New rules are positive step to cut Victoria’s reliance on gas
Key Takeaways:
New regulations announced by the Victorian government are a welcome step to cut the state’s reliance on gas in homes.
The new rules will divert much-needed gas supplies to Victorian industry, while delivering savings on residential energy bills, particularly for renters.
There remains the scope for further ambition through policies to encourage more extensive electrification of residential energy appliances.
24 June 2025 (IEEFA Australia): The Institute for Energy Economics and Financial Analysis (IEEFA) has welcomed new measures announced by the Victorian state government to reduce households’ dependence on gas and promote electrification of their energy requirements.
Jay Gordon, Energy Finance Analyst, Australian Electricity at IEEFA, says: “In today’s announcement, the Victorian government has taken some very significant steps towards lower-cost, more comfortable, efficient electric homes. Analysis by IEEFA and many others consistently shows that shifting to efficient electric appliances is one of the most effective ways to slash energy bills.
“The days of cheap, abundant gas in Victoria are long gone. Victorians have been left at the mercy of high, volatile gas market prices, which are heavily impacted by geopolitical events. Meanwhile, efficient electric appliances like heat pump hot water systems use a fraction of the energy of their gas counterparts.”
According to IEEFA, the new measures will divert much-needed gas supplies to Victorian industry, while delivering savings on residential energy bills, particularly for households living in rented accommodation.
“These regulations are good news for industry as well as households,” says Gordon. “Victoria is grappling with the risk of gas supply shortfalls. But by transitioning homes to efficient electric appliances that are cheaper to run, that gas can be freed up for industrial users who might not yet have the option to electrify.
“These regulations mean that all new residential, and most new commercial buildings built from 2027 will be all-electric, and cheaper to run. And when an existing home’s gas hot water system breaks down, it will be replaced by a modern, efficient electric alternative.
“One third of Victorians rent their homes, but are often stuck with poor-performing appliances and high energy bills. Improving minimum standards is one of the only solutions to address this inequity. While several states and territories are looking at revising their own rental standards, Victoria’s announcement today puts it ahead of the pack.”
While the new rules are a positive step, Gordon notes that there remains scope for further ambition through more extensive electrification of appliances.
“For existing homes, these regulations will only impact hot water systems,” says Gordon. “However, households could unlock even larger savings by taking advantage of government incentives and switching their other gas appliances – especially heaters – to efficient electric alternatives. Homes that go the whole hog and replace all of their gas appliances could even disconnect from the gas network entirely, saving hundreds of dollars per year in fixed charges.
“The Victorian government recently introduced some of the strongest rebates in the country for efficient electric appliances, and these are growing in popularity – with thousands of gas heaters being replaced each month. Expanding these regulations announced today to cover all types of gas appliances – including heaters and cooktops – would be the ideal next step to cement further gas reductions and consumer savings.”
Media contact: Amy Leiper, ph 0414 643 446, [email protected]
Author contact: Jay Gordon [email protected]
About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. (ieefa.org)
