New bill paves way to get gas out of Victorian homes, just days after cooktop concession

The Victorian Labor government has introduced legislation that will pave the way for the phase out of fossil gas hot water and heating in the state’s homes and businesses, just days after it was slammed for back-tracking on the policy.

State energy minister Lily D’Ambrosio said on Wednesday that the Building Legislation Amendment and Other Matters Bill 2024 would permit formal consultation on options to electrify Victorian homes when existing gas appliances reach end of life.

The minister said the government would release draft regulations for consultation in December 2024, followed by an extended public consultation period during which formal submissions can be made via Engage Victoria.

A Regulatory Impact Statement (RIS), she said, would consider end-of-life replacements for gas space heating and hot water systems while also examining the broader benefits of electrification for new residential dwellings and commercial buildings.

“Victoria is the largest user of residential gas in Australia, with two million households and businesses connected to the reticulated gas network,” a statement from the minister says.

“Converting an existing home from gas to all-electric will save the average family $1,700 per year and if they add rooftop solar, they could save $2,700 per year.”

Victoria’s Gas Substitution Roadmap already bans gas from most new homes in the state and is aiming to phase it out of existing homes by requiring households to replace old gas appliances with efficient electric alternatives, with the help of rebates and other support mechanisms.

But a statement on Monday from state premier Jacinta Allen revealed that the policy would not ban the use of gas cooktops in homes – a decision she said had been informed by consumer feedback.

The news – mostly greeted with frustration and condemnation – pleased gas lobby groups, with the Gas Appliance Manufacturers Association of Australia publicly praising Allen for what it hopefully described as a “first step towards a more commonsense approach to gas.”

By Thursday, however, its tone had changed, with a new release condemning the “impending draft regulations to force households to switch from gas to electric hot water and heating appliances.”

“The minister’s statement yesterday shows the premier’s announcement to exclude cooktops from their electrification agenda on Monday was a politically cynical move to appear conciliatory while planning other changes to remove choice and impose massive extra costs on many households,” GAMAA chief Ross Jamieson said.

“If this is such a good deal, why does the Minister need new regulations to force change rather than let households choose what works best for them?”

Environment Victoria, meanwhile, took the opportunity to welcome the Allen government’s “common sense approach that (if implemented) will make a serious difference to household energy bills.”

“As winter heating bills come in, it’s becoming clearer that gas is no longer affordable for many Victorians,” said Joy Toose, Climate Campaign manager for Environment Victoria.

“We know gas appliances are the most expensive way to heat water and homes. Phasing them out will make a real difference to the cost of living, our kids’ health, and is in line with Victoria’s greenhouse gas emissions reduction targets.”

The Green Building Council, too, commended the government for “maintaining its strong leadership on electrification and sticking to its path towards healthier, more energy-efficient buildings.”

“The Victorian Government recognises that electrification is one of the fastest and most effective ways to cut emissions and reduce costs for households and businesses,” said GBCA CEO Davina Rooney, on Thursday.

“This move is a win for both the environment and Victorians’ wallets. With energy prices continuing to rise, transitioning away from gas will deliver significant savings for households and businesses alike,” Rooney said.

On the government’s cooktops concession, opinion is divided.

As Ketan Joshi writes here on LinkedIn, the fossil industry “knows that gas stoves are a useful dead weight for locking people – particularly renters – into cruelly expensive gas connections.”

And “to see the Premier of a state happily announcing that people should continue relying on one of the most damaging fuels we know to exist is a shocking thing.”

Amandine Denis-Ryan, the CEO of IEEFA Australia, says gas hot water and heating systems represent 98 per cent of residential gas use in Victoria and are “the right appliances to prioritise.” They also make up the vast bulk of financial savings associated with electrification.

“There are several large differences between gas cooktops and other gas-based appliances,” , Denis-Ryan told One Step Off The Grid.

“Gas cooktops consume very little gas, they are less financially attractive to shift to electricity and they can be powered by bottled gas.”

But Denis-Ryan agrees that the “additional benefit” of electrifying gas cooktops is to avoid the annual fixed charge that consumers pay to maintain a gas connection.

“Increasingly, consumers are also choosing to switch away from gas cooktops for health reasons, with 12% of childhood asthma in Australia attributed to exposure to gas cooktops,” she said.