Scrapping VNI-West will “guarantee a massive increase” in power bills, former energy minister warns

Scrapping the VNI-West transmission line and other projects designed to support renewable energy will result in “massive” increasing electricity bills for Victorians, the state’s former energy minister Lily D’Ambrosio said.

In her first in-depth interview since stepping down as the country’s longest-serving energy minister at the end of July, D’Ambrosio told Renew Economy expensive fossil gas would have to make up as much as 30% of generation capacity – versus about 5% now – in the absence of VNI-West and related renewables.

New gas turbines would take at least five years to acquire – if not more, she said. Similarly, there was little evidence that Victoria would ever find low-cost gas to extract.

“You can’t say you oppose renewables, that you oppose transmission projects that are needed, and that you support backing failing coal generators and more gas-fired generation, and [then] say that you care about people’s energy bills,” D’Ambrosio said.

“All that will do is guarantee a massive increase in people’s electricity bills.”

Energy issues loom as one of the more contested policy areas of the state elections in November. The Liberal-Nationals coalition have made the promise to dump VNI-West in favour of supporting the take-up of solar by commercial and industrial sites instead.

One Nation, which has been vying with the three-term Labor government and the Coalition in the polls, has also pledged to scrap VNI-West, but also curb renewables in favour of new coal and even nuclear energy.

D’Ambrosio’s comments spanned several key policy areas that will be covered in Renew Economy in coming days. They also build on some of the arguments about what alternative plans might cost Victorians, aired in a seminar for the media earlier this week.

The former minister’s time as Labor’s energy spokesperson began more than 15 years ago, in opposition, giving continuity that allowed one minister “to really embed a lot of changes.”

When Labor took office in 2014, renewables made up about 11% of the state’s power supplies and that proportion has quadrupled since, to 45%, D’Ambrosio said, citing this progress as one of her proudest achievements.

“Our electricity prices are lower than the rest of the country,” she said, with the advance of clean energy pushing gas to a minimum as a source of power in the state.

D’Ambrosio, who attended a vigil in Melbourne on Monday night as a mark of respect to those killed by the devastating floods in Nepal, said it was important to keep climate change in mind when discussing the energy transition, even though renewables make financial sense as the cheapest form of new energy.

“Everything is about how economically it stacks up to do what the Victorian government is doing,” she said. “Even before you get to [greenhouse gas] emissions and climate change, the reforms that we’ve been pursuing absolutely stack up.”

As to VNI-West, D’Ambrosio noted that the original agreement was signed off with the Morrison government when Angus Taylor was the federal energy minister. Taylor now heads the federal Coalition. (See Taylor’s media release endorsing “cheap and reliable energy in Victoria”.

“We did a joint press conference in one of those rare occurrences” with Taylor, she said.

Apart from the disruption to Victoria’s energy plans from tearing up VNI-West, the move would also affect the state’s northern neighbour, NSW, where one part of the transmission line is being planned. That line would connect up to the Project Energy Connect that itself links NSW to South Australia.

“It’s the interdependency that needs to be improved rather than reduced,” D’Ambrosio said. “This is about security and reliability.” “

“What will happen is that Victoria’s electricity supply will be insufficient,” she said, referring to the conservative parties’ plans. “People will have blackouts, and people will have bills going through the roof because there’s just not enough electricity to go around.”

Renew Economy contacted the Victorian Coalition and the NSW government for comment.

D’Ambrosio said governments had to work hard to ensure they bring communities along what can be a disruptive journey. While there was some opposition to the energy transition, it was important the public heard the case the change and also shared in its benefits.

“It doesn’t mean [governments] always get things right, but you have to [try] because we owe it to people,” she said.

“We can talk about how the transition is important for us economically, for jobs more broadly, for the whole of the state, the skills development for energy resilience and affordability,” D’Ambrosio said.

“The big test is what it means for local communities, and that’s something that should never that government should never forget.”

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