Victoria’s state government has called for input from business and the community on the design of its renewable energy auction scheme, a key plank of its renewable energy target of 40 per cent by 2025.
Based on the highly successful reverse auctions pioneered in Australia by the ACT government, the Labor Andrews government will hold a series of competitive auctions, in which industry will tender bids for large-scale solar and wind energy development in the state, with long-term contracts awarded to those projects demonstrating the best value for money.
The auction process was announced by state energy minister Lily D’Ambrosio on Friday as part of the recently announced VRET – which in it’s first phase aims to reach 25 per cent renewables by 2020.
D’Ambrosio urged business and community to have their say on the scheme’s design, including structure, contractual arrangements, cost recovery mechanisms and auction evaluation principles.
Pat Simons, a spokesperson for the environmental NGO Friends of the Earth, which spearheaded the campaign for a Victorian Renewable Energy Target, said the reverse auction process had a number of added benefits, beyond procuring low-cost renewable energy generation for the state.
“Renewable energy auctions can deliver benefits for workers and the environment by adopting measures that encourage local jobs and manufacturing,” Simons said.
Friends of the Earth said it remained to be seen if the auctions will drive investment in energy storage and other innovations like the ACT scheme.
Based on current generation and demand forecasts, up to 5,400MW of additional capacity will be contracted over the life of the scheme.
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