Victoria: the place to be for new energy

New energy technologies

By Vanya Kumar, Executive Director, Commercial and Investment Attraction Department of Environment, Land, Water and Planning – Government of Victoria

The Australian state of Victoria is one of the most exciting energy markets in the world. The state has been at the forefront of Australia’s energy transition since 2014. An unprecedented $1.6 billion clean-energy package, announced as part of the 2020-2021 State Budget, is accelerating the transformation of Victoria’s energy system. This record investment adds to Victoria’s existing competitive advantages including a stable civil structure, a robust investment environment and world-class infrastructure for clean energy manufacturers, suppliers and project developers.

In just six years, the Australian state of Victoria has more than doubled its share of renewable energy in power generation and surpassed its 2020 renewable energy generation target of 25%.

Since June 2019 alone, Victoria has connected 1.6 gigawatts of new renewable energy capacity – more than any other state in Australia – and is on track to meet its next renewable energy targets of 40% by 2025 and 50% by 2030.

These legislated targets, combined with strong planning frameworks, provide certainty for investors.

The energy transition as an economic opportunity

New energy technology has been identified as one of the growth sectors vital to Victoria’s future economic prosperity.

In the past four years, Victoria has progressed to be Australia’s leading state for renewable energy jobs and investment. Victoria is now building upon that success with a $1.6 billion clean-energy package, including funding to develop Renewable Energy Zones, a huge spend on household and business energy efficiency, and support for new energy technologies.

VICTORIAN OPPORTUNITIES IN THE NEW ENERGY TECHNOLOGY SECTOR

LARGE-SCALE OPPORTUNITIES

Wind

Bioenergy and W2E

Large-scale solar

Marine/ offshore

Grid-scale storage

Hydrogen

DISTRIBUTED ENERGY-AND-DEMAND SIDE OPPORTUNITIES

Residential solar PV and storage

Energy technology

Electric vehicles

Energy efficiency

Digital infrastructure

Developing Renewable Energy Zones

From 2021, Victoria will invest $540 million to develop six Renewable Energy Zones (REZ) across the state. This investment will be used to leverage private investment in the REZ, which have been identified by the Australian Energy Market Operator for their high renewable energy potential.

Victoria’s wind resources are among the best in the world, especially in the south and west of the state. Victoria also has strong solar potential, particularly in the north-west. To put that solar potential into perspective, the state’s capital, Melbourne, receives over 40 per cent more solar irradiation than Berlin. Despite this, solar accounts for similar shares of power generation in Germany and Victoria (7 per cent), underlining the enormous scope for growth in Victoria.

The $540 million investment in REZ aims to unlock these wind and solar resources by strengthening the transmission grid in the areas of the highest potential. Funding will also be provided to support a second renewable energy auction, which will target a minimum of 600 megawatts of new capacity. Victoria’s first renewable energy auction was the largest in Australia when launched in 2017, delivering 928 megawatts across six large-scale projects.

New energy technology has been identified as one of the growth sectors vital to Victoria’s future economic prosperity.

Energy efficiency

Victoria is providing an additional $500 million to improve energy efficiency in homes and businesses, largely through an extension of the Victorian Energy Upgrades (VEU) Program.

VEU provides discounted energy efficiency products to households and businesses, saving participating households an average of $122 each year, and businesses $511.

The program provides opportunities for German companies and products that have evolved under the European Union’s world-leading energy efficiency standards.

Victoria’s energy efficiency programs will also support electrification and energy demand management technologies – two areas where Germany’s depth of expertise and product offerings provide abundant opportunity for investment.

Supporting next generation energy technologies

A $108 million Energy Innovation Initiative will fast-track new energy technologies, with specific support for offshore wind and hydrogen.

There are currently no offshore wind farms in Australia, but Victoria has some of the best offshore wind resources in the world and a well-developed marine construction industry. Renewable hydrogen is another technology where Victoria could develop a global competitive advantage. The state’s world-class solar and wind resources could be used to produce hydrogen more cheaply than anywhere else in the world, opening up significant export opportunities, particularly to Germany.

The German industry association, BDI, has estimated that Germany may need to import up to 340 terawatt hours of green synthetic fuels, including hydrogen, by 2050. This is equivalent to more than half of Germany’s annual power generation. A World Energy Council report has identified Australia as a potential ‘Giant’ in hydrogen exports, due to its land and resource capacity. Victoria is well-placed to secure its position in this rapidly emerging international market due to our abundant renewable resources, a skilled workforce, existing gas pipelines and export infrastructure.

The initiative includes an Energy Innovation Fund to support new energy technologies, with Round 1 of the fund currently open to offshore wind proposals. Pre-applications for Round 2, which will support other renewable energy technologies, is also open. More details can be found on the website.

Investment opportunities

International investors have long been attracted to Victoria’s strong economy, world-class infrastructure and stable investment environment. Australia ranks amongst the top-10 countries for rule of law, and the top-five for quality of regulatory environment, fair administration of justice, the safeguard of personal security and protection of property rights. Melbourne is also rated as Australia’s most innovative and liveable city.

Strong policy settings, ambitious renewable energy targets and clear planning frameworks provide confidence to investors and our advanced manufacturing and supply chain capabilities position local suppliers to support project development.

The Business and Industry Engagement Team within Victoria’s Department of Environment, Land Water and Planning can help clean energy investors, suppliers and project developers unlock the many opportunities that Victoria offers. The team maps the supply chain and identifies businesses with capability to improve local participation in the building, operation and maintenance of large projects and in the supply of new technologies and solutions for local businesses.

For further information, contact the Energy Group’s Director, Industry Engagement and Development Gabrielle Henry (a German speaker) or Peter Hansford, Manager Business Development.