Media Releases | 11th Mar, 2021

Heater rebate program casts doubt over need for gas import terminal

A Victorian government program to replace old gas heaters with electric ones could reduce winter gas demand to such an extent that AGL’s proposed gas import terminal at Crib Point isn’t needed.

The new analysis, conducted by Environment Victoria, shows a $335m heater replacement program announced in the 2020 Victorian state budget would support 250,000 households to switch old heaters (mostly gas) to efficient electric heaters.

This program alone would decrease Victorian winter gas consumption by 33-34 terajoules per day, more than enough to avoid the most commonly forecast shortfall of 27 terajoules per day in winter by 2024.

When combined with other Victorian energy efficiency programs, the reduction in gas demand calls into question the long-term business case for AGL’s proposed gas import terminal at Crib Point in Westernport Bay.

“AGL’s case for the Crib Point gas import terminal was written before the pandemic, before the state budget, and before the biggest government investment in clean energy and energy efficiency in Victorian history,” said Environment Victoria Campaigns Manager Nicholas Aberle.

“Now we’ve calculated the impact of those government programs and there are serious questions about whether AGL’s Crib Point project is needed at all.”

“AGL has previously underestimated the pace of energy transition and the effect it would have on wholesale electricity prices, resulting in massive writedowns. Financial analysts need to take a serious look at the Crib Point gas terminal proposal and how it stacks up now these new policies have been announced and the gas market is changing so rapidly.”

The controversial Crib Point gas terminal proposal was subject to an Environment Effects Statement inquiry which reported to Victorian Planning Minister Richard Wynne on 22 February. Minister Wynne is expected to make a decision on the project in March.

“Whatever happens with Minister Wynne’s decision, the Westernport Bay community will not back down. This gas terminal is strongly opposed by local businesses, the tourism industry, all three local councils, federal MP Greg Hunt and even the Victorian Liberal Nationals opposition.”

“We expect to see the Victorian Planning Minister listening to these concerns. Since the Andrews government’s own programs are already on track to address the winter gas shortfall by reducing gas consumption, there’s no justification for the Crib Point terminal going ahead.”

“Gas is a fossil fuel and a significant contributor to climate change. It’s now cheaper and better for the environment for households to switch to efficient electric heating in Victoria, and the transition away from gas will accelerate rapidly in coming years.”

“All of this risks making AGL’s gas terminal a stranded asset before it is even built, at time when the company is already facing serious financial challenges,” said Environment Victoria Campaigns Manager Nicholas Aberle.

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Media contacts

Greg Foyster, Environment Victoria Media and Content Manager, 0410879031