From the Premier of Victoria:
Victoria has set ambitious renewable energy targets to create thousands of new jobs and cut the state’s greenhouse gas emissions.
By 2020, 25 per cent of electricity generated in the state will come from renewable energy. By 2025, that will rise to 40 per cent.
Premier Daniel Andrews and Minister for Energy, Environment and Climate Change Lily D’Ambrosio today announced the targets while marking the arrival of the first turbine blades at the Ararat Wind Farm.
Currently, about 14 per cent of Victoria’s electricity comes from renewable sources.
It’s anticipated that by 2025, up to 5400 megawatts of new large-scale renewable energy capacity will be built in Victoria – representing an estimated $2.5 billion of investment in the state.
That means more than 4000 additional jobs in the renewable energy sector during the expected peak year of construction in 2024, and around a 12 per cent reduction in electricity sector greenhouse emissions by 2034-35.
The Premier also announced an auctions scheme – running a series of technology-neutral auctions, as well as solar auctions – which will see project developers compete to be the lowest cost provider.
Successful bids will be given long-term contracts to support their projects, providing certainty for investors.
There is great potential for large-scale solar to become a mainstream source of energy across Australia over the next decade thanks to its generation and energy demand, rapid advances in technology and decreasing costs.
The Andrews Labor Government will work with the renewable energy industry, electricity networks and retailers, and consumer groups to refine the details of the scheme, with the first auction of contracts to begin next year. Separate auctions will be held for large scale solar projects.
The targets and auction scheme form a key part of Victoria’s Renewable Energy Action Plan to be released later this year – reviving a sector which has stalled since the Federal Government cut the national Renewable Energy Target in 2015.
And from Reneweconomy comes an interview with Victorian energy minister Lily D’Ambrosio:
RE: What will the cost be?
D’Ambrosio: We have done some preliminary analysis. There will be no cost to households and business before 2020, and after that we talking about price increases in the order of cents per week. It will have a very marginal cost flow through, but it will generate 3,000 jobs by 2020.
RE: Is the cost of the new technologies offset by the expected fall in wholesale prices?
D’Ambrosio: That is one element. The other element is that the current slump in investment in renewables means that this is the best time to invest because of the higher price of renewable energy certificates. The added cost of these projects to going to be marginal.
RE: Is the intention that VRET (Victoria renewable energy target) be additional to the national scheme?
D’Ambrosio: From 2020, it will be additional, it will be additional.
RE: It seems to me that you are taking on ACT model for reverse auctions. Will you be using contracts for difference as they do in the ACT?
D’Ambrosio: That is one option, but we will finalise details after consultation with industry in July and August. And we will also finalise then what the technology split will be. We intend to hold separate auctions for large scale solar and other options, will be technology neutral. Those details will need to be worked through with stakeholders. But by 2017 we intend to introduce legislation, targets and the mechanism to have that target. That means we will be the first state that won’t just have an aspiration (for high renewables), but it will be backed up by legilstion.
RE: So what are you aiming to have built by 2020?
D’Ambrosio: The first auctions will be held in 2017, and we are looking at getting 1,800MW of new capacity built by 2020, that is what we are aiming for.
RE: That sound ambitious.
D’Ambrosio: It is doable. Our analysis shows that this is achievable.
RE: What about small scale solar and battery storage? What plans do you have there?
D’Ambrosio: Rest of action plan not realsing until later this year. More to say on battery storage and small scale later this year.
RE: And the impact on the big brown coal generators?
D’Ambrosio: In terms of initial analysis there is no real impact on the existing generators. They (the owners), of course, have made pronouncements about where they see themselves in future. So there is no real impact on that front. As for the transition for the Latrobe Valley, the government announced in its recent state budget a $40 million assistance fund to assist industries in the Latrobe Valley to diversify, and for new jobs to come from that. It (the transition) is not going to happen overnight, but we have made some initial investments.
We are such a pack of dills. How can oversupplying the National Electricity Market (NEM) be seen as an efficient transition regime for energy? It’s like we’re pre-Federation, blundering around with different states doing different stuff resulting in huge inefficiencies like mismatched railway gauges.
The transformation will take place regardless but the politics is ensuring that it will be FAR more expensive than it ever needed to be with market distortions and mis-allocated capital the rule rather than the exception.
That this is largely the fault of the side of politics that claims to be the better economic manager never ceases to appall.
