Australia: New legislation to stimulate Victorian renewables sector

Last Updated: 31 August 2017
Article by Elisa de Wit and Jacqueline Plant

The Victorian Government has recently announced the legislating of the Victorian renewable energy target and Australia's largest renewable energy auction scheme to date. These announcements follow other policy reforms initiated by the Victorian Government including the Climate Change Act 2017, Take2 Pledge, and the recently released renewable energy action plan.

Victorian renewable energy target

In June 2016, the Victorian Government announced renewable energy targets for generation of 25 per cent by 2020 and 40 per cent by 2025 of Victoria's electricity requirements (the VRET).

On 23 August 2017, the Renewable Energy (Jobs and Investment) Bill 2017 (Vic) (RE Bill) was introduced into the Victorian Parliament with the aim of giving legislative force to the Government's commitments to the VRET and if passed, will be the first time such targets have been reflected in state legislation in Australia.

Key features of the RE Bill:

  • It will facilitate an increase in the proportion of Victoria's electricity generated by means of large scale facilities (defined to be a facility with a generation capacity of more than 100KW) that utilises renewable energy sources or converts renewable energy sources into electricity.
  • It will support the development of projects to encourage investment, employment and technology development in renewable electricity generation, and promote the transition of Victoria to a clean energy economy as well as contribute to the security of Victoria's electricity supply.
  • It will support schemes to achieve the targets set under the RE Bill, which may include the renewable energy auction scheme.
  • It will enshrine the VRET in law by requiring 25 per cent of electricity generated in Victoria to come from facilities that generate electricity by using or converting renewable energy sources into electricity by 2020 and 40 per cent by 2025.
  • The Minister must issue determinations published in the Government Gazette on the minimum amounts of renewable energy generation capacity to meet to the 2020 and 2025 targets.
  • The minimum generation capacity determinations must be worked out by 31 December 2017 for the 2020 target and the minimum capacity needed to achieve the 2025 target will be required to be determined by 31 December 2019.
  • An accountability mechanism requiring annual progress reports on the 2020 and 2025 targets must be laid before each House of Parliament by the Minister for Energy, Environment and Climate Change by the end of October each year. The reports must disclose progress made towards meeting the VRET and the performance of schemes to achieve the VRET that promote electricity generation by large-scale facilities that use renewable energy sources.
  • The Minister will have the ability to declare renewable energy sources in addition to solar and wind.

Victorian renewable energy auction scheme

The VRET will be supported by the Victorian renewable energy auction scheme (VREAS) which will offer long term contracts to successful renewable energy projects. The VREAS will be technology neutral with an allocation specifically for large scale solar projects to ensure diversity in the renewable energy generation mix.

The first auction to be held in October 2017 will award contracts for up to 650MW of renewable energy capacity, the largest of its kind in Australia to date, following from the successful program run by the ACT Government.

New capacity brought online before 2020 will be complementary to the Federal Government's renewable energy target (RET) and additional after 2020 with the intention that continued uncertainty around the federal RET can be overcome.

Key features of the first auction:

  • The format will be a reverse auction.
  • Bids will open from mid October 2017 and will be submitted via a formal request for proposal (RFP).
  • The RFP will set out the terms of participation, consideration of 'value for money' of proposals and the governance framework.
  • Successful proposals will be awarded a 15 year support agreement with the state of Victoria which will be administered by the Department of Environment, Land, Water and Planning. Key components of the support agreement will include project milestones, the option for a tripartite agreement, termination rights, development of a communications and community engagement plan, safety health and environment plan, protections in case of a change in law and the interaction between VREAS and the federal RET.
  • Payment will be via a hybrid mechanism which is combination of a fixed-price payment (FP payment) and a variable contract-for-difference payment (CfD payment) (the latter of which was utilised in the ACT auction scheme). Under the CfD payment, the state will set the 'strike price' in the form of $/MWh of electricity generated which will be set out in the RFP. The FP payment component will be paid quarterly on the form of $/MW/year.
  • Eligibility criteria for auction participation and entry into a support agreement:
    • Auction proponents must have the ability to commence commercial operations before the last quarter of the 2020 calendar year, to enable the creation of large-scale generation certificates (LGCs) before the end of 2020.
    • Two bids must be placed which include one bid for the bundled transfer of all LGCs from projects to the Victorian Government, which will then be resold and a second bid which includes no transfer of LGCs.
    • Projects will be required to be accredited under the federal RET and any LGCs created will be able to be complementary for the life of the project.
    • Only new projects including those which have not yet reached financial close are entitled to bid, although it is envisaged that some preliminary works may have commenced.
    • Expansions of existing projects and proportions of new projects will also be eligible under the auction.
    • A single contracted entity responsible for the RFP submissions and support agreement must be proposed.
    • Projects may involve generation of electricity from all renewable energy sources including wind and solar but they must be consistent with the RE Bill.
    • All projects must be connected to the national electricity market at a single connection point and must be of a size of no smaller than 10MW.
    • A current planning permit must be obtained for all projects.
    • Other criteria may be set out in the RFP
  • Timing:
    • The formal RFP and VRET support agreement are expected to be released in mid October 2017.
    • After the release of the RFP, potential participants will have three months to complete their proposal and submit it through the tender process. Evaluation of tenders is expected to take two to three months.
    • Support agreements will be entered into with successful proponents following the tender process.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions