Victorian Government sets new renewable energy targets

Publication June 2016

The Victorian Government has recently announced renewable energy targets of 25 per cent by 2020 (replacing a target of 20 per cent) and 40 per cent by 2025. Approximately 14 per cent of Victoria’s electricity is currently obtained from renewable sources. The newly announced targets are expected to be enshrined in legislation during 2017.

Victoria’s Minister for Energy, Environment and Climate Change, Lily D’Ambrosio MP, provided more detail on the targets in an interview with RenewEconomy.

This announcement follows the introduction of targets by a number of state and territory governments which exceed the Commonwealth target of 33,000 GWh (approximately 23.5 per cent) by 2020. The Australian Capital Territory (ACT) has recently committed to sourcing 100 per cent of its electricity from renewable energy sources by 2020, while South Australia and Queensland have committed to targets of 50 per cent by 2025 and 2030 respectively.

The targets will form part of Victoria’s Renewable Energy Action Plan (Action Plan), which is due to be released later this year. The Action Plan will also be influenced by community feedback on Victoria’s Renewable Energy Roadmap, which identified four priority areas:

  • transforming the wholesale electricity market toward renewable energy;
  • reducing the barriers to continued development of distributed generation (solar and small scale wind power) and energy storage;
  • encouraging household and community development of renewable energy generation; and
  • government support for renewable energy development.

Auctions to support investment

An auction scheme, including both technology-neutral and solar auctions, will be introduced to help Victoria reach these targets. Successful bidders will win long-term contracts for the electricity generated by their projects, increasing certainty for investors. A consultation process will soon commence on the design of the scheme. The first auctions are expected to be held in 2017 and the aim of the Government is to have 1,800 MW of new capacity built by 2020.

It is likely that the Victorian Government will draw on the experience of the ACT Government, which has run reverse auctions for:

  • 50 MW of solar generating capacity in 2013;
  • 200 MW of wind generating capacity in 2014 and 2015; and
  • 109 MW of capacity in 2016 (in a technology-neutral auction process) which required winning bidders to provide finance for the installation of battery storage to support solar PV in homes and businesses.

Successful projects in the ACT auctions included the Ararat Wind Farm, the Coonooer Bridge Wind Farm, the Hornsdale Wind Farm and the Sapphire Wind Farm.

We advised a number of participants in these auctions and would be happy to discuss our experience, and how this can be applied in Victoria, with you.

Amendment to Victorian Planning Provisions

Amendment VC130 (Amendment) to the Victorian Planning Provisions (VPP) has also recently been introduced.

The Amendment alters the VPP and all planning schemes by removing clause 52.32-8 from clause 52.32 (Wind energy facility). Previously, clause 52.32-8 exempted applications to amend an existing wind farm permit under s97I of the Planning and Environment Act 1987 (Act) from the planning panel process requirement under s97E of the Act, provided it did not increase the number of turbines or relocate a turbine close to an existing dwelling.   

The Amendment removed this exemption so that certain applications to amend a permit must now be subject to a panel hearing process. Applications must be referred to a planning panel if an objection to the amendment application is lodged and the original planning permit was the subject of a call-in by the Minister for Planning.

We advise a number of clients on the implication of planning scheme amendments and would be pleased to discuss the Amendment with you. Please contact a member of our Energy team for further details.


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