Australia: Victoria’s Energy Future Statement

Legally Green

The Victorian Government's recently released Energy Future Statement (EFS) identifies the issues and opportunities currently facing the state's energy sector, outlines its energy options in the future, and sets out how the Government hopes to deliver a secure, sustainable and cost-efficient energy future. This update focuses on the key funding and policy statements in the EFS that will influence Victoria's energy industry in the years ahead.

Working with the community

In an effort to promote greater community involvement in decisions about Victoria's energy future the Government has used the EFS to declare that, among other things, it will act to encourage communities to identify viable renewable energy possibilities by making funding available to support the development of new community based solar hubs.

The Victorian Government also acknowledges in its EFS that energy price rises in the future will be felt more acutely by people on low incomes. To address the issues of vulnerable groups, the Government has committed itself to retaining its existing programs for the disadvantaged, and will make information and tools to identify and measure energy use available to households and communities. For instance, awareness campaigns will be used to promote increased use of home energy audits, energy bills will provide 'benchmarking' information allowing people to compare their energy usage with the rest of the community, the roll out of smart meters to all homes and businesses in the state will continue, and an expansion of the Energy Saver Incentive Scheme (previously known as the Victorian Energy Efficiency Target) will be considered when it is reviewed in 2011.

The EFS goes on to emphasise the importance of helping regional areas, most notably the Latrobe Valley, adjust to the introduction of an emissions trading scheme or carbon price. Development of a Blueprint for Regional Victoria to manage the growth and change taking place across the state's regions due to new energy developments is already underway, and if an emissions trading scheme is introduced, the Victorian Government has indicated it will submit a bid to the Commonwealth Government for an allocation of funds to manage the short and long term structural issues in the state's most vulnerable regions.

Another significant feature of the EFS is the Victorian Government's response to the demand for the many new skilled workers - in research and development, construction, and the operation of new energy industries such as home energy audits - that will be driven by growth in low emissions energy technologies. The Government has agreed to establish a Green Skills Taskforce to provide strategic advice on Victoria's green skills and training needs, including those needed by the energy efficiency and low emissions energy supply sectors.

Driving energy innovation

To ensure renewable energy technologies are ready and able to meet the state's future energy needs, the Victorian Government has indicated in the EFS that it will commit a further $100 million to attract support for a large scale solar plant in Victoria, subject to Commonwealth Flagships funding. The Government has also promised to develop policy frameworks for new technologies, such as marine energy, and to this end is developing a marine energy policy to deal with issues such as suitable facility locations and managing access to marine areas (such as the sea bed) to potential investors.

Victoria's extensive coal resources, solid knowledge base and excellent offshore storage options create the potential for the state to be a world 'test case' for Carbon Capture and Storage (CCS), and consequently the Government has declared in the EFS that it will offer support for investment in first-of-a-kind CCS projects through the Energy Technology Innovation Strategy, and continue to provide funding support for the Co-operative Research Centre for Greenhouse Gas Technologies.

Two further goals the Victorian Government identifies in its EFS are, firstly, facilitating the transition to cleaner transport, and secondly, positioning the state to capitalise on long term economic opportunities in the transport sector. In line with these aims, the Government will conduct a five year trial of electric vehicles to provide 'real-world' information on the use of electric vehicles in Victorian conditions, and implement a Sustainable Transport Energy Strategy to help maintain Victoria's long term transport energy security, promote new economic development and job opportunities, and remove barriers to the adoption of alternative fuels and low emissions vehicle technologies.

Attracting and facilitating investment

The Victorian Government announced in its EFS that it will implement regulatory changes that will provide a new planning application process for projects of state significance through the Planning and Environment Act 1987 (Vic), and amend the Victorian Planning Provisions to support the development of a broad range of low emissions energy facilities. Other initiatives include the establishment of a dedicated Green Door process for low emissions energy investors, which will provide specialist advice on energy developments, and the development of tailored best practice guidelines and tools for wind and other energy developers.

To ensure the effective use of the state's energy resources in the future and promote the potential of CCS technologies, the Victorian Government has also indicated it will undertake geological studies and allow prospective investors to bid for the right to explore for underground storage formations based on those studies. In conjunction, in order to capture the full benefits of CCS research, development and demonstration at a large scale, the Government has declared it will coordinate activity and funding to run multiple complementary CCS trials. This will involve supporting different technologies for carbon capture and linking them via a shared transport network of pipelines to storage sites in the offshore Gippsland Basin. The development of a CCS 'hub' in Victoria should help ensure that infrastructure is developed from the outset with the intention of increasing its scale to cover commercial operation from multiple users, with the aim of lowering the long term cost of CCS.

To promote investment in energy efficiency, the Victorian Government has used its EFS to commit to implementing 6 star energy efficiency standards for commercial and residential buildings, and facilitating the approvals processes for green buildings.

Leading further market reform

Finally, the Victorian Government used the EFS to state its continued support for a national emissions trading scheme as the most efficient way of generating the structural changes across the Australian economy necessary to lower our carbon pollution levels. This position has been strengthened significantly with the subsequent release of the Victorian Government's Climate Change White Paper on 26 July 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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