decision coincides with the release of independent analysis from the EEC that shows that a program of efficiency and electrification in Victoria’s buildings could free up an average of 80 petajoules (PJ) of gas a year by 2035.

Energy Efficiency Council CEO Luke Menzel said the government’s package of reforms — which include phasing out gas hot water heaters in homes, introducing new minimum standards for rental properties, and ensuring new residential and commercial buildings are all electric — set the pace for other states.

“The Energy Efficiency Council sees this package of reforms as a big step towards an all-electric future for Victorian households and it establishes a benchmark for other states and territories to follow,” Menzel said. “These reforms will bring down energy bills for Victorian families, they will protect renters across the state, and they’ll free up gas for industry.”

The reforms, which take effect in stages, are set to:

• phase out gas hot water systems in existing homes, which will need to be replaced with efficient electric alternatives at end of life;
• bring in a raft of new minimum rental standards to reduce bills and improve the health and comfort of Victorian renters, including electrification of space heating and hot water systems and ceiling insulation for homes that have none;
• ensure all new homes and the vast bulk of commercial buildings are all electric.
   

Menzel, however, was disappointed that phasing out gas space heaters in existing homes was dropped from the package.

“Electrifying space heating is a huge opportunity for cutting bills and freeing up gas for industry,” he said. “Every Victorian with a gas bill landing on their kitchen table this winter knows how crazy gas prices have been getting. We can’t afford not to electrify our space heating in this state.

“Based on our analysis, electrifying space heating in Victorian homes could save an average of 31 PJ per year between now and 2035.

“While it is disappointing, this outcome means electrifying space heating rockets to the top of the list for the next tranche of reforms the Energy Efficiency Council will be calling on the Victorian Government to deliver.”

The state government’s reforms come as new analysis from the EEC demonstrates just how much gas can be freed up through efficiency and electrification. A preview of the analysis released by the EEC shows that Victoria’s buildings could free up an average of 80 PJ a year through to 2035 to support industries that are impacted by high prices and gas supply shortfalls.

The analysis showed that further effort on electrification and energy efficiency could cut residential gas demand from Victorian households by 64% by 2035. This could lower household energy bills and free up gas supply for core industries that will take time to switch to other fuels, including food processors, pharmaceutical manufacturers, cement producers, and pulp and paper manufacturers.

“These numbers show just how much more can be achieved through efficiency and electrification,” Menzel said. “It underlines that the solution to our gas challenge isn’t always digging more of it up, or shipping more of it in. Being smarter about the way we use gas, electrifying where it stacks up economically and saving the gas we have for higher value uses in industry, will be a big part of that transition.”

Image caption: Industrial air conditioning technician, HVAC cooling system repair. Credit: iStock.com/AndreyPopov