Daniel Andrews, the Premier of Victoria has said his Labour government, if re-elected next month, will invest an initial A$1 billion (£560 million) in 4.5 gigawatts of renewable energy projects.
He also accused privately run energy generators of reaping huge profits “at our collective expense” without helping to achieve net zero goals.
Victoria currently relies on three coal plants for around 60% of its electricity. Last year the state negotiated an early closure, in 2027, for one owned by EnergyAustralia; AGL Energy which operates another, just brought forward the end date for its plant to 2035.
However, both the industry and investors are yet to replace the capacity with renewables. In fact, AGL has not devoted any capital expenditure to wind or solar since 2016, according to hedge fund Snowcap Research in February.
Andrews intends to set the ambitious target of reducing carbon emissions by up to 80% from 2005 levels by 2035, which makes developing more wind and solar power vital. Meanwhile, renewable energy can offer the kind of predictable revenue streams of long-term infrastructure assets that deep-pocketed Australian pension, or superannuation, funds increasingly want to invest in directly.
The Andrews Labour government plans to spend £7.5m to revive the commission and open an office in Morwell, in the Latrobe valley – the heart of Victoria’s shuttering coal industry. The state will keep a 51% stake in the agency and its wind and solar projects. “Like-minded entities”, such as industry super funds, would be the preferred investors for the remaining share.
What are the government’s new emissions targets?
Victoria has brought forward its net zero target by five years to 2045, tugging it in line with the Australian Capital Territory (ACT) which aims to reduce emissions by 65%-75% by 2030 and 90% by 2040.
The state’s previous target was to reduce 2005-level emissions by 28%-33% by 2025, and 45%-50% by 2030. It will now seek to legislate the 2035 goal of a 75%-80% cut.
Victoria also lifted its target for 95% of electricity to come from renewables by 2035, from a previous goal of 50-65%. Those higher goals were “a lot more significant” than the SEC revival, Reed said. “It’s well beyond business as usual.”
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