Mixed Response as Victoria Moves on Renewable Energy Targets

The Victorian government has become the first Australian state to introduce legislation in a bid to have its renewable energy targets enshrined in law, but the move has received a mixed response.

The state government said it was “harnessing the power of renewable energy to drive down prices, attract billions of dollars of investment and create thousands of local jobs.”

Premier Daniel Andrews said the Victorian Renewable Energy Targets (VRET) legislation was the largest renewable energy auction in Australia.

The legislation, introduced into parliament last week, set new renewable energy targets for Victoria of 25 per cent by 2020 and 40 per cent by 2025.

“It’s the first time such ambitious renewable energy targets have been enshrined in state legislation anywhere in Australia,” Andrews said.

“Importantly, the VRET will cut the average cost of power for Victorians by around $30 a year for households, $2,500 a year for medium businesses and $140,000 a year for large companies, while driving a 16 per cent reduction in Victoria’s electricity sector greenhouse gas emissions by 2034-35.”

The government said the competitive VRET auction for up to 650 megawatts (MW) of renewable energy capacity would provide enough electricity to power 389,000 households – or enough energy to power Geelong, Ballarat, Bendigo and the Latrobe Valley combined.

However Grattan Institute energy program director Tony Wood said Australia desperately needed a nationally consistent energy and climate change policy, with bipartisan support.

He said that while the Victorian move had some “superficial advantages”, it was “bad policy” on a number of levels.

“It directly contradicts the Finkel Review recommendation for a nationally consistent energy policy – a recommendation endorsed by all federal, state and territory energy ministers. A far better response would be for Victoria to work harder with Queensland, South Australia and the Australian Capital Territory on designing a national CET,” Wood said.

“The Victorian government claims its scheme will cut costs for customers, yet the calculations do not include the payments the government will make to generators, or the additional costs of transmission to connect the proposed projects to the grid, or the costs associated with balancing the intermittency of wind and solar generation, as proposed by the Finkel Review.”

Victorian Council of Social Service chief executive Emma King said the legislative move was “bold, ambitious and important policymaking”.

However, VCOSS also voiced concerns about the impacts such a scheme might have on vulnerable or low-income households.

“As Victoria’s peak social welfare and advocacy body, these are real concerns,” King said

“The government has assured VCOSS that vulnerable households will not pay any extra on their energy bills to achieve these targets. Indeed, the Victorian government has already agreed to absorb all of the immediate costs associated with the current legislation.”

However, King said these “valid concerns” shouldn’t be used by opponents of clean energy to keep Victoria “locked in the past”.

Clean Energy Council chief executive Kane Thornton said the commitments made by the state government would “turbocharge” the renewable energy industry in Victoria.

“The renewable energy auction is a major step forward for communities, businesses and the state’s renewable energy industry,” Thornton said.

“This will turbocharge significant private investment in low cost renewable energy to fill the gap and bring power prices down.

“Victoria is realising an immense opportunity to grow its economy and preserve its future energy security through the establishment of a strong and long-term VRET scheme, which will ensure the roll-out of renewable energy projects well beyond 2020.”

Thornton said the auction round was the largest renewable reverse energy auction program to date in Australia, building on the success of the ACT government’s program.

“This is a significant addition to the Victorian government’s clean energy commitments to date, which include solar trams, solar schools, an energy storage initiative and a renewable energy certificate purchasing initiative,” he said.

Victoria’s opposition leader Matthew Guy said the Coalition would oppose the plan.