The Renewable Energy (Jobs and Investment) Bill 2017 (Bill) was introduced into the Lower House of the Victorian Parliament today. The Bill legislates the Victorian Renewable Energy Targets (VRET) announced in June 2017, which commit the State to generating 25% of electricity from renewable energy sources by 2020 and 40% by 2025. Importantly, the Bill is also designed to support schemes to achieve these targets.
The Victorian Government has not yet released further information regarding how the legislated VRET will operate in practice. In particular, it is not clear whether the State will use large-scale generation certificates (LCGs) or whether the generators must be located in Victoria (or only need to confer certain benefits to Victoria). Herbert Smith Freehills will be closely monitoring the progression of this Bill through Parliament and will be updating its clients regularly as and when further information is released.
First auction under the Victorian Renewable Energy Auction Scheme
One of the schemes to be supported by the Bill is the Victorian Renewable Energy Auction Scheme (VREAS). Any new capacity created under the VREAS prior to 2020 will complement the Federal Renewable Energy Target. The first auction under the VREAS (to be held as a reverse auction for new build generators) will open for bids in October 2017 for the award of contracts supporting up to 650 MW of renewable energy generation, divided into:
- 550 MW of large scale technology neutral renewable energy; and
- 100 MW of large scale solar-specific renewable energy.
Bids for the reverse auction will be submitted under a formal Request for Proposal (RFP) process. The RFP will detail the terms and framework of the auction as well as the key ‘value for money’ criteria to be evaluated. These details are yet to be released.
For more information or to explore possible opportunities for your business arising from the above auction scheme, please contact Gerard Pike.