A new report commissioned by Energy Networks Australia (ENA)—the national industry body representing Australia’s electricity and gas networks—says there are hidden costs of the Victorian Government’s push for mandatory electrification.
According to the report, forced electrification could cost Victorian households an extra $22 billion over the next 20 years.
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ENA CEO Dom van den Berg said, “If taken now, the government’s chosen path risks placing undue financial strain on Victorian families.
“A rushed transition to electrification, without sufficient renewable energy and storage capacity, will lead to higher electricity prices for everyone.
“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.”
“Our report shows that the wholesale cost of electricity will go up for all Victorians—homes and businesses—if we are forced to switch from gas too soon, even for those who already have solar and have made the switch from gas.”
The report also highlights that emissions don’t reduce in the first five years after forcing electrification, and that any emissions savings after that are marginal at best.
“We are advocating for a more balanced approach, one that encourages voluntary electrification while prioritising investments in renewable generation and storage. This would ensure a smoother transition, minimising cost increases for consumers and maximising the potential for emissions reduction.
“We need a smart, sustainable energy future for Victoria, and forced electrification is not the answer. By embracing a progressive approach, we can protect consumers’ wallets, safeguard energy system stability, and keep our emissions targets within sight.”
But Energy Consumers Australia CEO Dr Brendan French said the latest Stepping Up report showed the average household that goes all-electric by 2030 stands to save more than $2,000 off their energy bills in comparison with a household with a fossil-fuelled home and car.
“In our last survey (the Consumer Energy Report Card), one in three Victorian homeowners said they will probably cancel their gas supply within the next 10 years. In the ACT, which has longer established clear policies for getting households and small businesses off gas, that rose to two in three homeowners in the next 10 years,” French said.
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“This shows that when governments provide certainty to consumers that the plan is to get off gas, and provide clear communications about what needs to happen, consumers plan for the future accordingly.
“We agree with the Victorian Government’s proposed approach to the future of the gas network for households and small businesses, which is a sensible approach that focuses on the cost-benefits for consumers.”
