Victoria has announced plans to procure a minimum of 600MW of new solar and wind energy capacity for the state, through a second Renewable Energy Target (VRET) auction that will take government operations to 100% renewables.
State energy minister Lily D’Ambrosio said her department would also kick off a “market sounding process” to test industry interest and capacity for enough new renewables to power the state’s hospitals, schools and train network, among other things.
This market sounding process would begin on Wednesday, a government statement said, with a briefing to around 300 investors, ahead of the launch of a formal process.
Renewables will be at the heart of our Covid recovery.
Our government will be going 100% renewable. We’ll be tendering for more than 600mw of new build renewables to power our schools, trains, hospitals and other govt services. 1/2 pic.twitter.com/oVNVMpOuHj
— Lily D’Ambrosio MP (@LilyDAmbrosioMP) September 2, 2020
“Our government will be going 100% renewable,” said D’Ambrosio in a Tweet on Wednesday morning. “We’ll be tendering for more than 600MW of new build renewables to power our schools, trains, hospitals and other government services.
“We’re also asking businesses to tell us if they’d like to join our VRET2 tender, to get even more renewables built to reduce their power bills. More renewables. More jobs. Lower emissions,” the minister said.
News of the new renewable energy auction round comes as Victoria struggles through its fifth week of a strict, six-week Stage 4 lock-down in a bid to get on top of a second wave of Coronavirus infections and deaths.
It also follows calls from green group Environment Victoria for the urgent resumption of large-scale solar and wind energy auctions, to avoid the state’s renewable energy market going into a potentially devastating lull.
But the push for new investment in large-scale solar and wind also comes at a time when Victoria is struggling to accommodate existing renewables capacity on its grid – a problem that is already causing major delays to the commissioning of a number of projects, many of which came about through the 2017 VRET auction.
As RenewEconomy has reported, the issues in Victoria, which also affect south-west NSW, are the result of complex and questionable new connection rules, and also the slow pace of grid infrastructure upgrades to address issues which have been flagged for the best part of the past decade.
And such has been the scale of the problem for Victoria that in February of this year the Labor Andrews government – whose 50 per cent by 2030 renewable energy target was written into law in October 2019 – announced a dramatic intervention, in a bid to fast-track urgent grid upgrades and to unlock more large-scale renewables and encourage more big batteries.
To get around further such problems, it has been recommended that future VRETs target areas where there are no immediate grid constraints or where grid issues are being effectively resolved, such as the Gippsland area.
In its statement on Wednesday, the government alluded to the problem, saying the new auction process would also see “more support to come” to expedite and streamline grid connections.
“Renewable energy is supporting thousands of jobs and local businesses across Victoria – and it will help drive our economic recovery from coronavirus,” said D’Ambrosio. “It’s not only good for our economy, it will deliver more reliable, affordable energy to households across Victoria.”
“We know Victorians are doing it tough and affordable reliable power is more important than ever – this will help to deliver that as well as creating jobs and stimulating the economy,” she said.
The Clean Energy Council agreed that the timing of the government’s decision “couldn’t be better” after a tough six months, but also stressed the importance of getting the state’s grid connection issues sorted before more capacity was auctioned.
“It will be critical to ensure these projects can connect to the grid. We’re pleased to hear that the Victorian government is supporting the streamlining of the grid connection process and also the development of the renewable energy zone model to ensure these projects can contribute positively to the grid while providing investor confidence,” said CEC chief Kane Thornton.
In a statement on Wednesday, Environment Victoria said it welcomed the state government’s announcement and hoped to see further government commitments to ensure a steady and growing pipeline of renewable energy and storage projects.
“The state budget in October will be another key moment to show how climate solutions can drive our economic recovery,” said Environment Victoria CEO Jono La Nauze.
“The next step is government support to make households and businesses more energy efficient, which would create jobs across the state, reduce power bills and cut pollution.”