All eyes on Victoria's first reverse auction for renewable energy projects

OPTIONS APLENTY: Victoria's renewable energy advocate Simon Corbell (inset) and Bendigo Sustainability Group president Chris Weir are eagerly awaiting Victoria's renewable energy reverse auction in November.
OPTIONS APLENTY: Victoria's renewable energy advocate Simon Corbell (inset) and Bendigo Sustainability Group president Chris Weir are eagerly awaiting Victoria's renewable energy reverse auction in November.

With Victoria’s first reverse auction for renewable energy projects looming, a national doyen of the industry has spoken of the potential grass-route benefits of the state government’s ambitious proposal.

Former ACT environment and climate change minister Simon Corbell was a significant driver of the ACT’s renewable energy target and reverse auction scheme, which at the time, he said, delivered the lowest ever prices for wind and solar in Australia.

Mr Corbell – hired as Victoria's renewable energy advocate late last year – said price would not be the only consideration the government made in the auction process.

“Winning an auction is not just about prices. Part of the (auction) criteria will consider what investment is planned for local and regional economic development projects,” he said.

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Bendigo Sustainability Group, for example, could partner with a company bidding for a project in central Victoria by asking them to invest in a local community solar farm if it is successful in the auction.

BSG president Chris Weir said funds could help the group install solar panels of roofs of houses in low socioeconomic areas that were struggling with “(energy) poverty”. 

A reverse auction is when companies bid the lowest price they would be willing to accept to develop renewable energy projects. 

“It’s a real way to achieve price discovery – you get a real and genuine market price for renewable energy,” Mr Corbell said.

“When you have a price set the next auction prices are invariably lower as people want to beat that (original) price.”

Victoria’s first auction will begin in November and is for 650 megawatts.

Mr Corbell said the Australian Energy Market Operator received around 5000MW of connection inquiries from across Victoria, meaning there was thousands of renewable projects being worked on across the state, including in central Victoria.

BIG PLANS: Bendigo Sustainability Group president Chris Weir, pictured here at Ceramet Solar's research facility at Bridgewater, wants to build four solar farms across the municipality in the next two years. Picture: DARREN HOWE

BIG PLANS: Bendigo Sustainability Group president Chris Weir, pictured here at Ceramet Solar's research facility at Bridgewater, wants to build four solar farms across the municipality in the next two years. Picture: DARREN HOWE

Legislation enshrining a 25 per cent renewable energy target by 2020, and a 40 per cent target by 2025 passed state parliament last week. 

And while the government has no official stance on how many MW of renewable energy it would take to achieve the 2020 target, Mr Corbell believes it to be around 1500MW.

Victoria currently sits at around 14 per cent renewable energy production, which has improved considerably over the past few years, Mr Corbell said.

The federal government this month moved away from a clean energy target mechanism, instead announcing a new national energy guarantee, which requires electricity retailers to ensure improved reliability levels while also reducing carbon emissions in line with Australia's Paris Agreement commitments.

The inconsistent message on renewable energy between state and federal governments could become problematic, Mr Corbell said. 

“There's a real risk the (federal) national energy guarantee could act as a handbrake on renewable energy development. If the emissions profile of the regulation is set too low it will mean there won't be enough incentive to build renewables over other existing forms of fossil fuel generation,” he said.

Despite this, the impending reverse auction and Victoria’s legislated renewable energy targets were important steps forward for the state, he said.

“It (reverse auction) is the largest renewable energy auction in Australia to date, it’s a very important thing to have with so much uncertainty at a national level,” he said.

Bendigo is considered a renewable energy gateway for areas north of the region that could provide greater solar and wind power. 

BSG was recently named as the host for pilot community power hubs in the region, which aims to improve local capacity for renewable energy.

The state government earlier this year provided $900,000 for three, two-year pilot community power hubs in Bendigo, Ballarat and Latrobe Valley to support the development of community-owned renewable energy projects.

BSG will coordinate activity in the region. 

The aim of the pilot community power hubs is to assist the community in accessing the skills and expertise required to develop and deliver community-based renewable energy projects.

The City of Greater Bendigo will play a role in mentoring surrounding rural eligible councils undertaking energy efficiency upgrade projects through the $3.4 million local government energy saver fund.

The pilot hubs are expected to create jobs and help reduce energy bills.

The hubs will serve to; reduce greenhouse gases, support communities in implementing their renewable energy projects and support other relevant state government energy priorities and initiatives

Grants of up to $110,000 a year over a period of two years are available for the delivery of each of the pilot hubs.

Each community power hub will identify the required services to allow community groups to progress community energy projects in their region and establish and coordinate a network of local organisations that can support the delivery of community energy in their region.