Policies shaping the electrification movement

28 Nov 2023

This year has been a watershed for electrification policies at all levels of government, and it’s been a long time coming. Around one quarter of Australia’s greenhouse gas emissions come from all the buildings we see around us. Without rapid efforts and policies in place to decarbonise, it will be much harder for Australia to achieve its legislated emissions reduction targets - but we are beginning to witness changes that point us towards a better future.

With each new policy announcement bringing Australia closer to an all-electric future, we wanted to dive into some of the detail about the ways policies have shifted in 2023 to support building electrification.

The national lens

Starting with a wide lens, the federal government implemented several policies that aim to accelerate households and small business towards an all-electric future.

When it came to Australian homes, a Senate inquiry into residential electrification was conducted, exploring opportunities for large scale residential electrification. GBCA joined dozens of other organisations in calling for increased support and a policy environment to support rapid electrification of existing homes and the urgent need to ensure that we make new homes all-electric.$1.3 billion was pledged in the 2023-24 federal budget to establish the Household Energy Upgrades Fund which will provide financing options for household energy upgrades such as battery-ready solar PV and electric appliances.

For small businesses, $310 million was pledged in the same budget to establish the Small Business Energy Incentive, which is providing businesses with an additional 20% tax deduction on spending that supports their move towards electrification.

The government itself will also be championing all-electric buildings with the release of the Net Zero in Government Operations Strategy this week. This strategy supports the government’s commitment to a net zero Australian Public Service by 2030 and requires 4 Star Green Star certification for any new Commonwealth Government office space purchased or constructed with a value greater than $15 million. This will include complying with the Climate Positive Pathway, ensuring these buildings will be fossil fuel-free.  

The state lens

In the nation’s capital, the territory government has committed to transition off fossil gas and make Canberra a net zero emissions city by 2045. A significant step towards this goal is a policy which came into effect this month to ban new homes in the ACT from connecting to the gas network. To support the electrification journey, the ACT Government is offering a range of supporting programs for homes and businesses, such as a commercial kitchen trial that will support businesses with a rebate of up to 50% of the total cost to transition their commercial kitchens from fossil fuel gas to its efficient electric counterpart.

The state of Victoria has also announced a ban on gas connections to new homes which will come into effect on the 1st of January 2024, while a New Residential Electrification Grants program will be available to volume home builders, and developers. This will provide bulk rebates for battery ready solar panels, solar hot water and heat pumps to new home buyers in Victoria, up front.

In addition to all-electric new homes, the Victorian government has committed to ensuring that new public buildings, such as schools, government-owned buildings, and hospitals must be all-electric.

And finally, the New South Wales government has also implemented a new policy in line with an all-electric future. The NSW State Environmental Planning Policy (Sustainable Buildings) 2022, came into effect this October which requires all large commercial and some significant state developments to demonstrate a building will be able to operate without fossil fuels by 2035.

The local lens

Following the lead of Waverley Council in Sydney, the City of Sydney and several other councils in NSW are undertaking processes to introduce new planning rules which will require all-electric appliances for homes and buildings instead of gas.

And while the City of Melbourne hasn't explicitly banned gas connections, it is currently going through the process of introducing Planning Scheme Amendment C376 which will require new buildings (and major renovations) over 5000m2 to achieve 5 Star Green Star certification. This will effectively mean no gas connections for large buildings in that local government area.  

With local councils all over Australia exploring how they can encourage or require buildings to leave gas in the past, we can expect more policy news of local governments pushing for an all-electric future.

Looking ahead

What do we anticipate looking towards 2024? The finalisation of a new National Energy Performance Strategy, an update to Australia’s Trajectory for Low Energy Buildings, implementation of the Australian Public Service Net Zero by 2030 commitment, Australia’s Future Gas Strategy and a decarbonisation sectoral plan for the built environment as part of Australia’s 2050 Net Zero Plan will lead to an increased focus on electrification by the federal government.

Katy Dean, Senior Policy Advisor at the GBCA says accelerating electrification across the board is critical.

“At all levels of government, we will be calling for increased support for households, businesses and industry to electrify homes and buildings, through awareness-raising, industry training, grants, incentives and other financial mechanisms. We expect that jurisdictions around Australia will be working hard to develop and implement policies to help them meet their respective emissions reduction commitments and considering how electrification of homes and buildings can deliver significant carbon savings from the buildings sector.”