Yes, Victoria’s efforts to separate the household from the gas have been dialed. But that’s still a real progress

On the gas issue, the Victorian government faces pressure from many directions.

Base Strait wells, which supply the most gas-dependent state in Australia, are dry. Gas prices skyrocketed in 2020 and remained high. Natural gas is mainly methane, a powerful greenhouse gas.

However, it is difficult to wean more than 2 million gas-used households from fossil fuels. Gas lobby, like the Victorian Chamber of Commerce, was pushed back against the proposed changes, but resistance from some stakeholders led to backdowns of Gascooktop’s phase-out plan.

So the government’s decision to introduce most of the proposed changes is good news. Early plans calling for electricity to replace dead gas heaters have disappeared for private housing. However, starting in 2027, new homes must be all electrical, but landlords must replace abandoned gas appliances with electricity and have ceiling insulation. This movement reduces energy bills and accelerates shifts from gas.

How did you get here?

This week’s announcement comes after lengthy discussions on changes originally proposed in 2021.

The gas industry is not satisfied, but although some early responses have been supportive, they argue that reforms will further limit customer choice and cost households.

Prime Minister Jacinta Alan proposed by 2029 that these reforms would unlock a small amount of gas in 12 petayors each year and as a way to book more expensive gas supplies for industrial use. […] By 2035, they will provide 44 PJ each year. It is sufficient to meet 85% of Victoria’s industrial needs. ”

What are the main changes?

Starting in January 2027, all newly built homes must be fully electric. This closes the loophole in existing rules where all-electric rules apply only to new homes that require planning permits.

Once gas-heated systems reach life expectancy in existing homes, they will need to be replaced with efficient electrical replacements from March 2027.

This news is even better for the rental sector.

In 2021, the state government introduced minimum rental requirements. These are now upgraded to include increased energy efficiency.

Starting in March 2027, the new Energy Efficiency Rules will apply to rentals and public housing, including:

Gas water heaters and heaters should be replaced with efficient heat pumps at the end of their lifetime at the start of a new lease. Rentals require draftproof installed at a minimum R5.0 rating if there is no insulation, and an efficient electric cooling system in the main living area.

To help households transition, all upgrades are covered by the Victorian Energy Upgrade Program. This helps reduce capital costs.

These plans are welcome. They will help reduce household energy bills and achieve broader sustainability goals.

As anyone who is tired of summer or frozen into winter knows, many state homes aren’t very good for heat performance. Most existing homes were built in the early 2000s before the introduction of minimum standards.

Older homes are more likely to pose health risks, such as mold and moisture.

It turns out that trade-offs are needed

During the consultation period, the Victorian government came up with more ambitious plans, including demanding that all households replace dead gas heaters with efficient electric options.

The government originally sought to make electric induction cooktops essential with new builds. These plans were not overcame due to attachments that some household heads feel on gas heaters and cooktops, as we found in our study.

It appears that the state government has decided not to make the perfect one an enemy of good. It is better to make significant improvements even in some trade-offs.

If the market is insufficient

Policymakers usually prefer the market to find solutions rather than demanding changes through regulations.

This is not always possible. Here, the challenges of Victoria’s gas supply, sub-housing stock, and the urgent need to act on climate change require regulatory capabilities.

Could government changes cause backlash? That is possible, especially if the changes are framed as additional costs to the landlord and his tenants. All electric household operations are cheaper, but replacing appliances costs money. Waiting until the appliance is finished and providing upgrade grants can help reduce the cost impact. High Gas users save more. Melbourne’s family quit gas can save nearly $14,000 over a decade.

18 months until release

The beginning of these changes will be implemented in just 18 months.

Such a scheme must be carefully structured. To ensure that it works as much as possible for renters, we suggest measures to avoid unintended consequences, such as testing subsidies schemes, to avoid exclusion of low-income households.

Many household heads do not have access to reliable information about renovations and do not always trust the skills and information given by merchants. This is why having accessible, independent, accurate and reliable support is important in understanding the best way to replace gas appliances with electrical equipment and how to assess your tradedie qualifications.

The government’s decision to exempt rentals with existing ceiling insulation means you miss rentals with old or compressed insulation.

Instead, if the existing insulation is not at least R2, you should look to the Australian capital area, which requires the installation of new R5.0 insulation.

The government must also ensure that tenants do not carry advance costs for upgrades at high rents. In Sweden, rent increases related to energy efficiency upgrades have been banned.

For the public to tackle these changes, the government must ensure communication is clear and early, financial support is appropriate and targeted to those in the most needy.

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