Gas industry wants to keep Victorians hooked on gas - new ‘rubbish modelling’ ignores realities of dwindling supplies and warming climate

Environment Victoria has today criticised new modelling from Energy Networks Australia (ENA) claiming electrifying Victorian households will cost $22 billion as rubbish modelling designed to protect their own profits at the expense of everyday Victorians and the climate.

“This is rubbish modelling by a gas industry lobby group interested purely in protecting their own profits. It can be safely disregarded as complete nonsense,” said Environment Victoria CEO Jono La Nauze.

“The modelling assumes that we can sit back and do nothing – we can’t. Victoria is running out of gas and all of the new supply alternatives are expensive and environmentally unacceptable.”

“Victorians are well aware that gas companies have been ripping us off for years now and we can’t trust them when they suddenly turn around and say we can’t get by without them.”

“Victorian Energy Upgrades incentives for efficient electric heating save people thousands off the upgrade costs but ENA have ignored this in their modelling.”

“The fact is that the cost of gas has tripled in the last decade and that trend is going to continue as our once plentiful supplies in Bass Strait run out over the next few years. And that is despite the fact that demand for gas fell by a third over the same period.”

“Meanwhile, coal is being replaced with wind, solar and storage which are the cheapest options for building new supply. Already in 2024, 42% of Victoria’s electricity was made from renewable sources, and this is increasing quickly. It’s simply supply and demand – there is a shrinking supply of cheap local gas, whilst we have literally endless supplies of renewable energy to tap into.”

“Energy Networks Australia is the lobby group for the privatised gas networks which have a vested interest in keeping Victorians on gas. They simply want to maintain the status quo and keep their license to print money.”

“The networks make guaranteed profits plus nearly the same again in super profits – and we all pay for that in our gas bills.”

Background for journalists 

Credible organisations that have shown the savings consumers can make by switching away from gas in Victoria include Monash University, Grattan Institute, Energy Consumers Australia, Rewiring Australia, the Institute for Energy Economics and Financial Analysis, CSIRO and Renew.

The real price of gas in Victoria is rising –  

• Average gas prices in Victoria increased from $3.63/GJ in FY2014-15 to $11.34/GJ in 2023-24 

• This is despite that over the same period, Victorian gas demand dropped 34% (ie since 2015) 

• ENA’s modelling assumes that gas will stay at $12/GJ which is farcical 

While the price of electricity is going down – 

• ENA assume that Victoria doesn’t build enough renewable generation to phase out old and expensive coal power stations in time 

• ENA further assume that almost a third (30%) of households replace their gas heaters with the oldest, least efficient technology on the market (resistive heaters) 

• ENA fail to account for the large subsidies that are available to households installing efficient electric heating via the Victorian Energy Upgrades program 

The facts on electrifying Victoria –

• Recent analysis by Springmount Advisory shows that electrifying and insulating homes can save the average household $1500. (link) 

• Our analysis with Renew shows that when it comes to heating and cooling, there is an electrification option to suit every budget that will mean more comfortable homes, lower bills, and less pollution.  

• We found that the 44% of Victorian households using only ducted gas heating can replace it at end of life with reverse cycle split systems and cut their heating and cooling bills by two thirds – even while gaining the ability to cool. 

• Victoria’s electricity grid is rapidly becoming clean. Our electricity emissions have plummeted 46% in only 10 years, and will be down to zero by 2035.