A formal invitation to tender for projects to build out three of six designated Renewable Energy Zones in Victoria is expected to lead to the connection of 1.5 gigawatts of new generation capacity, the state government has said.
Victoria’s Labor Andrews government said on Monday that the Australian Energy Market Operator was launching the next stage of the procurement process for the state’s Murray River, Western Victoria and South West renewable energy zones, or REZs.
AEMO, which has additional responsibilities for managing grid connections in Victoria, has previously estimated that Victoria will need at least 5.4GW of additional large-scale projects and distributed energy resources investment to meet its 2030 renewable energy target.
To help accommodate this, AEMO has also developed a Transmission Roadmap for the state detailing a $3.5 billion suite of network development projects to accommodate the REZs.
Victoria put the call out for proposals for new renewable energy capacity in August, and this week both the state government and AEMO said they had received 30 project proposals offering a range of innovative solutions to strengthen the grid in three of Victoria’s REZs – and significantly more capacity than the expected 600MW.
“The extraordinary level of interest in these projects proves once again that Victoria is the home for renewable energy jobs and investment,” state energy minister Lily D’Ambrosio told RenewEconomy in an emailed statement.
“We’re getting on with the energy transition, backing investors through our $540 million Renewable Energy Zone Fund, modernising our grid and unlocking even more renewables.”
D’Ambrosio also revealed that to underline the strength of the REZ Stage One plan, the Clean Energy Finance Corporation would allocate up to $150 million in debt financing to support the accelerated development of new projects to be connected to the grid.
The minister noted that CEFC finance might also be made available to other Victorian REZ projects or more broadly, to projects enabling the development and connection of additional renewable generation capacity in Victoria.
And subject to projects meeting CEFC investment requirements, the federal government’s green bank might also choose to extend its total investment commitment beyond $150 million, D’Ambrosio said.
No details were revealed on the expected distribution of the projects across the three zones, or on the timeline for construction and grid connection of the new wind and solar capacity.
But timing will be all important for the state, not just in terms of meeting its 2030 renewable energy target, but to replace the outgoing coal-fired power capacity, which in Victoria includes the Loy Yang A and B and Yallourn power stations, all in the Latrobe Valley.
According to the latest planning blueprint from the Australian Energy Market Operator, published late last week, coal plant closures will occur at three times the expected rate across the NEM, and all of the country’s brown coal generators could be gone by 2032 – well ahead of the late 2040s dates penciled in for the Loy Yang plants.
The next step for Victoria in the REZ process would see the Andrews government work with AEMO to identify the next tranche of major priority energy projects for consideration as part of the Stage Two development of REZ in Victoria, a statement said.
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