The Albanese and Andrews governments will jointly fund renewable energy zones, offshore wind projects, and interconnectors under the first tranche of Labor’s “rewiring the nation” commitment to plug more renewable power generation into the national grid.
The new agreement will make $1.5 billion in concessional financing available for projects in the state’s renewable energy zone ahead of next Tuesday’s federal budget and the November state election in Victoria.
The deal includes an agreement to fast-track regulatory processes to support what the two governments characterize as the “rapid” development of the promised offshore wind industry in Victoria.
The VNI West KerangLink interconnector between Victoria and New South Wales will be finished by 2028 thanks to a $750 million concessional loan from the Clean Energy Finance Corporation (CEFC).
In order to have the necessary transmission infrastructure in place before the anticipated closure of aging coal-fired power plants, the Australian Energy Market Operator says it is urgent that KerangLink be completed.
When he released the most recent integrated system plan earlier this year, Aemo’s chief executive, Daniel Westerman, listed five top priorities: the HumeLink to connect the Snowy 2.0 pumped hydro project, the Sydney Ring and New England renewable energy zone links, the Marinus and the KerangLink, also known as VNI West.
The Victorian, Tasmanian, and Commonwealth governments will each own 20% of the Marinus link project between northern Tasmania and Gippsland under the terms of the new agreement, which will be unveiled on Wednesday. The CEFC will provide the remaining 80% of the project’s funding in the form of a concessional loan.
Another $1bn of low-cost loans will fund the redevelopment of Tasmania’s Tarraleah hydropower station and a pumped hydro project at Lake Cethana, both parts of the long-promised “battery of the nation” project.
Labor has promised $20bn to “rewire the nation” by accelerating the construction of new electricity transmission links between states and regions as the east coast power grid moves from running predominantly on coal power to renewable energy. According to modeling done for the Labor Department by the consultants RepuTex, it would contribute to increasing renewable energy generation from about 35% to 82% by 2030.
In addition to the nation’s most cutting-edge offshore wind farm proposal, Victoria is home to six designated onshore renewable energy zones and the 200-turbine Star of the South wind development near Gippsland.
Chris Bowen, the federal climate change minister, announced six potential offshore wind development sites in August, with Gippsland being the first to be made available for public comment. The Victorian government has set goals for offshore wind capacity, aiming to reach 4GW by 2035 and 9GW by 2040.
Both KerangLink, with a planned peak capacity of 1800 megawatts, and the two-stage, 1500MW Marinus Link were nominated as “actionable” projects in Aemo’s vision for the grid’s future.
2017 saw the initial notification of the Marinus link project. The proposal has received harsh criticism from former Greens leaders and well-known environmentalists Bob Brown and Christine Milne for being unnecessary and environmentally harmful, and progress has been slow since with little clarity regarding where the funding would come from.
The Aemo blueprint, known as the integrated system plan, said stage one of Marinus would be needed by 2029 and KerangLink by 2031 under a “step change” scenario. The Marinus link could cost $5 billion, and the Kerang link could cost up to $3.3 billion.
Both transmission links failed the Australian Energy Regulator’s multi-stage regulatory investment test, which some analysts believed to be a more difficult obstacle to overcome than obtaining concessional financing.
In a joint statement ahead of Wednesday’s announcement, prime minister Anthony Albanese said Labor’s rewiring the nation commitment had “always been about jobs in new energy industries, delivering cleaner, cheaper and more secure energy, and bringing down emissions.”
“This is a historic day for Victoria and for Australia with the rollout of these key projects putting us on track to be a renewable energy superpower,” Albanese said.
The Victorian premier, Daniel Andrews, said his state had cut emissions, “tripled the amount of renewable energy, and created thousands of jobs”. He said the new commitments would mean “more jobs, cleaner energy, and cheaper power bills for Victorians.”
Ahead of next Tuesday’s budget, the opposition leader, Peter Dutton, has turned his sights on Labor’s “rewiring the nation commitment, contending the proposal to overhaul the energy grid to boost the share of a renewable generation “is never going to be realized”.
According to Chris Bowen, the federal energy minister, the program’s credibility was shown by the first round of funding. “For too long, national energy policy has been ad hoc and hollow – today is another step in turning this around and putting reliable, affordable power and new energy jobs first,” Bowen said.
Reference: https://www.theguardian.com/australia-news/2022/oct/19/rewiring-the-nation-albanese-and-andrews-governments-to-jointly-fund-renewable-energy-zones
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