Preventing new gas network connections

From 3 March to 20 April 2023, we invited the community to have their say on the proposed regulation.

The ACT Government released an Issues Paper that proposed an initial regulation prohibiting all new fossil gas mains connections in residential and commercial areas across the ACT.

The consultation also sought feedback on a series of key issues to help inform the drafting of the regulation, including:

• identifying land or premises that are subject to the regulation
• determining the types of land and premises to be included in the initial regulation
• application of the regulation to greenfield and infill developments, including renovations and knock-down rebuilds
• exemptions to the regulation
• reporting
• commencement date
• transition period and considerations.

A consultation report and listening report outlining what was heard is available on YourSay Conversations.

The ACT Government has also sought feedback on the regulation through the Integrated Energy Plan Technical Advisory Group. This group is made up of a small number of key stakeholders who provide technical advice to government on energy transition matters. Read more about the Integrated Energy Plan Technical Advisory Group.

A Regulatory Impact Assessment (RIA) on regulatory options was undertaken by Baringa Partners LLP (Baringa).

The Baringa RIA found that the regulation will help the Territory to achieve a net positive benefit of $6.6 million.

This means that the benefits of the regulation outweigh the costs. The key benefits highlighted by the RIA include increased savings on energy bills and avoided the costs of transitioning gas infrastructure to electric. You can read the RIA here.

Despite the increase in households switching to electric in recent years, fossil fuel gas emissions were not anticipated to fall significantly as many newly built homes and developments were still connecting to fossil fuel gas.

The regulation will address this by preventing future sources of fossil fuel gas emissions from being created.

The regulation is anticipated to result in 236,728 tCO2e in avoided emissions by 2045. These avoided emissions are in addition to those saved by the new Territory Plan subdivision policy, which will prevent new gas connections in a much larger number of residential properties.

The days of cheap gas are over. While it is anticipated that the regulation itself will have minimal impact on gas prices, the broader energy transition, including the new Territory Plan subdivision policy and programs to encourage fossil fuel transition, will contribute to an increase in gas prices over the long-term.

This is because more households will transition off gas in the lead up to 2045. The cost of maintaining the network is shared across all gas customers, as customer numbers decrease the remaining customers will pay a greater share of those costs.

The ACT Government has a suite of programs available to help households with transition costs and to save on energy bills. Some of these programs include rebates for electrification upgrades for low-income, no-interest loans for sustainable upgrades, free advice and support to make business and households more energy efficient, concessions on energy bills and more.

While the ACT is a leader and early mover in our plans to electrify Canberra, we’re not alone in our ambitions.

The Victorian Government have introduced a policy to phase out new gas network connections for new dwellings, apartment buildings, and residential sub-divisions from 1 January 2024. The action will be implemented through an amendment to the Victoria Planning Provisions and forms part of the Victoria’s Gas Substitution Roadmap.

Other local government areas, including the City of Sydney, Waverley Council and Parramatta Council have already actioned or are considering banning gas network connections through planning controls.

Gas connection bans have also been introduced or are due to commence in parts of the USA and Canada. This includes the State of New York in the USA, Montreal and Victoria in Canada.

The regulation is made under the Climate Change and Greenhouse Gas Reduction Act 2010, to place a restriction on Evoenergy from providing new gas network connections in the ACT.

An objective of the Climate Change and Greenhouse Gas Reduction Act 2010 is to implement measures to meet the emissions reduction targets and increase renewable energy use in the ACT. The regulation contributes to this objective.

The regulation will complement some key changes in the ACT’s new planning system and interim Territory Plan in relation to new gas connections.

Under the interim Territory Plan that comes into effect on 27 November 2023, changes to subdivision policy means that new residential subdivisions will be prevented from connecting to gas. This policy is anticipated to reduce new gas network connections by approximately 60-70%.

The regulation will strengthen these changes by preventing connections in:

• commercial and community facility zones
• residential land where there is no subdivision
• new connections to residential buildings located in other planning zones (e.g. a caretaker building in an industrial zone).

No. The regulation is focused on preventing the creation of new gas network connections, not abolishing/decommissioning existing connections. This means that homes and businesses with an existing connection or meter can continue using fossil fuel gas.

The presence of a gas meter on your premises is a good indicator that you may already have a gas connection. If you are uncertain, contact your energy retailer or Evoenergy by emailing act@jemena.com.au.

This would be considered a new point of supply and is captured by the regulation. You may need to seek an exemption before proceeding. Find out more about exemptions.

Yes. The existence of a meter means that a connection already exists. You should contact your energy retailer to organise gas supply.

The restriction applies to all residential, commercial, and community facility land use zones. It also applies to residential buildings (class 1-4 buildings, as classified under the National Construction Code).

Buildings in these zones primarily use gas for space heating, hot water heating, and cooking. Not only are there energy efficient electric alternatives available to support these uses, but they are also typically more efficient and will help Canberrans to save money on their energy costs.

To find out what land-use zone applies to your block, find out on the Planning website.

The restriction does not apply to Industrial, parks and recreational, transport and services and non-urban zones, unless it is for a residential building (class 1-4 building, as classified under the National Construction Code) in that zone.

There are a small number of Development Applications received annually in relation to community facility zones (approx. 5-15 developments per annum).

These applications generally relate to services that could be classified as commercial or residential in nature but are carried out by community service operators, such as aged care facilities, childcare centres and school accommodation.

Including community facility zones will ensure the regulation achieves the policy intention to prevent new sources of fossil fuel gas emissions in buildings that can readily be electrified.

Including Class 1-4 buildings (as classified under the National Construction Code) will ensure that all residential buildings in non-residential zones are captured by the regulation (such as caretaker buildings in industrial zones). If these premises were allowed to connect to the gas network, it would not align with the intent to prevent fossil fuel gas emissions in buildings that can readily be electrified.

The ACT Government acknowledges that there will be cases where electrification is not always feasible, where the technology does not exist or is cost prohibitive.

Many businesses in industrial land use zones rely on gas for a range of niche commercial activities that cannot easily be electrified (e.g. manufacturing, asphalt production, glass making, or commercial laundry and sterilisation services).

As part of community consultation, we heard that it was important for connections to be continued in industrial zones for this reason.

Providing locations where gas reliant businesses can establish is important to ensure gas access is available, without the need to seek an exemption, for those businesses that require it. Allowing new gas connections in limited zones will also concentrate gas reliant businesses into certain areas and is expected to assist the gas network operator plan for the eventual phase down of the network.

Other land use zones such as parks and recreational, transport and services and non-urban zones will be considered for inclusion in the regulation as part of future reviews, currently scheduled for 2026 and 2030.

This will depend on the needs of your construction project. If your gas service must be decommissioned to make the worksite safe during construction, you will not be able to reconnect as a new gas connection will be required.

There may be some circumstances where the gas meter location can be altered and moved, and work can continue safely. You should discuss this with your building professionals and Evoenergy before proceeding.

Most businesses, like households, do not require a fossil fuel gas connection for their operations. This is because businesses primarily use gas for space heating, water heating and cooking and electric alternatives are readily available right now to meet these needs.

The ACT Government does acknowledge that there will be cases where electrification is not always feasible for businesses, where the technology does not exist or is cost prohibitive.

Businesses that require a gas for their operations (e.g. for industrial processes) will have the option of establishing operations in an industrial zone, locating to a building with an existing gas network connection, or applying for an exemption (if eligible).

Businesses who need help finding the right solutions to electrify can seek free advice through the Sustainable Business Program. The program also offers rebates on sustainable upgrades, like energy efficient electric heating and cooling, hot water heat pumps, and more, of up to $10,000.

New hospitality businesses are advised to consider whether the availability of a gas network connection is required before deciding on where to establish.

If a gas network connection is essential for hospitality operations, businesses will have the option of establishing in premises with an existing gas network connection, in an industrial zone, or applying for an exemption (if eligible).

Hospitality businesses who need help finding the right solutions to electrify can seek free advice through the Sustainable Business Program. The program also offers rebates on sustainable upgrades, like energy efficient electric heating and cooling, hot water heat pumps, and more, of up to $10,000.

A short transition period will be in place once the regulation commences until 1 March 2024.

The transitional arrangements will help reduce disruption for current projects and those that are well advanced in their design and close to submitting plans for approvals, and give developers and construction professionals time to understand the details of the regulation.

Restrictions on a new gas network connection will not apply where:

• a connection application was made to Evoenergy before 8 December 2023, as long as the connection is completed within 12 months of the application;
• a development application is lodged or a building approval is issued by 1 March 2024, and a certificate of occupancy has not been issued; or
• an approval for an exemption has been issued.

The transitional arrangements will help reduce disruption for current projects and give developers and construction professionals time to understand the details of the regulation.

Consultation with industry stakeholders noted that a significant amount of work goes into the design phase of Development Applications (DA) and Building Approvals (BA), and that commencement of the regulation should allow applicants that are substantially progressed in design and planning to lodge applications to avoid losing the associated sunk costs.

The transitional arrangements seek to balance the cost burden of electrification being passed to future owners and tenants, against the upfront cost imposition on developers.

Given the substantial amount of work and time that is required to develop and submit plans for approval, the ACT Government does not anticipate that the transition period will result in a large number of DAs being lodged or BAs issued than would have happened otherwise.

Recent data from July-October 2023 suggests that less than 3 DAs per month are indicating they would be seeking to connect to the gas network.

This is a marked decrease on previous years and shows that Canberra developers and builders are already responding to the ACT’s intention to electrify our city.

The transitional arrangements seek to balance the cost burden of electrification being passed to future owners and tenants, against the upfront cost on developers.

The three-month transition period allows time for developments that are far advanced in their design to proceed to approval and avoid sunk costs, rework and project delays – these would increase costs that may also be passed onto consumers.

All other planned developments seeking Development or Building Approval will need to be all-electric after 1 March 2024.

Multi-unit developments face significant cost, structural and technical barriers in electrification. The transition approach will help reduce the number of developments that will need to be transitioned to all-electric at a future date.

The ACT Government has been clear that a regulation to prevent new gas network connections will be introduced in late 2023.

The regulation was flagged in ACT’s Parliamentary and Governing Agreement (2021) and was confirmed in August 2022 when the ACT Government announced the commitment to phase out fossil fuel gas.

Government has also undertaken community consultation on the regulation in March and April 2023 and has continued to engage with key stakeholders on the intended end of year timeframes for commencement.

All persons seeking a gas connection, including applicants that have a valid exemption, must apply to Evoenergy for the connection within 5 years (by 7 December 2028).  No connection applications will be accepted after this date.

The gas distributor, Evoenergy, must complete all requested connections within 12 months of receiving the connection application, and no later than 30 March 2029.

Under the new Planning Act 2023, developers generally have 5 years to complete their development. Under the Building Act 2004, a Building Approval is valid for 3 years. The 5 year period to submit a connection application is in line with the new Planning Act 2023 and is aimed to encourage developers to complete connections in a timely manner and allow planning for the eventual gas network phase out.

Compliance with the regulation is a condition of Evoenergy’s Utility Licence.

The Independent Competition and Regulatory Commission is responsible for monitoring Evoenergy’s utility licence conditions and will perform compliance monitoring and reporting as part of an annual Utility Licence Annual Report (ULAR) process.

Yes. A review of the regulation will be undertaken at 3 and 6 years from commencement.

The review will form part of the Minister for Water, Energy and Emissions Reduction’s legislated annual reporting requirements on emissions reduction activities under the Climate Change and Greenhouse Gas Reduction Act 2010.

This review will be informed by data provided by the gas distributor (Evoenergy) under its reporting obligations.