Victorian Government announce market sounding process to test industry interest and capacity for 600+ MW of new solar, wind and other renewable energy projects.
Round 2 VRET auction
The Minister for Energy, Environment and Climate Change, Lily D’Ambrosio, announced on 2 September 2020 the commencement of a market sounding process from interested proponents for the second round of the VRET auction in Victoria (the Process).
The Process will explore industry appetite for over 600MW of new solar, wind, and other renewable energy projects. The Government’s intention is that, once delivered, the projects will produce enough power to supply every hospital and school in Victoria, Melbourne’s train network and a range of other Victorian Government infrastructure and services.
The Process will also explore the potential for electricity intensive industries and businesses to purchase renewable energy alongside the Victorian Government, as well as contribute towards the Victorian Government’s legislated target of 40% renewable energy by 2025 and net-zero emissions by 2050.
Successful projects in the 2017 VRET auction were awarded a long term ‘Support Agreement’ with the State of Victoria which ensured revenue certainty through a hybrid payment mechanism involving both fixed-price and variable contract-for-difference payments. We expect that winning projects in this Process will be offered similar Support Agreement terms.
A formal launch and further information is expected from the Victorian Government in due course. In the meantime, industry participants can register their interest in the Process here.
How Herbert Smith Freehills can help
The first round of the VRET auction in 2017 saw 928MW of renewable energy projects achieve Financial Close, exceeding the 650MW that was initially sought when the process was announced.
Of the six successful projects, Herbert Smith Freehills’ market leading energy and renewables team advised on three, being the 98.8MW Winton Solar Farm, 336MW Dundonnell Wind Farm and the 157.5MW Mortlake South Wind Farm.
By Heidi Asten, Nick Baker, Alison Dodd and Gerard Pike.
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