Vic must accelerate gas-to-electric upgrades - 21 Oct 2022

Crippling bill pain will thump households and businesses relying on old gas water and space heating as the gas shortfall predicted by the Australian Energy Market Operator hits Victoria next winter, unless the Victorian Government dramatically accelerates financial incentives for energy customers to switch from gas to electric appliances before mid-2023.

“We welcome the Andrews government’s announcement yesterday on proposed new emissions reduction targets of 75-80% by 2035 and net zero by 2045. With the Victorian electricity grid well on track to reach 65% renewables by 2030, the big challenge is getting off gas as soon as possible,” said president of the Energy Savings Industry Association (ESIA), Rod Woolley.

Over two million Victorian households and businesses currently use gas.

‘We need the Victorian government to commit to turning some dials on the Victorian Energy Upgrades (VEU) program. We welcome the policy change announced earlier in 2022 that incentives will no longer be available from March 2023 for households replacing old inefficient gas appliances with more efficient new gas ones.

“But we need the government to swing its focus rapidly to incentivising households and businesses to upgrade as soon as possible their old gas appliances and equipment with electric ones. This fuel-switching is essential to ensure customers don’t purchase gas appliances that they will likely have for the next ten to twenty years that will lock in higher costs and emissions. The government also needs to consider that gas network providers offering rebates at the point of household gas appliance purchase of up to $500 is a perverse signal undermining the need for customers to fuel-switch.”

The ESIA is advocating a four-point plan to urgently bolster the VEU so it can do the heavy lifting the Victorian Gas Substitution Roadmap has bestowed upon it to reduce emissions:

  • update some program settings to recognise and reward the long-term emissions reduction opportunities of switching from gas to electric appliances like when energy customers replace equipment like gas water heaters and air conditioners with electric.
  • better align the VEU and separate Solar Homes Heating and Cooling program for low-income households to improve customer and industry experience and support more energy upgrades sooner at lower cost.
  • introduce new activities to the program including insulation and home energy rating assessments to significantly reduce bills and home comfort during extreme weather, and help energy users better understand priority options including fuel switching.
  • support major industrial and commercial energy upgrade projects to be committed during 2023. This will significantly reduce gas loads and provide clarity on forward gas demand, by enabling Large Energy Users to access VEU financial incentives now and pay their liability later.

… Ends

Media contact: Jessica Lynch, M 0417 539 377,

Background Information

The ESIA is also advocating for five broader initiatives to reduce energy bill pain and support demand side investment:

  • peak demand reduction target including batteries to reduce demand during the summer peak (as being introduced by NSW);
  • renewable fuel production target (as being introduced by NSW);
  • grants for ‘energy efficiency first’, especially when considering solar PV and battery programs, as more energy efficient appliances and equipment mean less solar and battery infrastructure is needed;
  • reactivate the Small Business Energy Saver program which fully leveraged the VEU in recent years and meant more efficient equipment upgrades for less dollars; and
  • tighten overarching alignment, transparency and reporting on energy efficiency policies, programs and grants across the Victorian government to deliver more for less.

(PDF - including References)



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