New research commissioned by Energy Networks Australia (ENA) suggests that the Victorian Government’s push for mandatory electrification could cost households billions in electricity bills over coming decades.
The Victoria’s Power Shift – The hidden cost of forced electrification in Victoria report, commissioned by ENA, warns of significant increases in household power bills and added pressure on the state’s electricity generation system if enacted too early.
It found that that forced electrification could cost Victorian households an extra $22 billion over the next 20 years.
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,” Ms van den Berg said.
“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 won’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,” Ms van den Berg said.
“This would include encouraging and incentivising the development of local generation and storage connected to the distribution grid, and more EV charging as highlighted in ENA’s 2024 report The Time is now: Getting smarter with the grid.
“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.”
Energy Networks Australia has provided this information to the Victorian Government in a submission to the Building Electrification – Regulatory Impact Statement process.
Read Energy Networks Australia report, Victoria’s Power Shift – The hidden cost of forced electrification in Victoria.
Read L.E.K. Consulting report, Impacts of Forced Electrification on the Victorian Energy System, Costs and Emissions.
