Victoria’s Roadmap

Delivering jobs and a clean energy future Authorised by the Victorian Government Department of Economic Development, Jobs, Transport & Resources 1 Spring Street 3000 Telephone (03) 9208 3333

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Image credit: p.18 Matthew Cawood, p.21 Karl von Moller

August 2015

© Copyright State of Victoria Department of Economic Development, Jobs, Transport & Resources 2015

Except for any logos, emblems, trademarks, artwork and photography this document is made available under the terms of the Creative Commons Attribution 3.0 Australia licence. This document is also available in PDF and accessible Word format at www.energyandresources.vic.gov.au August 2015 1

Contents

Minister’s Foreword 2

1. A Roadmap for renewable 4

2. Renewable energy in Victoria today 8

3. Transforming Victoria’s generation stock towards renewable energy 11

4. Addressing barriers to distributed generation and storage 14

5. Encouraging household and community renewable generation 19

6. Government role in facilitating the uptake of renewable energy 22

7. Next steps 24 2 Victoria’s Renewable Energy Roadmap

Minister’s Foreword

Major economies around the world are transitioning their markets to deliver sustainable outcomes. They are repositioning industries and labour forces towards modes of production which are driven by renewable energy sources and new energy technology, to avoid the economic and environmental costs associated with non-renewable fuels.

Governments which act now to facilitate The Action Plan is being developed market transition will be better placed in consultation with the Victorian in the future to take advantage of the community. economic opportunities which arise from sustainable industries. Conversely, This Roadmap informs our economies which don’t transform will be consultation. It will: exposed when the rest of the world shifts away from non-renewable sources. • identify policy and regulatory barriers which are stifling renewable A critical element towards delivering a energy development at a state level; sustainable economy is to increase the • provide information and facilitation supply of renewable energy generation services to support renewable in a market. Currently, Victoria only energy projects; and produces 12 per cent of its energy • investigate options for Victoria to from sustainable sources. take action independently where The Andrews Labor Government Federal policy is failing, and recognises the importance of facilitating complementary actions to attract a sustainable energy market. Therefore, investment and jobs for Victoria. we consider it vital to establish a The Roadmap complements work framework to further incentivise the already undertaken by the Labor growth of renewable energy in Victoria, Government to open up Victoria to to achieve sustainable jobs and additional investment in renewable environmental benefits. energy. We have promoted wind energy, by reducing the required To grow renewable energy in Victoria, consent distance from two kilometres the Labor Government is developing to one kilometre from a dwelling, a Renewable Energy Action Plan. and returned responsibility for wind This Action Plan will set out a farm planning approvals from local range of measures to help drive the councils to the Minister for Planning. utilisation of sustainable energy sources We have also awarded funding to in Victoria. This will include establishing two pioneering community energy a renewable energy generation target projects, at Newstead and at and policies to assist communities Woodend, to develop projects to power their neighbourhoods from which provide clean energy to renewable sources. Through these their local communities. measures, the Labor Government will promote clean energy and deliver jobs. August 2015 3

Alongside this work, the Government is developing an Energy Efficiency and Productivity Strategy, and a New Energy Technologies Strategy. The Act is under review and we are investigating the benefits of introducing a state reduction target.

I look forward to working in partnership with all Victorians to achieve a sustainable energy future. Hon Lily D’Ambrosio MLA Minister for Energy and Resources 4 Victoria’s Renewable Energy Roadmap

1. A Roadmap for renewable energy in Victoria

Victorian Government objective: Accelerating development of renewable energy generation in Victoria to reduce emissions, create jobs, and put downward pressure on energy prices

1.1. Victoria’s energy The integration of Australian gas sector challenge production with the global economy is set to significantly influence gas prices The energy sector is a vital element of in coming years. New technologies any economy. Energy is an important such as solar PV, smart appliances input into business operations and and digital meters, and emerging an essential service for households. storage technology, are changing Therefore, energy costs are a significant the way customers use and produce factor in the cost of living and doing energy and engage in the energy business. The development of energy market. There is also a growing resources also provides economic understanding that we need to move development opportunities and can to a more environmentally sustainable itself be an important creator of way of producing our energy. Policy wealth in an economy. frameworks associated with climate change issues are affecting, and will Victoria has traditionally relied on continue to affect, developments in brown coal from the the energy sector. and oil and gas from the to power the state. This has provided The Victorian Government recognises Victoria with a comparative advantage these challenges. The Victorian energy as a place to invest in operations such sector is well placed to respond – as manufacturing, and has provided the Victoria has a dynamic and competitive Victorian economy with value from the energy industry in which participants utilisation of our natural resources. have the flexibility and commercial imperative to respond to emerging This traditional operating environment market trends, and it is well endowed is now rapidly changing. with the energy resources of the future. prices have risen substantially However, the sector needs government in recent years, partly driven policy leadership to reach its full by changing demand patterns potential in this new environment. increasing peak electricity demand. The Government’s policy priorities in renewable energy, energy efficiency, new energy technology and consumer protection provide important components of the policy framework for the energy sector to address these challenges.

Our traditional energy operating environment is now rapidly changing. The Victorian energy sector is well placed to respond. August 2015 5

1.2. Shifting Victoria’s economy This Roadmap, and the priorities and to a low-emissions future initiatives contained within it, represent the first step in re-establishing Victoria’s Climate change is one of the most critical position as the leading state in Australia issues facing our state. All national, state for renewable energy investment. and local governments need to play a role in re-orienting the global economy Driving jobs and investment to achieve emissions reductions equal to what is required to mitigate against The Victorian Government is climate change. Those jurisdictions committed to sustainable development making early investments will realise and to decreasing Victoria’s reliance economic benefits sooner, and avoid on non-renewable sources of energy. potentially more significant changes This commitment is important in and costs into the future. They will be addressing the environmental better positioned to be competitive in consequences of climate change and the international marketplace, and to take is also vital for the future of job creation advantage of the economic opportunities and economic development in Victoria. that such transformation presents. Transforming our energy generation sector towards renewable energy The Victorian Government is adopting provides important opportunities for a multi-faceted approach to facilitate new businesses and jobs in Victoria. the creation of clean energy jobs and transition Victoria’s energy industry Internationally, the renewable towards a low carbon future. The energy sector is an area of dynamic approach includes: growth and activity. Bloomberg New Energy Finance has estimated that the 1. Accelerating deployment of renewable Australian renewable energy industry energy generation in Victoria; will attract around $14.7 billion of investment by 2020. 2. Initiating state actions to drive down carbon emissions across all industry This Roadmap is one of the elements sectors, supported by an independent underpinning the Government’s review of the Climate Change Act economic agenda and its commitment 2010 and investigation of a state to grow jobs through the Back to Work emissions reduction target; Jobs Plan. The Plan has identified 3. Driving the state’s transition to an the new energy technology sector energy efficient and productive as one of six priority industry sectors economy; and where significant economic growth can be achieved through the value 4. Developing a New Energy chain. A Future Industries Fund Technologies Strategy. has been established to help grow Victoria’s comparative advantages 1.3. Re-establishing Victoria as a and to support initiatives arising leader in renewable energy from the strategies developed. The Victorian Government aspires to A New Energy Jobs Fund of re-establish the state as a global leader $20 million has been established in renewable energy development, as part of this broader initiative. and to be seen internationally as Supporting consumers, businesses an example of best practice in and communities to invest in supporting renewable energy. renewable energy In recent years, Victoria has lost its Renewable energy has an important reputation as a national and global role to play in supporting consumers leader in support of renewable energy. to take action to reduce their energy bills. 6 Victoria’s Renewable Energy Roadmap

Recent years have seen a significant Therefore, the Victorian Government will take-up of solar PV systems at a play a critical role in promoting the growth household, small business and of renewable energy in this state by: commercial level, with over 245,000 systems now installed across the state • restoring Victoria’s position as with a total generation capacity over a supportive environment to do 700 megawatts (MW). Consumers and business in the renewable energy businesses generating their own power and new energy technology sector; locally have benefited with bill reductions • reforming Victorian policies from feed-in tariffs for energy exports and regulation, including wind to the grid, as well as avoiding paying farm planning rules and rules for grid-supplied power during times affecting distributed generation; their systems are generating power. • supporting large-scale renewable The broader market has also benefited, energy projects through multiple with distributed generation dampening funding sources, including demand periods during the day. leveraging off state and national The Government supports the growth funding streams, such as ARENA; of distributed generation systems at a • supporting community efforts to local level. In particular, this Roadmap develop renewable energy projects; includes initiatives to make it easier for and consumers previously unable to invest • introducing Victorian programs, in solar PV – such as rental tenants and facilitating inter-jurisdictional low income households who cannot cooperation, and advocating afford the upfront cost of PV systems to the Federal Government on – to share in the benefits which local renewable energy policy. generation provides. 1.4. A Roadmap for renewable In addition, the Government will actively energy in Victoria support the development of pioneering community renewable energy projects, This Roadmap defines the actions where the benefits of distributed the Victorian Government will take to generation are shared at a community accelerate renewable energy generation level. Two such projects, at Newstead and promote sustainable jobs in Victoria. and Woodend, have already been These objectives require concerted awarded funding in 2015 to develop action by the Victorian Government community-led solar generation projects. across four priority areas:

Action required at a state level 1. Transformation in the wholesale electricity market toward renewable Growing renewable energy requires energy. action from all levels of government. 2. Reducing barriers to continued The Victorian Government recognises development of distributed the importance of its role to achieve generation and energy storage. growth in renewable energy. 3. Encouraging household and community development of While policy measures overseen by renewable generation, products the Federal Government are important, and services. such as the Federal Renewable Energy Target (RET), the Clean Energy Finance 4. Government support for renewable Corporation (CEFC) and the Australian energy development, with a focus Renewable Energy Agency (ARENA); on job creation in Victoria. state and territory governments need to establish tangible programs and mechanisms to ensure a broad suite of effective outcomes are achieved. August 2015 7

The steps outlined in this Roadmap So while our targets will be one way range from actions we are implementing to measure our success, securing right now, to important issues that will existing jobs and growing employment require extensive policy development overall in the renewable energy industry and consultation. is a key aim.

The process for decision making Additionally, renewable energy policies on many issues will occur during implemented through the Roadmap will 2015, with outcomes identified in help to contribute to the Government’s the Renewable Energy Action Plan commitment to consider an achievable (Action Plan). The actions outlined in the emissions reductions target for Victoria. Action Plan will be effective and practical The Government is currently reviewing and take into account the costs and legislation and programs that will inform benefits of action for the Government, the emissions reductions target. industry and the Victorian community. 1.6. Public consultation 1.5. How success will While the Victorian Government is in be measured the process of implementing many of The Victorian Government believes the initiatives outlined in this Roadmap, targets are critical for ensuring you are invited to provide feedback growth in renewable energy generation. on the Roadmap and the direction Therefore, as part of the Action Plan, proposed for Victorian renewable the Victorian Government will establish energy policy. two targets for renewable energy generation in this state, including You will be able to provide your input for 2020 and 2025. The Government through Government hosted public aims to produce at least 20 per cent forums and via written submission. of the state’s electricity generation Further information on the process from renewable sources by 2020. and how to get involved is available at The Government is asking for community www.energyandresources.vic.gov.au. feedback on what the 2020 and 2025 targets should be, as part of broad The Government is interested in public consultation on this Roadmap. feedback on:

Increasing deployment in renewable • the objectives and priorities of energy is not an end in itself. Growing renewable energy policy outlined the share of renewable energy in Victoria in this Roadmap; is a key part of the Government’s • the actions and initiatives identified strategy to create jobs, particularly in as priorities; and rural and regional Victoria and with a • whether there are other actions focus on addressing the reduction in that should be considered in employment occurring in areas such as supporting renewable energy automotive manufacturing. Renewable development in Victoria. energy projects offer opportunities for job creation in a range of fields and skill The feedback obtained from the public types. A steady pipeline of projects will consultation process will be considered also encourage greater development of in the development of the Action Plan. local supply chains in components and professional services.

You are invited to provide feedback on the Roadmap and the direction proposed for Victorian renewable energy policy. 8 Victoria’s Renewable Energy Roadmap

2. Renewable energy in Victoria today

Renewable energy in Victoria has increased substantially in recent years, growing from 6 per cent in 2009 to 12 per cent in 2014. Over that period, Victoria’s total installed renewable generation capacity grew by 50 per cent, rising from 2817 MW to 4221 MW.

Renewable energy growth has While Victoria has good resources been driven by a number of factors, for , these have including the expansion of the already been largely developed prior Federal Government’s RET in to the RET, meaning recent growth 2011, and initiatives adopted by the has been low. A smaller number of previous state Labor governments large-scale solar farms (both PV and (see Figure 1). It is also attributable concentrating PV) have also been to the importance the community commissioned in recent years. assigns to renewable energy. In a 2014 survey conducted by JWS Research Victoria has a comparative advantage for the Climate Institute, 70 per cent in bioenergy as it has a diverse range of respondents supported a renewable of secure and stable supplies of energy target of 20 per cent or more biomass feedstock available which by 2020. are capable of being readily utilised for energy production. A range of Falling technology costs and easier bioenergy generators currently operate installation processes, particularly for in Victoria, using fuel sources such as solar PV, are also assisting Victorians agriculture, urban and industrial waste. to transition to cleaner energy sources. These generators range from micro- At the end of 2014, there were 246,597 scale at locations such as small farms small-scale solar PV units installed in to large-scale at industrial facilities. Victoria with a combined generation capacity of over 720 MW. Other sources of renewable energy, such as wave, are the subject of In addition to rooftop solar, Victoria has Victorian pilot or demonstration established, high-quality renewable projects that are either completed resources for large-scale production of or in development. power. This includes wind, hydro, solar and bioenergy. Victoria’s manufacturing sector also contributes to the renewable energy Victoria’s wind resource is one supply chain through the manufacture of our competitive advantages. of products such as: The relative maturity and low cost of technology has also • solar hot water systems; led to wind farms being the dominant • wind towers; and source of large-scale generation • components for solar PV projects technology growth in Victoria, and small-scale wind turbines. with over 1,000 MW of generation capacity installed (see Table 1). August 2015 9

FIGURE 1: Electricity generation mix in Victoria, 2014

84% BROWN COAL

4% GAS

3% HYDROELECTRICITY

5% WIND

2% SOLAR

2% BIOENERGY

TABLE 1: Main non-hydro renewable energy plants in Victoria, 2014

NAME CAPACITY (MW) TECHNOLOGY 420 Wind 192 Wind Mt Mercer wind farm 131.2 Wind Oaklands Hill wind farm 67.2 Wind Cape Bridgewater wind farm 58 Wind Maryvale paper mill 54.5 Bioenergy * Challicum Hills wind farm 52.5 Wind Cape Nelson South wind farm 44 Wind Yambuk wind farm 30 Wind 21 Wind Mortons Lane wind farm 19.5 Wind 18.2 Wind Clayton landfill 12 Bioenergy ** 12 Wind Werribee sewage treatment plant 10 Bioenergy *** Carrum Downs sewage treatment plant 9.1 Bioenergy *** Hallam Road renewable energy facility 8.9 Bioenergy ** Wollert renewable energy facility 6.7 Bioenergy ** Broadmeadows landfill 6.2 Bioenergy ** Berwick landfill 4.6 Bioenergy ** Springvale landfill 4.2 Bioenergy ** Leonards Hill wind farm 4.1 Wind Solar Park 1 – Koorlong 3.2 Solar Coolaroo clean energy plant 3 Bioenergy **** Brooklyn landfill 2.8 Bioenergy ** Wyndham renewable energy facility 1.9 Bioenergy ** Mildura solar – Carwarp 1.5 Solar

Note: Bioenergy * = pulpwood waste; ** = landfill methane; *** = sewage methane; **** = other bioenergy. 10 Victoria’s Renewable Energy Roadmap

According to the Clean Energy Council, there are over 4000 people employed in the Victorian renewable energy industry. These jobs are driven by the small- scale solar PV and large-scale wind industries. However, the renewable energy workforce also extends to the solar hot water, marine energy and battery storage industries.

The potential pipeline for renewable energy projects in Victoria is strong. There are currently 18 wind farms across the state, with a combined generation capacity of approximately 2,500 MW, with planning approval that could quickly commence. The Government will act to improve the investment environment, in order to realise this potential. August 2015 11

3. Transforming Victoria’s generation stock towards renewable energy

Priority Area – Transforming the generation stock in the wholesale electricity market towards renewable energy

The investment environment for Bloomberg New Energy Finance renewable energy projects in the recently reported that renewable energy National Electricity Market (NEM) investment in Australia has fallen is currently uncertain, largely due 90 per cent in the 12 months to March to policy failure at the Federal level. 2015. Annual investment has fallen from $2 billion in 2013 to $238 million The policy framework of a strong in 2014, and just $6.6 million in the national RET was established to provide first quarter of 2015. commercial incentives for investment in new renewable generation. Action is needed to advocate for strong policy leadership at the Federal level, In the past few years we have seen and to implement appropriate policies in the erosion of this policy framework Victoria to change the mix of generation for achieving renewable energy in the wholesale electricity market. transformation across the NEM, including reducing the RET from 3.1. Advocate for strong Federal 41,000 gigawatt hours to 33,000 Government policy on gigawatt hours by 2020. renewable energy The result has been an inability for large- The Victorian Government will advocate scale renewable energy proponents for strong, forward-looking outcomes to finance renewable investment and to Federal renewable energy policies. no incentive for emissions-intensive The current Federal Government’s generation, which is faced with review and reduction of the RET has barriers to market exit, to shut down. led to a major decline in investment in renewable energy since 2013. This situation, coupled with decreased demand for electricity, has resulted In 2015, the Victorian Government in large overcapacity in the NEM, has, and will continue to, advocate further reducing the commerciality of to the Federal Government for: investment in renewable energy, and entrenching the current generation mix. • an overall RET outcome which facilitates job growth and provides certainty for the renewable energy industry; and • other national policy and regulatory processes which drive the renewable energy sector. 12 Victoria’s Renewable Energy Roadmap

3.2. Reform of Victoria’s wind The Victorian Government will farm planning laws also examine whether there are other anomalies in relevant regulations or The Victorian Government has guidelines. Also the transmission or recently reformed Victoria’s wind farm distribution of power lines to connect planning laws to encourage greater the wind farm to the electricity investment in Victoria’s strong wind network can now be considered resource. Planning controls have been holistically as part of the wind farm changed to reduce the distance from planning proposal. two kilometres to within one kilometre in which a landowner’s consent is 3.3. Using Government energy required to make an application for a purchasing to support turbine nearby a dwelling, and primary responsibility for wind farm planning renewables approvals has been returned to the The Victorian Government is a Minister for Planning. large user of electricity. Therefore, the Victorian Government will use We have also committed to assess how its electricity purchasing power to to address community-owned wind promote investment and jobs growth generation facilities in the planning in the renewable energy industry. system. A community discussion paper will be released later in 2015 for consultation. August 2015 13

3.4. Review policy options Policy options to support renewables will to transition generation focus on supporting the Government’s stock in Victoria targets for renewable energy generation. These measures will be informed by The Victorian Government will other policy settings, including the undertake a review of suitable operation of RET schemes. policy options to transition Victoria’s wholesale generation stock to The actions outlined through this review renewable energy (such as large- will be effective and practical and take scale solar and wind energy). into account the costs and benefits of action for the Government, industry Suitable policies developed by and the Victorian community. this work may be advocated for at the Federal level, be the subject of potential inter-governmental cooperation across states and territories, or be directly implemented by Victoria.

The Victorian Government has recently reformed Victoria’s wind farm planning laws to encourage greater investment in Victoria’s strong wind resources. 14 Victoria’s Renewable Energy Roadmap

4. Addressing barriers to distributed generation and storage

Priority Area – Addressing barriers to distributed generation and energy storage

The development of renewable energy Furthermore, the current regulatory generation is no longer just about what framework prevents the development of happens at a large-scale in the NEM. innovative distributed generation projects Strategies to encourage the transition to and business models, including new renewable energy need to increasingly innovative models which enable the focus on the policy and regulatory benefits of distributed generation to frameworks governing distributed be shared with rental tenants and generation and energy storage. low-income households.

Distributed generation refers to Added to this, is the potential for electricity which is generated locally widespread uptake of energy storage and fed back into the electricity technologies within the next few years. distribution network. These Storage technologies will provide technologies range from household customers with distributed generation solar PV, right up to community wind the flexibility as to when their power farms and commercial-scale solar and is stored and used, with potentially bioenergy facilities. significant benefits in reducing reliance on the grid and therefore Distributed generation has expanded reducing overall energy costs for greatly in recent years, particularly as those customers. Energy storage is the cost of solar PV technology (the an emerging market, with significant most common form of distributed potential for growth and creation of local generation) has fallen. business opportunities and skilled jobs.

While distributed generation has There are also emerging market increased significantly in Victoria, opportunities for the use of heating/ there are still a number of issues cooling pumps and geothermal heat affecting its development. The process source applications. Further, new for connection of distributed generation business models, such as virtual to the grid is not transparent, consistent net metering, should be explored. or customer-friendly. A number of actions are required to address these issues to ensure the potential for investment in distributed generation and energy storage is met.

Energy storage is an emerging market, with significant potential for growth and creation of local business opportunities and skilled jobs. August 2015 15

4.1. Improving connection Customers seeking to connect processes for distributed distributed generation in constrained generation areas are increasingly being required to either: Initiative 1 – Improved process for distributed generation connections • reduce the size of their proposed The existing Victorian arrangements distributed generation system; for connecting distributed generation • pay for a local network upgrade to the network are overly complex and to alleviate the constraint; or lack transparency. To address this • use special equipment at point of issue, the Government is considering connection (such as smart inverters) options to improve the connection to limit the export of distributed process for distributed generators. generators at certain times.

The objective of these changes will be The Government has commenced to streamline connection processes by a review to investigate the technical providing greater clarity of connection constraints which limit the connection requirements, clearer timeframes for of small to medium-scale distributed connection, and improved processes generation to the Victorian network and for dispute resolution. identify possible technical solutions to address the issues. Initiative 2 – Investigate technical grid constraints impacting on 4.2. Removing barriers to distributed generation innovative projects and Increasingly, customers seeking to business models connect distributed generation are unable to do so due to technical Initiative 1 – Address barriers to constraints on the grid at the point of precinct-scale distributed generation connection. This impediment appears Precinct-scale distributed generation to be most common in rural areas, refers to projects that intend to sell/ where connection of distributed supply electricity (and in some cases generation may exceed technical heating and cooling) across multiple limits of the local network. land title boundaries or public land. 16 Victoria’s Renewable Energy Roadmap

These projects tend to involve One of these business models is the generation of electricity a solar power purchase agreement using renewable and low-emission (PPA), which enables customers to technologies, such as solar PV, access solar panels through a leasing co-generation or tri-generation arrangement with the solar PV provider, facilities. On-selling electricity allowing these customers to access generated at one premises to another the benefits of distributed generation increases the financial viability of without the upfront capital cost. these renewable and low-emission distributed generation projects. The authorising framework and availability of exemptions from retail There are a number of potential barriers licensing requirements for emerging specifically affecting precinct-scale innovative business models (such as distributed generation, namely: solar PPAs) in Victoria is currently unclear.

• an inability to gain easy connection To address this issue, the Government to the electricity network; is reviewing the current process for • issues with obtaining planning gaining an exemption from retail permits to construct local licensing, to ensure that new innovative infrastructure networks; business models are not being unfairly restricted. The review will ensure that • difficulty in on-selling the electricity Victoria remains an attractive place due to a complex electricity to do business for innovative energy licencing framework; and business models and that Victorian • an inability to provide district heating consumers are appropriately protected. and cooling services to customers. Initiative 3 – Investigating The Government will investigate the new distributed generation extent to which these and other barriers business models are impeding investment in precinct- The Victorian Government will scale distributed generation and investigate the viability of models consider regulatory reform options to employed at a local and state address any material barriers identified. level, both around Australia and The Victorian Government will also internationally, in supporting innovative consider appropriate mechanisms to purchasing and leasing arrangements support innovative financing models for for distributed generation. communities and proponents seeking This includes consideration of rates- funds to establish viable renewable based schemes employed by local energy projects. As part of this work government, other financing and program, we will also establish a contracting models (such as South framework which can assist these Australia’s three-way contracting proponents to leverage off existing model to support public housing funding streams. tenants investing in solar PV), Initiative 2 – Enable solar purchase and innovative ideas such as a agreements in Victoria ‘roof register’ matching potential solar investors with parties with available roof New solar business models are being space to accommodate PV systems on developed that enable customers who behalf of investors. The investigation may not otherwise be in a position to will also look at overcoming barriers invest in solar panels the ability to access to use of solar on strata title buildings the benefits of distributed generation. (such as apartment blocks). These customers include businesses, renters or low-income households. August 2015 17

Consideration will also be given Storage technologies should to emerging new markets, such therefore be seen as a significant as heating markets, and actions enabling technology to improve the the Government can undertake to commerciality and attractiveness support their development. of distributed renewable energy generation and to enable the Initiative 4 – Legislate to allow for deployment of electric vehicles. Environmental Upgrade Agreements Such technology also provides Environmental Upgrade Agreements significant business opportunities (EUAs) are a council-based financing for the Victorian economy, from the mechanism that allows owners of potential manufacture and sale of existing non-residential buildings to storage technology to the development undertake environmental upgrades, of businesses to provide services to including energy efficiency and customers enabled by energy storage – renewable energy retrofits, with such as energy management services. repayments recovered through local council rates. The is However, an industry requires a currently the only Victorian council that transparent and comprehensive can enact EUAs. regulatory framework to provide the certainty and confidence to develop The Victorian Government will enact effectively. There is currently a gap in legislative changes to ensure that all local both the national and Victorian policy governments can provide EUAs. This will and regulatory frameworks in terms of potentially facilitate millions of dollars in how storage technologies should be investment in commercial building energy treated. In particular, there is currently upgrades across the state. no energy storage specific framework in place to control the technical and 4.3. Review of market status safety components of either the storage and regulatory settings technologies or how (and by whom) they are installed, maintained and operated. for energy storage An increased uptake of energy The Government will commence a storage technologies has the review to assess the current state of potential to significantly benefit the energy storage market in Victoria energy consumers, particularly those and the areas where policy and with distributed generation systems regulatory reforms may be warranted. such as solar PV. Households and This review will be a critical first step to businesses with distributed generation facilitate the efficient and safe uptake of and storage devices will be able to energy storage technology in Victoria. choose when to store and when to utilise the power generated onsite in order to maximise value and thereby reduce overall energy costs. 18 Victoria’s Renewable Energy Roadmap August 2015 19

5. Encouraging household and community renewable generation

Priority Area – Encouraging household and community development of renewable generation, products and services

Take-up of distributed generation at the A range of new business models have household and SME level (particularly been developed by communities, which solar PV) continues to be very strong in offer opportunities for the Government Victoria; with an estimated 2,500 new to accelerate the growth of jobs and solar PV systems installed each month. investment in renewable energy. The Government intends to support the continued growth of distributed Communities are working together generation in Victoria by: to drive down the up-front cost of clean energy technologies through • ensuring distributed generators bulk purchase campaigns for solar are receiving fair value for PV and solar hot water, run by local electricity produced; councils or community groups. • ensuring distributed generation Victoria is already home to an innovative, customers are treated fairly by solar community funded, worker-owned PV companies and energy retailers; cooperative that is manufacturing • supporting innovative community and installing solar hot water systems. driven approaches to increasing Further, we are now supporting local local jobs and investment in communities, such as Newstead and renewable energy; and Woodend, to integrate renewable • considering mechanisms to assist energy into their energy needs. low-income households to utilise cleaner energy products, such as In , there are plans solar hot water. for Australia’s first community owned electricity retailer, which would have At a community level, public support a focus on supporting renewable for renewable energy is strong and energy projects. many communities want to develop projects of their own. Such projects However, communities often lack can provide a wide range of benefits knowledge about how to go about for communities, from direct financial project development and are not returns from investment in renewable provided with sufficient support to energy, to broader benefits from ensure success. supporting community sustainability action and encouraging eco-tourism. The Government will establish programs and processes to assist communities to develop their projects. 20 Victoria’s Renewable Energy Roadmap

5.1. Provide support for 5.2. Ensure fair compensation pioneering community for distributed generation energy projects Distributed generation can provide The Government will actively support important benefits to the energy supply the development of community chain. Where distributed generation renewable energy projects. is used in a constrained area of the network, it has the potential to defer The Government has already the need for costly network upgrades. committed to provide clean energy This potential benefit of distributed grants to two pioneering community generation is often referred to as energy projects. Newstead 2021, network value. It is important that a community group in central any such network value provided by Victoria, has been awarded $200,000 distributed generation is sufficiently in funding to develop a master plan captured and remunerated. for transitioning the town of Newstead to 100 per cent renewable energy. Victoria also currently has a number The Macedon Ranges Sustainability of regulated feed-in tariffs (FiTs) which Group has been awarded $100,000 provide households, businesses and to build a solar farm at the Black community organisations producing Forest Timber Mill in Woodend. their own renewable energy with a financial return for the excess Lessons learned from the delivery power they feed into the grid. of these projects will be shared with other community groups so that the full The current tariff rates available benefits of this funding are captured. to new solar customers are based on the wholesale price of electricity, To provide support for communities who broadly reflecting the price at which are interested in developing their own electricity retailers purchase power projects, the Victorian Government will from generators through the NEM. prepare a how-to guide for developing community renewable energy projects To ensure distributed generation in Victoria. It will do this by: customers are being fairly compensated for the value their • engaging stakeholders about systems provide, the Government will what information community energy ask the Essential Services Commission projects need to succeed in Victoria; (ESC) to undertake an inquiry into the • creating a Community-Owned true value of distributed generation Renewable Energy How-to Guide to Victorian consumers. This work for current Victorian conditions; will review whether current policy publishing the guide electronically, and regulatory frameworks in Victoria and promoting it via stakeholders adequately remunerate distributed and at relevant industry events; and generation for the full value it provides, including whether the current objectives • providing financial support through of FiT policy in Victoria are appropriate. the New Energy Jobs Fund.

Public support for renewable energy is strong and many communities want to develop projects of their own. The Government will actively support this. August 2015 21

5.3. Ensure fair treatment of Initiative 2 – Promote solar PV retailer distributed generation code of conduct customers The Clean Energy Council (CEC) Initiative 1 – Prevent unfair has developed a Solar PV Retailer discrimination of solar customers Code of Conduct (the Code) to by energy retailers support good practice in the solar PV retail industry. The Code is a The Government is aware that some voluntary code, authorised by the energy retailers are setting higher fixed Australian Competition and Consumer supply charges for solar customers as Commission. Signatories to the Code compared to non-solar customers. have been subjected to a rigorous screening process, are required to To address this issue, the Government apply for renewal annually, and may will undertake action to ensure solar be audited for compliance. customers are not discriminated against by energy retailers. The Code imposes additional requirements on approved solar PV This will occur as part of the retailers, such as extended whole-of- strengthening of energy consumer system warranties and regulated sales protection arrangements currently being activities. The procuring bodies also progressed by the Victorian Government benefit significantly by having a robust through legislative amendments. standards program to rely upon.

The Victorian Government will ensure any Government programs that support solar PV will require the solar panel provider to be a signatory to the Code. This will in turn protect the integrity of the program and the interaction with the consumer. 22 Victoria’s Renewable Energy Roadmap

6. Government role in facilitating the uptake of renewable energy

Priority Area – Government supporting renewable energy development, with a focus on job creation in Victoria

In addition to ensuring policy The Victorian Government embraces and regulatory frameworks are this change. These technologies supporting investment in renewable can drive greater efficiency and energy, Government has an important effectiveness in the market. role in funding support, information They can enhance consumer welfare, provision, project facilitation, and by providing greater options for how promotion of Victoria’s renewable Victorian businesses and households energy industry. engage in the energy market. It can also deliver reduced greenhouse gas It is important that support emissions, by enabling renewable and information is provided to energy sources to be utilised renewable energy proponents more effectively. throughout the project development process. The Government will Policies which facilitate new energy provide comprehensive information technologies into the Victorian energy resources and facilitation support to market can deliver jobs growth for guide renewable energy projects to the state. The Victorian Government completion and take action to promote recognises this opportunity, and will Victoria’s renewable energy industry. develop a New Energy Technologies Strategy to support the development 6.1. Promoting new energy of this sector in Victoria. This strategy jobs and technologies will work alongside the New Energy Jobs Fund. The energy market is transforming rapidly. The traditional delivery model The New Energy Jobs Fund is of electricity is being disrupted by new a $20 million funding package, technologies and sources of supply. focused on providing targeted In our energy market, companies, financial support to businesses, businesses and families are starting research institutes or communities to to trial or adopt new approaches for facilitate their development or uptake producing and using energy, including of new energy technology. Eligibility for combining solar panels with inverters funding and processes for applying will and battery storage units. be determined this year in consultation with key industry and community representatives.

The $20 million New Energy Jobs Fund will support organisations and communities to take up new energy technologies. August 2015 23

6.2. Providing information 6.3. Renewable energy to support renewable project facilitation energy uptake Initiative 1 – Reinstate co-ordinated Initiative 1 – Develop industry renewable energy project facilitation development plans The Victorian Government will reinstate The Government will develop its role to facilitate renewable energy industry development plans to projects in the state. This will involve support the growth of sectors such the establishment of a whole-of- as bioenergy and marine energy. Victorian-Government facilitation The objectives of these plans are to: service, including:

• assess the potential future share • joined-up arrangements for access of these, and other, new energy to preliminary agency advice; technologies in the energy mix; • agreed time schedules for • identify key barriers to the application and approval processes; development of these new energy • timely guidance on project issues, sectors; and assessment requirements and • set out a framework and actions draft responses; for accelerating the uptake of the • advice on stakeholder consultation; identified technologies. and Initiative 2 – Update renewable • assistance in addressing energy project and resource maps infrastructure connection requirements. Updating Victoria’s renewable energy project and resource mapping will Initiative 2 – Investigate new aid the promotion of Victoria as a models for renewable energy destination for renewable energy project facilitation investment and better equip renewable In addition to taking immediate action energy project developers to undertake to enhance renewable energy project project planning activities. facilitation using the Government’s The Victorian Government will work existing support structures, the with national agencies to ensure that Victorian Government will investigate existing renewable energy project new measures to facilitate renewable and resource mapping services are energy projects in Victoria. updated to provide information on One possible measure is the large-scale wind and solar projects appointment of an independent and resources. The Government is also Renewable Energy Advocate for participating in the Australian Biomass Victoria, as exists in New South Wales. for Bioenergy Assessment project, The Renewable Energy Advocate would funded by ARENA. The project aims promote Victoria as a destination for to catalyse investment in the renewable renewable energy projects and liaise energy sector by providing detailed with project developers, financiers and information about biomass resources Government to aid the development of across Australia. This will assist in renewable energy projects in Victoria. project development and decision making for new bioenergy projects. 24 Victoria’s Renewable Energy Roadmap

7. Next steps

Victoria’s Renewable Energy Roadmap commences a community discussion on the future of renewable energy in this state, with a focus on the economic benefits which may be derived from this Roadmap, such as jobs growth. Through this document, the Victorian Government has identified projects which it has commenced work on, and foreshadowed potential outputs of the Action Plan, including renewable energy generation targets.

Over the next few months, the Government invites you to take part in the public consultation process on this Roadmap. Consultation will help inform the Action Plan to ensure it delivers tangible and effective short, medium and long term outcomes for renewable energy in Victoria.

You will be able to provide your input through Government-hosted public forums and via written submission. Further information on the process and how to get involved is available at www.energyandresources.vic.gov.au. August 2015 25 Authorised and published by the Victorian Government, 1 Treasury Place, Melbourne DEDJTR9057/15