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Victoria’s Roadmap from Gas to Electricity

The southern state of Victoria in Australia is making headlines as it moves from brown coal to wind and from fossil fuel gas to battery-firmed solar. As such, it is making a great effort to take the general public along for the journey along Victoria’s Roadmap, with education playing a key role in the sat nav. “Public education, targeting households in winter, will explain the practicalities and benefits of reducing or switching away from gas. Using reverse cycle air conditioning to heat homes, for example, can free up significant gas demand — including at peak time — and can save households on bills.”

Education will also be necessary to change generations of ingrained belief. For example, for years gas has been seen as a least-polluting way to cook and heat the home. This was because Victoria’s electricity grid was mainly powered by brown coal. This is less and less the case as more solar and wind enter the grid. Gas also used to be cheaper than electricity. That is no longer the case, and despite the evidence of their increasing gas bills, people are reluctant to change.

Gas was “sold” as a transition energy source. But most people (namely, gas company executives) did not realise how short that transition would be from fossil fuel gas to renewables. Or how painful it would be as gas companies hike up prices in the wake of the Russian invasion to make obscene war profits.

Victoria’s Roadmap reports: “It is particularly critical for Victoria to proactively prepare for and manage the shift to renewables because we have the highest use of gas for heating, cooking and hot water in Australia. This transition will involve guiding an orderly decarbonisation of the gas system over the long term. The Roadmap represents the start of this journey.”

The journey will be supported by the Victoria Energy Upgrades (VEU) program.

“The VEU program will help replace gas water heating and space heating with efficient, low-emissions electric equipment while phasing out incentives for all residential gas products by late 2023.

“These incentives and reforms build on existing programs:

    • The 10-year, $1.3 billion Solar Homes Program, which is providing 778,500 rebates to support Victorian households to install solar PV panels, solar hot water and electric heat pumps, or battery systems at home.
    • The Solar for Business Program, which is supporting 15,000 Victorian businesses to install solar PV systems at their work premises.
    • The Big Housing Build program, with thousands of new energy efficient public housing units being built and upgrades of 35,000 social housing units underway, with all-electric specification wherever possible.

“Recognising this, the Victorian Government has supported universities, energy companies and other innovative organisations to advance hydrogen technology and to prepare to produce, and use, hydrogen at scale. In March 2022, the Government provided $10 million for a renewable hydrogen highway transport backbone along Victoria’s busiest freight corridor, in addition to grants provided through the Renewable Hydrogen Commercialisation Pathways Fund and Renewable Hydrogen Business Ready Fund. Funding has been provided to most major Victorian universities, for hydrogen skills and products, through the Victorian Higher Education State Investment Fund.

“The $1.3 billion Solar Homes Program is providing 778,500 rebates to support Victorian households to install solar PV panels, solar hot water and electric heat pumps, or battery systems at home. To date around 57 per cent of program applicants have had a combined household income of less than $100,000 per year. More than 200,000 solar panel, battery and solar hot water systems have been installed through the Solar Homes Program since its launch in 2018.

“The Victoria Planning Provisions, which give gas distribution businesses a formal approval power for new residential subdivisions, will be changed in 2022, to remove the effective mandate to connect to gas, giving consumers more choice about how they source their energy needs. This will mean more all-electric homes will be available to consumers that want them.

“Minimum energy efficiency standards for rental homes are being introduced to cut bills and improve comfort for renters. A new heating minimum standard took effect in March 2021, with standards for ceiling insulation and draught proofing proposed for future consideration.”

People are finding it difficult to change.

“Not all energy users will want or be able to switch to electric appliances. Consumer survey results suggest that — combined with complex or inadequate information — inertia, and preferences for selected features of gas appliances, may prevent investment in electric appliances, even though they can be more efficient and have lower running costs. At present, many are confused about the potential savings and options, and are missing the opportunities presented through electrification.

“Historically, gas provided a lower-emissions energy source than electricity, primarily due to Victoria’s heavy reliance on brown coal generation. This is changing rapidly as wind and solar play an increasing role in Victoria’s electricity mix, and as old brown coal power stations retire. The high efficiency of many electric appliances, such as reverse cycle air conditioners and heat pump water heaters, complement this cleaner grid, and mean that adopting efficient electric appliances now reduces emissions.

“Electrification of gas load will require significant investment in electricity infrastructure, but Victorians have time to prepare and plan for this. Electrification, alongside increasing adoption of electric vehicles and ongoing population growth, will start to noticeably impact peak electricity demand as we approach 2030.

Business

“The Solar for Business Program, launched in May 2021, will support up to 15,000 Victorian businesses to install solar PV systems at their work premises, empowering businesses to generate their own electricity and minimise their bills.

“Some of these businesses will be able to switch from gas to electricity to reduce their emissions
and manage their energy costs. The commercial sector primarily uses gas for space heating, water heating and cooking, and so will often be able to switch these activities to efficient and widely- available electric technologies similar to those used in households. The use of gas in the industrial sector is more diverse, ranging from low temperature water heating requirements and low and medium temperature steam raising across sectors such as food and beverages and pulp and paper, to very high temperature needs in sectors such as metals, glass and ceramics.”

For those who can’t switch — renewable (green) hydrogen and biomethane may be able to fill the energy gap. Renewable hydrogen is produced when the energy generated from renewable sources such as the sun, wind, tides, or waves powers an electrolyser to convert water into hydrogen gas.

“$10 million will be provided for the Hume Hydrogen Highway program, a renewable hydrogen highway transport backbone, including at least four refuelling stations and around 25 new hydrogen-powered long-haul heavy freight vehicles, along Victoria’s busiest freight corridor — the Hume Highway between Melbourne and Sydney.

“Gas users emphasised that switching fuels would be financially and technically challenging, particularly hydrogen due to its different characteristics to fossil gas. However, gas networks and appliance manufacturers expressed confidence that these challenges could be overcome. Organisations from across the supply chain had deep interest in the development of alternative gases and many are already investing.”

It will be interesting to see how these initiatives play out as Victoria — Australia’s highest gas user — moves from fossil fuels to renewable energy.

 
 
 
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Written By

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].

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