Energy Networks Australia, which represents Australia’s energy industry, has cautioned the Victorian government against its plan to rush the electrification of households, raising concerns it could cost households an additional $22 billion over two decades.
New modelling commissioned by Energy Networks Australia will be passed on to the Allan government, warning of the dangers a rapid switch to electrified households from gas would pose, according to the Herald Sun.
The peak body has warned reduced emissions from less gas would be offset by the increase in production from coal and gas fire plants required to meet peak demand until 2034.
The Allan government last year revealed Victorians would have to replace their gas hot water and heating appliances with electric units once they have reached their end of life under the state’s electrification push.
However, ENA chief executive Dom van den Berg told the Herald Sun the state government’s “chosen path risked placing undue financial strain on Victorian families”, potentially costing households an extra $22 billion over the next 20 years.
“A rushed transition to electrification, without sufficient renewable energy and storage capacity, will lead to higher electricity prices for everyone,” Ms van den Berg told the outlet.
“The pressure comes from increasing the overall demand for electricity in the early mornings, evenings and winter peaks – times when people are normally using gas heaters to warm their home and solar and wind are at their lowest output.
“Nearly a quarter of the increased overall system cost is because of increases to the wholesale cost of electricity – and every Victorian pays this, regardless of whether they switch off gas or not.”
The new modelling predicts total emissions reductions over 20 years will sit at 18 million tonnes, and will cost the consumer $22 billion.
Ms van den Berg said ENA “at best” predict about a 2 per cent reduction over 20 years.
“But $22bn is a lot to pay for that,” he said.
The Department of Transport and Planning (DTP) and the Department of Energy, Environment and Climate Action (DEECA) developed a Regulatory Impact Statement (RIS) late last year, exploring options to electrify all new residential and many new commercial buildings.
This initiative came after the state government decided to ban gas connections to new buildings, apartments and residential subdivisions requiring a planning permit from January 1, 2024.
Public consultation on the RIS is open until February 28.
