The Victorian Premier declared an ambitious renewable energy target plan. Their attempt to use clean energy is admirable, but some experts raised concerns.


Some energy players showed disappointment on Victoria’s renewable energy target (RET). They think it could worsen the high electricity prices already experienced by South Australians. Experts seem to agree. They believe this could be a costly gamble if the federal renewable energy target won’t go up after 2020.

RET isn’t flawless

Coal-fired power saves South Australia’s energy demands when the wind isn’t blowing. But this would no longer work if Victoria also plunges on renewables, according to Grattan Institute’s Tony Wood.

For CME’s Bruce Mountain, 40% of electricity by renewable power could give a cheap boost to wind and solar in Victoria. However, this 2025 Victorian target is only possible if it piggybacks off the federal RET.

He added that funding the target could be a significant impost for Victoria. This is likely if the RET expires on schedule in 2020 in addition to sticking to the 40 per cent target

It’s still feasible  

Mr. Mountain said that Victorian policy was one of the biggest developments in the National Electricity Market (NEM). It appears at a time of instability in energy.

NEM wholesale electricity prices are at near record levels. Gas prices have also surged in cold weather, causing a $100 million hit to AGL Energy.  Unfortunately, a meeting meant to tackle these issues was delayed due to the federal election.

Renewables comprised 40% of South Australia’s power. It caused the region the highest NEM prices on the mainland. Queensland’s target was quite aggressive. But, Victoria was the first state to follow tiny ACT. It was also the first to back its target with subsidies.

According to Victorian Premier Daniel Andrews and Energy Minister Lily d’Ambrosio, the state would underwrite the target. Auctions will be conducted to get the cheapest projects.

The government intends to provide long term power purchase agreements for assurance. They anticipate construction of 5400 megawatts of new wind and solar capacity. It’s almost three times the current capacity.