Australian state of Victoria to ban natural gas connections in new homes to reduce energy costs

• Victoria will ban natural gas connections in new homes starting in 2024.
• The move is part of the state’s plan to slash energy costs.
• The gas industry contributes 17% of the state’s emissions.

As part of a strategy to reduce emissions and slash energy costs, the Australian state of Victoria will forbid natural gas connections to new homes starting in 2019. This was announced on Friday by the state’s minister for climate action.

With over 80% of homes linked, Australia’s second-most populated state is the nation’s largest consumer of natural gas. However, it also has ambitious goals to achieve net zero emissions by 2045, five years before the federal government.

Lily D’Ambrosio, the minister for climate action, announced on Friday that starting in January 2024, new homes requiring planning permissions must connect to all-electric networks.

17% of the state’s emissions are contributed by the gas industry.

“Reducing our reliance on gas is critical to meeting our ambitious emission reduction target of net zero by 2045 and getting more Victorians on more efficient electric appliances which will save them money on their bills,” D’Ambrosio said in a statement.

All new public structures, including houses, schools, and hospitals, that have not yet entered the design phase, will be subject to modifications.

The proposal comes as output from Exxon Mobil Corp.’s (XOM.N) offshore reserves, which have traditionally provided gas to southeast Australia, is expected to decline starting in the middle of the decade.

According to a statement from the Australian Petroleum Production and Exploration Association, the prohibition won’t have much of an impact on the environment because it will force families onto the coal-based electrical system.

About half of the carbon emissions in Victoria are produced by the state’s power industry, which is mostly dependent on coal.

“The Victorian Government is taking choice away from consumers for limited climate benefit while ignoring the fact that the best way to bring gas prices down is to invest in more gas supply,” said Chief Executive Samantha McCulloch.

Rewiring Australia, a non-profit which advocates for electrification, backed the move and said “electrification is the fastest and most cost-effective way to shave thousands of dollars a year from energy bills and lower our emissions.”

Australia finalized a set of regulations for the domestic gas market this month, which included a wholesale price ceiling that had been initially instituted in December.

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