The 2020-2021 Victorian Budget will see an injection of Victorian Government capital to continue encouraging investment in renewable energy technologies across Victoria.
The Victorian Government has announced that it will invest a total of $540 million over the next four years to establish six renewable energy zones (REZs) across Victoria. The REZ’s will be located in Western Victoria, South West Victoria, Murray River, Central North Victoria, Ovens Murray and Gippsland.
These zones will assist in increasing grid stability and will be overseen by an authority which will aim to streamline and improve transmission and energy storage infrastructure to connect and back up more renewable generators.
The REZs and VRET-II Renewables Auction market sounding process announced in September 2020 (see our post 600MW Round 2 Victorian Renewable Energy Target (VRET) auction to drive Victoria’s Covid recovery) are intended to further the Government’s intention to have “the best projects in optimal locations”, however the Minister for Energy, Environment and Climate Change, Lily D’Ambrosio did not state that successful VRET-II proposals will be limited to projects located within REZs.
Under VRET- II the Government will be seeking Requests for Proposals shortly from Project proponents with the intention of having PPAs/Support Agreements signed in 2021 for at least 600 MW of new renewable energy projects to contribute to the Government’s legislated target of 40% renewable energy by 2025 and net-zero emissions by 2050.
A further $108 million will also be invested by the Government into the three key areas of innovation, offshore wind and the hydrogen industry. The funding will provide direct industry grants to support research, start-ups and innovation grants to ideas that are considered to provide cleaner, more renewable power.
A portion of the $108 million will be used to establish an innovation fund which will support initiative programs for the development of renewable energy projects. The Minister states that the Government is keen to hear from the industry about a range of technologies that can be supported by the innovation fund.
Another portion of the $108 million will be allocated to the development of an offshore wind industry in Victoria now that the Federal budget has allocated $4.8 million to developing a regulatory framework for an offshore clean energy infrastructure industry.
A third portion of the $108 million is to be directed towards the renewable hydrogen industry. The Minister believes that hydrogen has the potential to be a transformative industry for Victoria due to its proximity to the Bass Strait oil fields and the distinct advantages associated with hydrogen being used as feedstock for the manufacturing sector.
How HSF can help: HSF has a market leading full service renewable energy project and project finance team in Australia and Victoria and advised on three of six successful VRET projects following the first round of the VRET Auction in 2017. We are currently acting on leading edge hydrogen, battery storage, wind and solar projects in Australia and are keen to discuss your potential project or investment.
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