‘Drastically increase network costs': Top energy expert says Victorian gas bans to hurt small businesses and shrink manufacturing capabilities
Top energy experts have condemned the Victorian Allan government's sweeping gas bans arguing that as households are weaned off the system manufacturers and small businesses will consequently bear the brunt of the rising costs to extract gas.
The Allan government announced on Tuesday it would move to scrap its policy to force owner-occupiers to switch from gas heating to electric systems when they expire after receiving intense backlash from consumers and industry magnates.
The Victorian government unveiled a number of measures in 2023 which sought to phase out the use of gas in the state, yet has since softened multiple pieces of the policy.
The draft plans would have forced hundreds of thousands of Victorians still reliant on gas heaters and cooktops to shift to electric models as part of the government's net zero emissions pathway.
However, the government is continuing to persist with numerous elements of the policy raising the ire of energy analysts.
These include requiring all gas hot water systems to be replaced with electrical alternatives once they break down and all new homes and commercial buildings having to be built completely electric from 1 March 2027.
While Premier Allan claimed the move would push down household electricity bills, Senior Energy Analyst at MST Financial Saul Kavonic said that despite minor amendments being made, the policy would significantly reduce the states manufacturing base which is already at record lows.
'What is telling in this backtrack in Victoria and a big part of it is what's starting to dawn on the Victorian government is if they actually were successful in going down their path of reducing gas usage for heating, what it actually does is it starts to drastically increase the network costs on the manufacturing base,' Mr Kavonic said.
Mr Kavonic who has worked in the sector for over 15 years said that the remaining manufacturers in the state would 'then have to cover a much larger portion of that fixed infrastructure amortisation,' as the cost of gas became more expensive as demand decreased.
'You'll see an even further hastening of the deterioration of the manufacturing and small business sector in Victoria,' Mr Kavonic reiterated.
Energy analysts outlined that if hundreds of thousands of homes were swapped over to electricity-based services, then the grid would be overloaded in the short term, potentially putting the viability of the entire system at risk.
The government back down delayed all changes to energy rules which were set to commence next year to March 1, 2027.
Victoria faces crippling gas shortages by 2029 according to the Australian Energy Market Operator as existing supplies in the Bass Strait have dried up.
Mr Kavonic said the government's alternating position risked threatening investment in critical gas exploration projects further.
'A lot of industry folks over the last 12 hours have been questioning if the energy minister in Victoria Lily D'Ambrosio has effectively been overruled by her own party in this, because she's been one of the biggest advocates of demonising gas use and getting our customers off gas,' he said.
'What's really important is if Victoria actually wants to fix their gas supply security issue they need to have a very clear statement backed up by actions that they see a role for gas in the future.'
Mr Kavonic said the appetite for investment into gas security was "still not going to return" given the Allan government was "ultimately sitting on the fence here and only partly walking it back".
The government says that by 2029 there will be a reduction of 12 petajoules of gas in every household and business which they argue will help fuel industrial capacities.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Herald Sun
4 hours ago
- Herald Sun
Former CFMEU boss Marcus Pare expelled from union
Don't miss out on the headlines from Victoria. Followed categories will be added to My News. A former CFMEU boss who splurged $100,000 on a union credit card in 12 months and allegedly maintained contact with bikies, has been expelled from the construction union. Marcus Pare, who ran the South Australian branch of the CFMEU while it was under the control of Victorian secretary John Setka, was turfed by administrator Mark Irving, KC, on Tuesday. The decision bans Mr Pare from the union for four-and-a-half years, meaning he will be unable to contest the next union elections, due when the CFMEU returns to members' control. An investigation into Mr Pare by the CFMEU administration found that he went on a spending spree across the country with union funds, including a $2714 dinner with unnamed officials where they sipped on 27 espresso martinis. He also used the credit card to book a personal holiday to New Zealand, which he later paid back. A report from investigators shows he advocated for a former Finks member to be a union delegate and helped get that man's mother a job, and that he transferred contacts of prominent Rebels and Mongols from a union phone to his personal device. It also says he had given himself an unauthorised pay rise of $29,000, which Mr Pare claimed Mr Setka had endorsed. 'His failure to acknowledge, or apologise for, his conduct sheds light on the type of leader he was, as well as his disregard of his responsibilities and legal obligations,' the report says. The Adelaide Advertiser attempted to contact Mr Pare on Wednesday. When the investigation was released early this year, Mr Pare told News Corp it was 'political rubbish'. 'I take none of these attacks on me personal even though some days it does affect my mental health,' he said at the time. The expulsion is a significant step for Mr Irving, who is attempting to clean up the union following his appointment as administrator, because of the likelihood Mr Pare will be unable to contest the next union elections. It also gives clear air to the defacto boss of the South Australian branch, Travis Hera-Singh, who has indicated he wants to keep the branch local and cast off ties to Victoria. Mr Irving's appointment was sparked by revelations the CFMEU had been infiltrated by bikies and underworld figures and had 'lost control'. Read related topics: CFMEU
Sydney Morning Herald
5 hours ago
- Sydney Morning Herald
Is an extra 40cm the secret to happiness in the bedroom? This economics expert doesn't think so
It's not often that the book you're reading illuminates perfectly the strange reality of housing being played out in the nation's suburbs. But there I was, working my way through Abundance, the latest must - read in economics by American journalists Ezra Klein and Derek Thompson, which has become a clarion call aimed at the world's progressives, when just that happened. Abundance effectively argues that all the rules they helped create to protect the environment, prevent pollution, ensure people had quality housing and generally improve our standard of living have turned into a quagmire of red tape that is leaving people worse off. Everything from the efforts to decarbonise the world to ensuring people have affordable homes is being stymied by the left's bureaucratic success, or so say Klein and Thompson. And so pervasive is this book that about half of the federal cabinet has a dog-eared copy on their bed stands. With the key themes of the book still swirling in my head as I began to catch up on the news of the day, I was struck by a story by my colleague, Daniella White, about the bunfight over a multi-storey housing development in the northern Melbourne suburb of Greensborough. The story opened with the words: 'Apartments falling short of minimum space requirements' have been approved by the Victorian state government to help meet its housing targets. Loading Naturally, I found myself wondering what these minimum space requirements are. About 30 minutes later, after going down the rabbit hole that is state planning regulation, I discovered something quite discomforting. Under current regulations, the main bedroom in any new build has to measure at least 3 metres by 3.4 metres, while other bedrooms must be at least 3 metres by 3 metres.
The Age
5 hours ago
- The Age
Is an extra 40cm the secret to happiness in the bedroom? This economics expert doesn't think so
It's not often that the book you're reading illuminates perfectly the strange reality of housing that's currently being played out in the nation's suburbs. But there I was, working my way through Abundance, the latest must - read in economics by American journalists Ezra Klein and Derek Thompson, which has become a clarion call aimed at the world's progressives, when just that happened. Abundance effectively argues that all the rules they helped create to protect the environment, prevent pollution, ensure people had quality housing and generally improve our standard of living have turned into a quagmire of red tape that 's leaving people worse off. Everything from the efforts to decarbonise the world to ensuring people have affordable homes is being stymied by the left's bureaucratic success, or so say Klein and Thompson. And so pervasive is this book that about half of the federal cabinet has a dog-eared copy on their bed stands. With the key themes of the book still swirling in my head as I began to catch up on the news of the day, I was struck by a story by my colleague Daniella White about the bunfight over a multi-storey housing development in the northern Melbourne suburb of Greensborough. The story opened with the words: 'Apartments falling short of minimum space requirements' have been approved by the Victorian state government in order to help meet its housing targets. Loading Naturally, I found myself wondering what these minimum space requirements are. About 30 minutes later, after going down the rabbit hole that is state planning regulation, I discovered something quite discomforting. Under current regulations, the main bedroom in any new build has to measure at least 3 metres by 3.4 metres, while other bedrooms must be at least 3 metres by 3 metres. That means the house that I've had for more than 20 years and raised a family in (including a dog and a rabbit) here in Canberra is not 'liveable' by today's Victorian standards – all because it does not have the requisite sized bedrooms.
