Victoria budgets $540m to develop six new Renewable Energy Zones

Victoria’s Labor state government has set aside $540 million to develop six dedicated renewable energy hubs across the state, as it works to unlock – and accommodate – gigawatts-worth of new large-scale solar and wind power on the path to 50% renewables by 2030.

The half a billion for renewable energy zones was announced in Tuesday’s 2020/21 State Budget as part of an “unprecedented” $1.6 billion spend on renewable and smart energy initiatves, including the $797 million set aside for energy efficiency that was announced last week.

The Andrews government said the $540 million would to establish six Renewable Energy Zones – “from sunny Mildura to the windy east coast” – along the lines of the recommendations made in the Australian Energy Market Operator’s recent Transmission Roadmap for the state.

As AEMO CEO Audrey Zibelman put it, the establishment of REZs aims to map out how alternative patterns of generation might effect the optimal development of transmission and to consider projects that might best support areas of high developer interest.

The Victorian government describes the REZs as the “energy hubs of the future” – supporting businesses, jobs and towns across regional Victoria.

“We’re driving our economic recovery from coronavirus with renewable, reliable energy that will save families money and support tens of thousands of Victorian jobs,” state energy minister Lily D’Ambrosio said in a statement on Tuesday.

“It’s a three-in-one investment – establishing Renewable Energy Zones will create local jobs, reduce power prices and advance our work to tackle climate change.”

The Budget also sets aside $12.6 million to underwrite the state’s second renewable energy auction, which will drive the development of 600MW of new clean energy generation capacity, some of which will be used to power state government operations and assets.

Another $108 million will go towards fast-tracking “innovative and transformational” renewable energy and hydrogen projects, including Australia’s first offshore wind farm, the proposed Star of the South.

“Hydrogen has the potential to transform manufacturing and households that currently use gas – ultimately driving down emissions and better using Victoria’s existing gas infrastructure and skills,” the statement said.

Community energy projects, including microgrids and shared battery storage systems, will get a A $27 million boost, while $21 million will allow for the installation of renewable energy systems at community buildings, and support the ResourceSmart Schools program.

An unspecified amount of funding was also said to be going towards the roll-out of an electric vehicle fast-charging network that would span major highways and key tourist destinations, the government said.

The state’s spend on renewable energy and the planning and infrastructure required to support it was welcomed be environment groups as good news for the Covid recovery and significant action on climate change.

“Grid upgrades in six new Renewable Energy Zones across the state will unlock Victoria’s incredible wind and solar resources, bringing enormous amounts of investment and jobs to regional Victoria,” said Environment Victoria Jono La Nauze.

“Combined with the $100 million commitment to accelerating the KerangLink transmission line and interconnector, this funding helps us move towards a modern energy grid that can incorporate significantly more wind and solar,” he said.

“The Andrews government has delivered a clean recovery for Victoria that will create thousands of jobs while cutting emissions,” said Leigh Ewbank, Friends of the Earth campaigns coordinator.

“The next logical step for the government is to act decisively on climate change. Setting science-based Emissions Reduction Targets can drive Victoria’s long term economic recovery and ensure our state tackles the climate crisis.”

Policy thinktank The Australia Institute also welcomed the Victoria budget focus, and spend, on renewables, “hot on the heels” of the NSW Berejiklian government’s own very impressive Electricity Roadmap policy platform.

“As ageing and unreliable coal power stations retire, this plan will help keep the lights on and power the economy with cheaper, renewable energy,” said TAI climate and energy director Richie Merzian.

“The only losers will be the big retailers and coal generators that dominate the National Electricity Market.”

The Clean Energy Council said it welcomed the Victorian budget announcement as an important recognition of the role the clean energy sector plays in the state’s economy.

“It is also an encouraging example of the need for governments, education and training institutions and industry players to work together to improve employment outcomes and help rebuild the economy post-COVID-19,” said CEC chief Kane Thornton.