Victoria fast-tracks coal exit with target for 95 pct renewables by 2035

Victoria’s Labor government has jacked up its targets for clean energy and emissions reduction, setting the state on course to reach a 95 per cent share of renewables on its electricity grid by 2035 and a 75-80 per cent reduction in emissions by the same date.

The Andrews government unveiled the new targets on Thursday, one month out from the state election, also boosting its 2030 renewables target to 65 per cent and setting a goal for net zero by 2045, five years ahead of most of the rest of the country – and world.

The new targets boost the existing interim VRET from 50% to 65% by 2030, and the emissions reduction target from 50 per cent on 2005 levels by 2030 to 75-80 per cent by 2032.

The announcement follows, and trumps, the Queensland state government’s new target of reaching 80 per cent renewables by 2035, and appears to be more or less in line with the Australian Energy Market Operator’s Integrated System Plan, which assumes brown coal will leave the grid by 2032.

AGL has advanced the proposed closure date of Loy Yang A to 2035 at the latest, while Alinta has set no early date yet on Loy Yang B.

To deliver on the new targets, the government has announced that it will, if re-elected in November, set up a up a state-owned energy company to build new wind and solar projects – a re-boot of the State Electricity Commission.

This is likely to be the most controversial part of the package, given the friction between state and private investment, and could raise questions about the future of some private retailers.

Labor says it will invest “at least” $20 million to revive the SEC and set it up as an energy market proponent, with its headquarters in Morwell, in the Latrobe Valley – giving the state’s coal centre a key role in the clean energy future.

Under a 10-year plan, the government will hold a controlling interest an initial rollout of 4.5GW of new zero emissions power generation – enough to replace Loy Yang A, the government says.

Victorian premier Daniel Andrews says the SEC will replace all of that capacity with renewables projects that will be 51% owned by the Victorian taxpayer. He says the government is looking to super funds as its preferred investment partner for the other 49%.

And while the new SEC will focus first on generation, a government fact sheet says it will consider all options – like becoming a state-run retailer, partnering with an ethical retailer or remaining in the wholesale market only – “to get the electricity it generates to Victorians.”

“Renewables will replace coal, and these new ‘power stations’ will be owned by every Victorian to benefit every Victorian,” a statement from Andrews said on Thursday.

“Big energy companies want to offshore profits – we want to offshore wind. Renewable energy is the future: it’s good for our climate, good for lower power bills and good for jobs.”

The coal companies are leaving

In a press conference on Thursday morning, the premier was more than happy to hammer a few more nails into the coal power sector’s coffin.

“The [coal generation] companies are leaving. They have made their money and they are going, they’re also not particularly reliable.

“We’ve seen in periods of peak demand, all manner of maintenance that has to be done all manner of breakdowns; it’s not unlike the petrol prices going up every long weekend,” he said.

“The State Electricity Commission was owned by all of us and benefited all of us and that’s exactly what we are going to deliver if we are reelected on the 26th of November.”

In a Tweet on Thursday, state energy minister Lily D’Ambrosio said the government-owned energy company would ensure the Victorian public benefit directly from the projects, including through lower power prices.

“Today, we cement Victoria as a global climate action leader,” said D’Ambrosio.

“We’ll have 95% renewable electricity in Victoria by 2035 – bringing an end to polluting, coal-fired electricity. This will slash emissions and our power bills while supporting 14,500 jobs.”

Labor says the new targets and clean energy initiatives will increase Gross State Product by about $9.5 billion and support 59,000 jobs through to 2035.

The Andrews government’s boosted renewable energy and emissions target comes just weeks after it announced the nation’s most ambitious energy storage target, and kicked it off with funding for a new big battery in the state’s Murray Renewable Energy Zone.

The new emissions target falls short, however, of calls to shoot for net-zero emissions more than 16 years ahead of schedule – an target based on data released late last month showing the government had beaten its 2020 target by nearly 10 per cent.

“Momentous.” “Epic.” “Breakthrough moment.”

Clean Energy Council chief Kane Thornton says Labor’s “momentous announcement” sends a powerful signal to investors that Victoria is determined to deploy large amounts of new renewables and manage the phase-out of coal.

“This is the renewable energy ambition that the Clean Energy Council has been advocating for, and Victoria is now leading the way,” said Thornton.

“Victoria is replacing failing, costly and dirty coal-fired power with clean, reliable, low-cost renewable energy. Today’s announcement builds on the recently announced legislated renewable energy storage targets … and illustrates sensible planning that will keep the lights on for Victorians,” he said.

“This is what clean leadership looks like – Premier Dan Andrews and energy minister Lily D’Ambrosio have today committed to a once-in-a-generation energy shift,” said Environment Victoria CEO Jono LaNauze in a statement on the news.

“This is a monumental shift for Victoria that is of national and global significance. Future generations will look back on this moment as a turning point in Australia’s fight for a safe climate.”

“This is a big move for a state that used to be almost entirely reliant on burning coal for its electricity needs and sets the benchmark for states like Queensland and Western Australia that are lagging behind in their emissions reduction efforts,” said the Australian Conservation Foundation’s climate and energy program manager Gavan McFadzean.

“Victorians are feeling the impacts of climate change – through record-breaking floods some years and bushfires and heatwaves other years – so strong, decisive action to move away from fossil fuels is responsible and important.”

“This is a breakthrough moment for Victoria’s plans to transform the energy system to act on the climate crisis, that will accelerate the rollout of renewables and put it in public hands,” said Pat Simons, Friends of the Earth’s renewable energy spokesperson.

“It’s great to see the Andrews government listening to stakeholders, taking a hands-on approach and bringing energy back into public ownership,” added Wendy Farmer, FoE’s Gippsland Community Organiser.