Octopus Investments Aust Pty Ltd Como Centre, 644 Chapel St South Yarra, Melbourne, VIC 3141 T: +61 (0) 3 8376 2222 E: [email protected] W: octopusinvestments.com.au

30 March 2021

Mr John Bradley Secretary Department of Environment, Land, Water and Planning Submitted via email: [email protected]

Dear Mr Bradley

RE: Response to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

Octopus Investments welcomes the opportunity to provide a submission in response to the Victorian REZ Development Plan Directions Paper (Directions Paper).

The Directions Paper provides a positive framework of actions needed to support the timely delivery of a further 10GW of renewable energy capacity across .

Our submission focuses on the Gippsland REZ as a ‘no regrets’ project, which we propose can be delivered earlier than the timeframe indicated in the Directions Paper. The project would require minimal government support and has already gained support from local communities and industry.

Gippsland REZ is a clear frontrunner and, should be prioritised in Stage 1 of the Directions Paper and supported through Government regulatory frameworks.

Its delivery will support a number of Victorian Government key objectives, including:

 Unlocking high renewable generating capacity (3-5GW) to address energy reliability for Victorians by replacing energy shortfalls in a time critical phase during ’s closure (2025- 2028) and further potential reliability risks from earlier closures of other fired power stations  Providing diversity of renewable energy supply from western Victoria and reliability benefits for Victorian electricity consumers  Improving affordability outcomes for electricity consumers, with a low transmission build cost (circa $500m1)  Reducing annual wholesale electricity prices by an estimated $885 million2  Delivering broader economic and sustainability benefits to support other Victorian Government goals, notably job growth in the Gippsland region and net zero emissions targets.

Our submission to prioritise the Gippsland REZ in Stage 1 of the Directions Paper presents an opportunity to bring forward more than 1.5GWh in renewable energy projects being developed by Octopus Investments in the Gippsland Region to support more timely and efficient development of Victoria’s REZs.

1 Ernst & Young, 2021, Gippsland Renewable Energy Zone – Economic Analysis for AusNet Services 2 Ernst & Young, 2021, Gippsland Renewable Energy Zone – Economic Analysis for AusNet Services

Octopus Investments Aust Pty Ltd (ABN: 17 626 662 039). Registered Office: Como Centre, 644 Chapel St, South Yarra, Melbourne, VIC 3141. Australian Financial Services Licence No: 520121

This action will cement the Gippsland region’s strong history as an electricity powerhouse for Victoria, which is further supported by the following factors:

 Gippsland REZ can be activated promptly with an expedited delivery of the first phase of new generation. Octopus Investments is already well progressed in the development and financing of a suite of three renewable projects, known as the Gippsland Renewable Energy Park (GREP), made up of circa 1.5GW including solar, wind, battery and green hydrogen. We have been collaborating with AusNet Services and other well-known renewable energy developers in the region to ensure the Gippsland REZ is fit for purpose from the outset and to ensure industry is working collaboratively to maintain social licence and deliver local benefits.

 The Gippsland REZ will provide significant broader economic benefits to the region. The project will contribute to the replacement of direct and indirect jobs being lost through the closure of the Yallourn Power Station. The GREP project alone will create an estimated 1,200 jobs through the initial construction period to deliver various stages of the park, and more than 200 full-time, high value jobs on site. Solis Renewable Energy, our development partner, is already leading the development of skills capacity within the Gippsland region through the proposed Australian Renewables Academy. This capacity will support the utility sector remaining within the top five gross value add sectors for the Gippsland region. It will also provide job opportunities for other local industries in transition, such as the timber sector. Economic modelling commissioned by AusNet Services shows the Gippsland REZ will create over 2,200 jobs3 on a broader scale.

 Community engagement is central to our operating framework. Our projects are embedded in regional communities and we work to ensure we make ongoing long-term, positive contributions to the community. Our Darlington Point Solar Farm project is the largest solar farm currently connected to the National Electricity Market and is located in a small rural community in the Murrumbidgee shire of western NSW. We engaged with councils, community groups and individuals to hear their views and ideas. We incorporated their feedback into our development plan and applied the principles of ‘considerate construction’ at all times. This experience is being applied to the Gippsland Renewable Energy Project.

 From our experience to date, introducing renewable energy projects to Gippsland has been met with overwhelming support from local landholders, local councils and industry groups, such as the Committee for Gippsland and the Wellington Shire Council. Further positive community support is anticipated with the establishment of a REZ, which will significantly open up the region to new projects, infrastructure and jobs.

 De-risking development is as critical for investors as it is for government in seeking timely delivery of new generation sources to meet household and business electricity needs. Our work planning includes and prioritises engagement with the community and considers minimising land use and environmental impacts, targeting low grade agricultural land. Wellington Shire Council has noted the first stage of the project is consistent with existing land use planning policies in the region.

To support the prompt delivery of new renewable energy capacity, any changes to governance arrangements as part of the actions in the Directions Paper should not result in delays to existing projects or increased complexity.

3 Ernst & Young, 2021, Gippsland Renewable Energy Zone – Economic Analysis for AusNet Services 2 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

The activation and implementation of the new provisions (Part 3, Division 7) of the National Electricity Victoria Act 2005 should be applied to new transmission infrastructure in the Gippsland REZ so timeframes can be met. It is the cheapest way to build new transmission infrastructure and support low-cost renewables, which ultimately help to keep power prices down for Victorian consumers.

We have enclosed further details on the points raised above and we would be pleased to present our analysis undertaken to determine the benefits of the Gippsland REZ and progress on project development. To arrange this presentation or for further information, please contact Dennis Freedman, Head of Investment and Development, Octopus Investments on 0439 856 303 or [email protected].

Thank you for the opportunity to provide this submission. We look forward to continuing our work with the community and Victorian Government to support the delivery of the Gippsland REZ.

Yours sincerely, Dennis Freedman

Dennis Freedman

Head of Investments and Development

Octopus Investments

3 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

1 Submission Overview

Victorian Government action to support Renewable Energy Zone (REZ) development will underpin the timely delivery of renewable energy projects. For consumers, this will reduce bills and improve reliability. For local communities, this will provide jobs, opportunities for local businesses and support for improved community services. For renewable energy investors, this will provide clarity around where to invest and the rules around investment.

The Gippsland REZ likely involves the construction of a new circa 65-kilometre transmission line to connect renewable generators in the Gippsland region to the . Due to its strong existing infrastructure, diverse energy resources and relatively low build costs, it presents the greatest value when compared to other identified REZs and has the potential to unlock an additional 3GW -5GW of renewable energy in an unconstrained part of the network.

Octopus Investments recommends the Gippsland REZ be recognised as a priority project and reclassified as a Stage 1 project in the Victorian REZ Development Plan Directions Paper (Directions Paper) commencing as soon as practicable with a delivery timeframe of 3 years once all approvals granted. In addition, we recommend:

 The delivery risk of Gippsland REZ is reclassified as medium;  Gippsland REZ is progressed through the National Electricity VIC Act 2005 (NEVA) amendments announced in 2020 to trigger the transmission line to go ahead and bring the timelines forward;  Access to the Gippsland REZ is in accordance with standard National Electricity Market access rules rather than entertaining bespoke arrangements (such as firm access regimes that industry has consistently rejected), which bring additional complexity, slow down investment decisions, increase risk premiums and therefore ultimately lead to higher electricity prices for Victorian consumers.

To unlock these opportunities, it’s important to provide clarity of direction and streamlined regulatory processes for new transmission and generation projects to be realised. This will provide investors with clarity about priorities and still enable communities to provide input and feedback on projects as they develop.

Further details on each of our recommendations and other supporting material for this submission is provided below.

4 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

2 Reclassify to Stage 1 Project

Assessments by Octopus Investments, AusNet Services and other reputable renewable developers have confirmed the Gippsland REZ is feasible and can be delivered promptly, with the first phase commencing as soon as practicable with a delivery timeframe of 3 years once all approvals granted. Initially, it will provide access to solar and storage capacity, while introducing a mix of renewable supply sources over the medium term, including wind, solar, battery, and hydrogen to deliver a potential 7270GWh increase in electricity supply.

Octopus Investments proposes the Gippsland REZ should be included as a Stage 1 immediate priority project in the Directions Paper. The following table summarises how the Gippsland REZ delivers against the criteria for Stage 1 projects.

Criteria Gippsland REZ performance against criteria Delivered by 2025 Both transmission and generation projects can be accelerated.

Teams in place at Ausnet Services and several renewable developers are working collaboratively to complete development of the Gippsland REZ. This joint approach means the Gippsland REZ is fit for purpose from the start. The project can maximise the benefits of transmission investment by looking at the Gippsland REZ needs in totality rather than piecemeal development, which would occur if generation developers approached AusNet Services on an individual basis.

Given the early announcement that Yallourn W Power Station will be fully closed by 2028 but with units closing sooner, Octopus Investments recommends that prioritising The Gippsland REZ project is critical. Address a present or Energy Reliability projected need The project will provide access to hosting capacity on a strong and unconstrained part of the network, from the Latrobe Valley to Melbourne. Therefore, it will not create risks to technical grid operations within the transmission network, unlike the large challenges faced in the western part of the State

Reliability – meeting electricity demand needs now and into the future Gippsland REZ can meet the increased need for resources to contribute to reliability targets. Importantly, the Gippsland REZ renewable resources will complement developments in Western Victoria and South Western Victoria REZs.

Furthermore, the transmission lines from the Latrobe Valley to Melbourne exist in multiple circuits and are on diverse paths. This greatly decreases the risk of catastrophic outages leading to reliability

5 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

and black out issues in Victoria, as compared with developments in western Victoria.

This need for additional renewable generation and consequent transmission investment has arisen since the release of AEMO’s 2020 Integrated System Plan due to:

 Yallourn early retirement, which requires an additional 1GW or market based dispatchable resources.4  Recognition that renewables growth will continue at pace post 2030 as States and Territories have committed to 2050 net zero emissions targets. AEMO has acknowledged transmission network planning needs to consider a scenario with an increased speed of emissions reduction in the electricity sector and consequent ongoing strong growth in renewables.5  Likely development of a large-scale hydrogen industry. Gippsland REZ is a great option for supplying electricity to the emerging hydrogen industry in the Latrobe Valley. It will have low transmission loss factors, and high potential renewables capacity to supply industry at scale. The area proposed for the Gippsland REZ terminal station is also in close proximity to both mains water and gas lines, which are critical for hydrogen production and distribution.

While the Department of Environment, Land, Water and Planning’s focus is on energy policy priorities, notably reliability and affordability of electricity supply, the project will also address priorities under the Department of Jobs, Precincts and Regions portfolios. The broader regional and economic benefits are discussed in a separate section below. These priorities include supporting jobs growth in the Latrobe Valley and bushfire recovery. Provide standalone The project is not dependent on future long-lead time network benefits upgrade plans. It can be progressed immediately through planning and other regulatory approval processes. Can efficiently meet Octopus Investments has commenced engagement with the planning and community. Site selection for the renewable projects has prioritised environmental minimising community, existing land use and environmental impacts. requirements as well as The development of the first stage of our project, the Perry Bridge community expectations Solar Farm, had zero objections. Financial considerations Octopus Investments has secured financial backing for the development stages of its investment in the Gippsland REZ. A commitment from the Victorian Government to bring forward the Gippsland REZ to Phase 1 will provide the necessary signal to allow Octopus Investments and other developers in the region to progress development activity with financial close targets aligned with

4 AEMO (2020) Integrated System Directions Paper, Appendix 6, p.36 5 AEMO (2021) Draft 2021 Inputs, Assumptions and Scenarios Consultation Feedback, slide 12 6 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

Gippsland REZ deployment timeframe of 3 years once all approvals granted. Table – Summary of how Gippsland REZ can be delivered promptly and is mitigating delivery risks

2.1 Supporting a fast-track delivery

Other factors supporting the delivery of the Gippsland REZ by 2025 include:

 Community consultation programs in the Gippsland region have demonstrated a high level of community support for renewables. This is further discussed in Section 3 and supports our recommendation the high-risk delivery rating identified in the Directions Paper needs to be revised.  The region has been identified by the Victorian Government as ideal for the delivery of new overhead network infrastructure during Phase 2 of the Renewable Energy Zones Development Directions Paper, as announced following the 2020-2021 budget.  The Gippsland REZ is not dependent on other transmission projects being completed.  The project takes advantage of the underutilised transmission superhighway from the coal generators to Melbourne.  AusNet has completed the discovery phase of the transmission infrastructure works.

Delivery of the Gippsland REZ as a Stage 1 project will also provide an opportunity to bring forward more than 1.5gWs in renewable energy projects being developed by Octopus Investments in the Gippsland Region to support more timely and efficient development of Victoria’s REZs.

Octopus Investments is developing the Gippsland Renewable Energy Park (GREP), which is aimed to supply 1.5gWs of renewable energy across multiple technologies. The GREP will be delivered in three stages in line with the availability of transmission capacity.

Wellington Shire Council’s submission to the project’s stage one planning approval noted the Project is consistent with current land use planning policies contained within the Wellington Directions Planning Scheme, including advocating for the facilitation and greater use of renewable energy supply and technologies in appropriate locations. It is planned to have stages of the energy park ready for completion as soon as the Gippsland REZ transmission line is commissioned.

7 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

3 Community engagement at the core of our success

Octopus Investments understand how critical it is to work with communities to deliver successful infrastructure projects and deliver long-lasting benefits to the areas in which we work.

We have a demonstrated track record in working with the community and local councils during the life of a project, from the early planning stages through to delivery. To support he delivery of our Darlington Point project, we worked with council and provided our significant global energy and telecommunications expertise to support a number of initiatives including smart water usage, solar panels for community buildings and support for super-fast wi-fi options.

In Gippsland, we have already started engaging with the local community who have demonstrated overwhelming support for the project.

East Gippsland New Energy Technology Roadmap (June 2019) noted that 88% of community respondents to consultation consider the East Gippsland region needs to shift its energy use to renewable sources.

Committee for Gippsland has also identified a transition to a clean energy future as one of its core priorities, and this includes the establishment of a Gippsland REZ, following a thorough review in 2020 and in developing its Strategic Plan 2021-2024.

The Committee for Gippsland has expressed strong support to prioritise the Gippsland project as a stage 1 project with Government support to help facilitate its progression and sees the potential for enabling key infrastructure, encouraging investment, creating new employment opportunities while providing future opportunities for Gippsland to remain the powerhouse energy generating region. The Wellington Shire Council has also undertaken community engagement to support that already delivered by the project. A formal period of community consultation for the Perry Bridge Project was completed between 13 July 2020 and 15 September 2020 by independent consultants ‘Spence Consulting Group’.

The community response was generally positive and ultimately validated by zero objections to the Development Application for the Perry Bridge Solar Farm. In total twelve businesses expressed interest to work on the project and ten enquiries were received about:

 Energy supply opportunities in the local area;  Support for the project and broader dissemination of project details;  Local workforce preparedness and training; and  Project impacts, including traffic, setbacks and visual amenity, noise and energy supply interruptions.

We continue to engage extensively with other councils and community groups6 within the Gippsland region who have expressed overwhelming support and see the opportunity to leverage local expertise, skills and resources, and help to safeguard businesses as the region transitions.

6 Letters of support from the regional councils and community groups are available and can be provided upon request 8 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

3 Better outcomes for communities

Implementing a policy framework and REZ plan that fosters new infrastructure and large-scale energy projects coming into the region will provide a much-needed economic boost and set a strong foundation for further growth, skills and capacity building for future generations.

Work by Ernst & Young for AusNet highlights there are significant direct economic benefits for the Gippsland project from the transmission project alone:

 Investing in the region: $70-million direct investment to the Gippsland economy through construction of supporting infrastructure assets like roads, etc  Building a renewable economy: Unlocks $3.8 billion of investment in renewable projects in the region  Making room for local innovation and jobs: Creating up to 1862 jobs during peak construction period and 380 long term jobs over 25 years from new energy generation projects in Gippsland across all identified projects (not just the Octopus projects)

In addition to the above, the Perry Bridge and Fulham developments will bring an extra $300 million of investment to the Gippsland region. GREP investment is estimated at over $2-billion in total as the phases are built across multiple renewable technologies. As with our investment in Darlington Point, the majority of these funds will be directly injected into the local region, with a firm commitment to engage local contractors, project partners, employees wherever possible.

The Gippsland REZ brings much-needed project certainty to ensure generation development progresses in parallel and economic benefits flow to Gippsland in advance of the Yallourn closure.

This will facilitate employment transition and sustain the communities in that region including:

 jobs in construction and operation;  an active strategy to use and support local businesses both during construction and project operation; and  the establishment of a community benefits fund.

Our team has worked with leading educators including Federation and Deakin Universities and TAFE Gippsland to develop the foundations for the Australian Renewables Academy – ’s only specialised facility to educate the next generation of renewable energy specialists, featuring on-site learning opportunities.

We also draw on our experience from operations in Europe which utilise Smart Specialisation, a place-based economic development approach, underpinning long term regional growth through identification of unique opportunities and comparative advantage. Gippsland is a natural energy hub with existing electricity generation and gas businesses, making it well positioned to support a REZ to transition its existing energy role to a green energy hub with renewable electricity, battery storage and hydrogen.

This is recognised in the following existing Gippsland economic development priorities:

 Southern Gippsland Regional Energy Roadmap [2019], which was funded by the Victorian Government to direct strategy and appropriate investment in renewable energy across all regions of Victoria. For large scale projects in Gippsland this roadmap prioritises building partnerships, building local industry capacity and skills and working with the community. Activities which Octopus Investments is already undertaking in the Gippsland region. 9 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

 Regional Partnerships Gippsland – Gippsland is positioning itself to benefit from its energy transformation to capitalise on new and developing technologies including renewable energy, energy storage, energy efficiency products and services as well low emission products from coal. This includes prioritising support for the Hydrogen Energy Supply Chain and offshore wind farms.  Supporting clean energy for government priority manufacturing sectors notably food manufacturing and paper processing in the Gippsland area.

10 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

4 Need for efficient governance arrangements

The final governance arrangement structure must facilitate prompt project delivery and where possible reduce regulatory complexity. VicGrid’s establishment should not delay delivery of projects such as the Gippsland REZ. This is critical to ensure timely delivery of near-term projects that can underpin a smooth electricity market transition as coal fired generators retire and renewable energy investment ramps up to meet 2050 net zero emissions.

Most importantly, governance arrangements should support delivering better outcomes for end users and the community – reliable and low-cost generation, economic growth and improved community services.

With this in mind, Octopus Investments strongly advocates for Victorian Transmission Planning functions with AEMO be transferred to Ausnet Services. The current planning arrangements were established at a time when grid development was minimal and a steady state environment existed. We now have an agitated market and it is our firm view that Victoria should align its planning functions with that of other jurisdictions. This will result in less bodies involved in the planning and connections processes, lower perceived commercial and timing risk by investors, and ultimately lower prices to Victorian electricity consumers.

The functions of VicGrid need to be carefully considered as anything that splits responsibilities from a single point of accountability should be heavily challenged to explain the value being created.

Governance arrangements around community engagement should recognise industry is embedded in the community for the long term and therefore should lead engagement. Octopus Investments would be interested in discussing the opportunities for collaborative engagement, including with other developers. This collaboration should seek to provide busy communities with ready access to clear information and minimise the burden on them, while providing a clear channel for input.

Octopus Investments would like to engage further with the Victorian Government on what best practice community engagement might look like and would be interested to see what international best practice public sector engagement models the government is considering.

4.1 Expedition of regulatory processes

To ensure timely development of REZs, the governance arrangements through Vic Grid should support prompt activation and implementation of the new provisions (Part 3, Division 7) of the National Electricity Victoria Act 2005 (NEVA). Where Victorian Government determination of a transmission project as a specified augmentation and application of the alternative regulatory investment test can expedite regulatory processes, then this should be prioritised.

The benefits of this approach include:

 A faster path to market for new transmission, unlocking substantial renewable development leading to lower prices, higher reliability and a lower reliance on interconnectors to protect the State’s supply of electricity  Using NEVA minimises the requirement of the Victorian Government to subsidise any new transmission via its $540-million fund as costs for the transmission will appear as Transmission Use of System charges. Ultimately this is the cheapest way to fund new transmission as regulatory WACC’s are much lower than returns generators would seek to recover for developing and owning the assets. 11 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

Note that the Gippsland REZ is already in AEMO’s Integrated System Plan and therefore it can be assumed this asset would form part of the regulated shared network. This submission seeks to ensure the project is re-categorised as a Stage 1 project to allow faster delivery. 4.2 Funding of network augmentations

The Directions Paper notes development of REZs is about significant anticipatory augmentation. Therefore, it should be put in the regulated asset base and funded under existing models whereby generators pay connection costs to the shared REZ network assets.

Not only does this model produce the cheapest outcomes for consumers, but regulated returns are also significantly lower than generator investor expectations. The Gippsland REZ is not expected to require funding from the $540 million announced by the Victorian Government to support transmission investments. However, to assist households and businesses with their energy bills through the transition to net zero emissions in the electricity sector, the funding could be used to enhance existing Victorian Government initiatives, such as energy efficiency and rebates to reduce electricity bills.

12 Octopus Investments Aust Pty Ltd – Submission to Victorian Renewable Energy Zones (REZ) Development Plan Directions Paper

16 March 2021

Dennis Freedman Head of Investment and Development Octopus Investments Como Centre, 644 Chapel Street SOUTH YARRA VIC 3141

Email: [email protected]

Dear Mr Freedman

WELLINGTON SHIRE SUPPORT FOR THE GIPPSLAND RENEWABLE ENERGY ZONE

Wellington Shire Council strongly supports Gippsland’s inclusion as one of six Renewable Energy Zones as identified in the Victorian Renewable Energy Zones Development Plan Directions Paper. This presents an incredible opportunity to continue the strong history of the Gippsland region as an electricity and energy powerhouse for Victoria. The Renewable Energy Zones (REZs) will support new renewable energy projects, achieving better energy affordability, lowering emissions, improving reliability outcomes for consumers, and furthering regional economic development goals. REZs play an important role in delivering affordable, clean energy generation to help replace the State’s existing coal-fired power stations as they close over the coming decades. The recent announcement confirming the early closure of Yallourn further confirms this. Implementing a policy framework and REZ development plan that fosters new infrastructure and large-scale energy projects coming into the region, will provide for much needed economic boost and set a strong foundation for further growth, skills and capacity building for future generations. A natural advantage of the region is the comprehensive network of generation and transmission infrastructure, which has supported Victorian power supply over many decades. The inclusion of the Gippsland REZ (G-REZ) presents significant opportunities to leverage local expertise, skills and resources, as the region transitions to a lower carbon environment. There are significant economic, social and environmental benefits that come from the Gippsland G-REZ. We particularly support the G-REZ as it will help to safeguard jobs and businesses in the Gippsland region. Jobs and businesses are what sustain communities and ensures the ongoing availability and operation of community and government infrastructure and services including schools and childcare facilities, hospital and allied health services, emergency services, libraries, recreational, sport and cultural facilities.

Wellington Shire sees every day the impacts and benefits of such infrastructure and services for the Gippsland community. The Star of the South wind project and the Solis RE solar project are two of many renewable projects which are planned for our local area which represent enormous opportunity for our community, the economy and the environment. Thank you for the opportunity to show our support for this important step in Victoria’s energy transformation and the preservation of strong local communities.

Yours sincerely

CR GARRY STEPHENS Mayor

Ref: PJ:BM ECM: 2741580

29 March 2021

Dennis Freedman Head of Investment and Development Octopus Investments

Como Centre 644 Chapel Street, South Yarra Melbourne VIC 3141

Dear Dennis,

Re: Gippsland Renewable Energy Zone development

The National Electricity Market (NEM) and its generation mix is changing at unprecedented speed. Fast and targeted investment into new essential energy infrastructure is required to ensure the secure, reliable and cost-effective operation of the NEM.

Victoria is centrally located in the NEM and has traditionally been a major energy provider for south eastern Australia’s commerce and industry. There are tremendous renewable energy resources to develop, and communities who want to participate in this exciting and necessary development. Effective and efficient harnessing of these resources will secure Victoria’s position as a leading jurisdiction, enabling decarbonisation and strongly supporting the economic growth of the State through creation of jobs and access to dependable, cost efficient, clean energy.

Our transmission system needs to be fit for purpose to meet this demand for change. AusNet Services views Renewable Energy Zones (REZ) as playing an important role in delivering confidence that renewable energy resources and investments will get to market in a timely and reliable way. This will be even more critical as Victoria emerges from the economic uncertainty created by the Covid-19 pandemic.

AusNet Services is pleased to be working with organisations such as Octopus Investments on the feasibility of a REZ in the Gippsland region (G-REZ) enabling an additional 3GW of renewable energy in an unconstrained part of the network. In addition to working in partnership with renewable energy developers, we are working with other stakeholders, including community and business groups, to understand what is important to the community and better shape the project.

Given the importance of this project to both the Gippsland region and Victoria’s energy needs, we support the G-REZ being considered by the Victorian Government for prioritisation as a stage one project in the Victorian Government’s REZ Development Plan, which is open for consultation.

In quantifying the importance of this project to Victoria, AusNet Services engaged Ernst and Young to complete preliminary economic modelling for G-REZ. The results of the modelling indicate that G-REZ would create:

 Approximately 1,800 jobs during peak construction period;  More than 350 ongoing jobs over 25 years;  $70million in direct investment to the Gippsland economy; and  Potential to unlock $3.8billion of investment in renewable projects in the region.

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The direct investments and jobs created are of particular importance as Gippsland transitions from thermal to renewable energy generation.

Though the project is in its early stages, our initial planning suggests the G-REZ is a feasible proposition and can be delivered within three years, once appropriate government and environmental planning approvals have been granted.

As we progress our planning, we will continue to consult with stakeholders and the community to ensure the project delivers the best outcomes for the community and environment. We look forward to an ongoing relationship with these groups, and organisations such as Octopus Investments, in developing the necessary infrastructure to support Victoria’s energy needs.

Yours sincerely,

Damien Sanford General Manager, Infrastructure

AusNet Services Letter of Support Page 2 of 2