17 September 2026
Victorian Energy Upgrades Hydronic Heating and Water Heating papers and release of Measurement and Verification Specifications V9.0.
The Department of Energy, Environment and Climate Action (the department) has released two papers for the Victorian Energy Upgrades (VEU) program – a response to consultation on the proposed hydronic heating activity and a consultation paper on domestic water heating activities. Customers are central to the VEU program. Hydronic and water heating upgrades must be designed to deliver real benefits to Victorian households, including lower energy bills, reduced emissions, greater comfort and a positive upgrade experience.
The Measurement and Verification (M&V) Specifications Version 9.0 has also been published and now include methods for industrial heat decarbonisation.
Hydronic heating response to consultation
The department thanks everyone who took the time to make a submission or participate in consultation activities. The response to consultation, now available on Engage Victoria, details the key decisions proposed in response to stakeholder feedback.
Feedback demonstrated strong support for introducing a hydronic heating activity into the VEU program, with most stakeholders recognising that discounts could help overcome the significant upfront costs associated with heat pump hydronic systems and support the electrification of homes. Stakeholders also provided detailed technical feedback on product performance requirements, installation practices, system design, installer competency requirements and the proposed emissions reduction calculations.
Having considered stakeholder feedback, the department proposes to proceed with the development of a new hydronic space heating activity, subject to finalisation of the Regulations and Specifications.
The department proposes to continue working with the Essential Services Commission (ESC) and industry stakeholders to finalise the activity design, VEU Regulations and Specifications, and public customer information. Implementation of the activity is currently proposed for the second quarter of 2027.
Domestic water heating consultation paper released and survey open
The department is reviewing domestic water heating activities (Parts 1 and 3) under the VEU program. The review will ensure these activities remain fit-for-purpose, continue to deliver benefits to participating households and businesses, and expand upgrade opportunities for businesses.
To support this review, the department has published a consultation paper and survey to seek stakeholder feedback on how the VEU program can better support the transition to efficient domestic water heating for Victorian homes and businesses.
The survey and supporting survey paper can be found on the Engage Victoria Victorian Energy Upgrades - Water heating activities page.
The department will use feedback obtained from survey responses to inform proposed changes to domestic water heating activities, with the aim to provide a response to consultation in late 2026.
The consultation closes at 11:59 pm on Sunday 18 October 2026.
Stakeholders are advised not to make any decisions related to proposals for either activity until final VEU Regulations and Specifications have been approved and published.
VEU Measurement and Verification Specifications Version 9.0 published – Industrial heat de-carbonisation
The department has published the Victorian Energy Upgrades (VEU) Measurement and Verification Specifications V9.0.
The updated Specifications introduce four new methods into the project-based activities framework that can support large industrial gas users to electrify or reduce their greenhouse gas emissions:
- electric thermal energy storage (eTES)
- heat demand reduction
- gas boiler efficiency improvement
- behind-the-meter biogas.
These changes take effect from 1 October 2026.