A Gas-free recovery? New report shows how phasing out gas will benefit all Victorians

Switching Victorian households and businesses from gas to electric and replacing ageing gas heating systems are among a raft of simple measures that would dramatically reduce Victoria’s dependence on gas and avoid issues caused by declining supply from Bass Strait, a new analysis has found.

Environment Victoria, the state’s peak environment body which commissioned the report Victorian Gas Market – Demand Side Measures to Avoid Forecast Supply Shortfall says the findings pave the way for simple measures by the Andrews government that would also provide significant economic stimulus as we emerge from the coronavirus pandemic.

The report demonstrates that in the next ten years gas supplies in Victoria will decline considerably, but if the Andrews government makes changes now there is time to shift to clean energy sources. These changes could include banning new household gas connections and incentivising the replacement of old gas heaters with efficient reverse-cycle air-conditioners. 

“Any talk of a gas-led recovery from the pandemic is dangerously misguided. It would serve only to lock households and businesses into an expensive and polluting fuel,” Environment Victoria Campaigns Manager Dr Nicholas Aberle said.

“The cheapest and cleanest way for Victoria to avoid any future gas shortage is by getting smart with demand reduction measures.

“Victorians are the biggest gas consumers in the country – half of our gas usage is in residential heating and hot water alone.

“We need to shift our thinking: the question is how do we shift our energy needs away from gas, not how we get more of it out of the ground.

“The Andrews government’s recent decision to allow onshore conventional gas is a disappointing example of how this old thinking persists.

“Gas is not a ‘transition fuel’: it’s an increasingly expensive fossil fuel that is a significant contributor to Victoria’s greenhouse emissions. The Andrews government needs to start transitioning away from gas if it’s serious about playing our part in tackling climate change.

“The evidence is clear that it is cheaper for new homes to be all-electric. Connecting new homes to the gas network just locks those households into higher energy bills, forever.

“A simple first step the Andrews government could take tomorrow to start reducing Victoria’s dependence on gas is banning gas connections for new homes.”

The report Victorian Gas Market – Demand Side Measures to Avoid Forecast Supply Shortfall, prepared by energy efficiency consultants Northmore Gordon, found:

• Victoria does not face a gas shortfall until 2027 – the shortfall is caused primarily by declining supplies from Bass Strait fields;
• The anticipated annual shortfall of 26-85 petajoules (PJ) can be avoided through the implementation of cost-effective measures to reduce gas demand;
• Measures identified by the analysis (including replacing gas heating and hot water systems with reverse-cycle air-conditioners and heat pumps; low-cost industrial energy efficiency measures; heat pump space-heating in commercial buildings) could reduce Victoria’s annual gas consumption by 98 to 113 PJ by 2030;
• Residential gas consumption would be reduced by 73%, contributing to significantly lower winter peak demand;
• These measures will support households, business and industry to transition to a low carbon economy and access lower cost energy;
• These conclusions draw into question the need for additional Victorian gas supplies, including new onshore fields and proposed LNG import terminals, such as AGL’s Crib Point project.

“Replacing Victoria’s 600,000 20-year-old ducted gas heaters would not only slash energy bills, it would provide significant economic stimulus as we emerge from the pandemic, employ tradies across the state and give a shot in the arm to appliance retailers,” said Dr Aberle.

“Ultimately we need a plan to phase out the use of gas, to help us avoid future shortages, keep energy bills down for homes and businesses, and to cut our greenhouse gas emissions.”

View the report