ACCC alleges “Love Gas” campaign misled consumers about renewable energy
Court documents submitted by the ACCC allege the company knowingly exaggerated the possibility that cleaner fuels, such as gases derived from organic waste or green hydrogen, could soon be used for heating, cooking and hot water; whereas in reality it was “highly uncertain” whether and when it would be possible to overcome a number of technical and economic challenges to produce them on a large scale.
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At the same time as running the ads, the company was appealing to regulators so it could charge customers more money to recoup its investment sooner, amid doubts about the future of its business and “whether gas networks will be operational in 2050.”
Victoria began consulting on a strategy to accelerate households’ transition from gas in 2022 and banned new gas connections in all new homes in 2023. It comes after the Commonwealth announced $1 billion in funding to support the switch from gas to electricity in households.
According to court filings, board minutes and corporate marketing plans obtained by the ACCC show Australian Gas Networks’ advertising seeks to “influence customers to connect to the gas network, stay connected and add more natural gas appliances to their homes” and “maintain market confidence and reduce switching in Victoria”.
“The Australian Gas Grid was concerned that its revenue could be reduced as a result of reduced household demand for gas and that its significant gas transmission and distribution assets could remain idle,” the ACCC said.
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In the energy sector, stranded assets are assets that have become uneconomic due to green technological advances, changes in consumer preferences, or sudden changes in government policy. Australian Gas Networks generates revenue through pipeline user fees; This means the business model will come under increasing pressure if there are not enough homes and businesses using gas to heat their buildings.
Australian Gas Networks declined to comment on the case. In the statement submitted to the court, the claim that the advertisements included statements that renewable gas could be found within a generation is rejected, but it is stated that there were reasonable grounds to make such a claim at that time.
He argues that there are multiple viable ways to provide renewable gas to households and that it is “technically possible” to do so, while pointing to “significant government support” for renewable gas production.
“Several state governments had adopted hydrogen policies and commitments,” he says. “There was a significant amount of study, analysis and study program on renewable gases and their development.”
Australian Gas Networks says it has a target of delivering 10 per cent renewable gas by 2030 and 100 per cent renewable gas by 2040. However, apart from a small demonstration program blending 5 per cent hydrogen with gas to a few thousand homes in South Australia, the fuel delivered through pipelines in 2022-23 has been entirely natural gas.
The case was listed in the Federal Court for a case management hearing on Friday.
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