Earlier this month, RenewEconomy reported on Victorian Energy Minister Lily D’Ambrosio’s speech to the Commission for Economic Development of Australia, with the Minister saying the response to the VRET reverse auction had been “overwhelming”.
More than 15 proposals had come through the door, offering 3,500MW of new wind and solar projects. This would exceed the capacity of Snowy Hydro 2.0, but would be built in years rather than a decade.
As we head into the maelstrom of budget week in Victoria, there’s a simple question that needs to be asked: if there’s so much renewable energy ready to go, then why not go bigger?
Why not admit that 650MW was just a start and instead declare that the first auction will drive investment of 1500MW of new clean energy.
We know that the projects being put forward are ready to be built. The Minister herself said that these are “firm proposals, with approvals in place, ready to go”.
Industry insiders have suggested that the rates being put forward are highly competitive, around $60/MWh, which is no surprise given the pent-up demand in the system.
Given that these bid prices are significantly lower than average wholesale prices, the moment that these projects produce energy they will be making money for the government and lowering energy bills for Victorian families and business.
We also know that cumulative emissions matter – we are over-spending a carbon budget with implications that will reverberate through human society for decades and probably centuries. A tonne of carbon that we avoid today will do less damage than a tonne avoided in the future.
If we’re serious about tackling climate change then there’s no time to sit on solutions – we need to move as quickly as possible and embrace every opportunity to reduce emissions.
We’ve also seen the political benefits of being seen as a leader on renewable energy. Polling commissioned by Environment Victoriashowed that voters in the seats that will determine this year’s state election unequivocally support renewables and know that coal is yesterday’s energy source.
Our polling also showed that voters believe the most powerful barrier holding renewables back is a lack of political will – not cost or reliability. What better way to show political will than to fully embrace an opportunity when it walks through the door?
And of course, the benefits of renewable energy can’t come quickly enough. EY modelling showed that embracing a target of 5150MW by the mid 2020’s would deliver over 9000 jobs and reduce energy bills.
We know that energy prices sit at the top of Victorians concerns about cost of living – so why wouldn’t we embrace every opportunity to drive down prices?
The naysayers may counter that it is better to be modest the first time around. But we already know that reverse auctions work, because we’ve seen them operate so well in the ACT.
Victoria has access to excellent advice on reverse auctions, going so far as to bring Simon Corbell, the architect of the ACT’s system, on board as Victoria’s renewable energy advocate.
Australia’s response to climate change has been tarred by timidity, hesitance and fear, but right now the Victorian Government has every reason to feel ambitious.
Over the last three years, the Andrews Government has shown that it wants to be a leader on climate change but has only made modest investments to clean up our energy supply.
As the Treasurer steps to the dispatch box on Tuesday he can put his money where his mouth is, and fast-track Victoria’s transition to cleaner, cheaper energy.
Mark Wakeham and Dean Pizzetti are campaigners for Environment Victoria