Facilitating Renewable Energy Development
Overview
Around 96 per cent of the electricity consumed by Victoria is generated from fossil fuels. Brown coal accounts for 90 per cent of this generation and produces around 55 per cent of the state’s greenhouse gas emissions. Around 3.9 per cent of Victoria’s electricity generation comes from renewable sources.
This audit examined whether the development of renewable energy has been facilitated effectively by the Department of Premier and Cabinet (DPC), Department of Primary Industries (DPI), Department of Business and Innovation (DBI) and Sustainability Victoria (SV).
The audit found that, while total renewable energy generation has increased, efforts to increase the proportion of electricity generated from renewable sources have proven not to be effective. Neither the setting of renewable energy targets, nor the establishment of investment incentives, has delivered expected results. The volume of renewable energy presently generated falls well short of expectations and growth in the state’s capacity to generate renewable energy is not on track to deliver future targets.
While several external factors have affected the amount of renewable energy generation, achievement of targets has been undermined by poor planning.
Solar energy targets established in 2010 underpin the effort to facilitate future solar energy development. Despite their importance, no assessment was undertaken by DPC to support or substantiate either the targets, or the time frames for delivery, to demonstrate that the targets were practicable. Estimates show that achieving the 2 500 gigawatt hour target by 2020 would cost $2.4–$3.4 billion, in net present value terms. This represents an increase in average annual household electricity bills of $23–$47 each year, over the lifetime of the scheme.
Renewable energy research and development projects, as well as projects aimed at developing new technologies funded by the state have been generally well managed by DPI, DBI and SV. These projects have contributed positively to developing the capability required to generate renewable energy.