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    Tue, 18th Oct 2022 18:26:00
    ‘Rewiring the nation’: Albanese and Andrews governments to jointly fund renewable energy zones
    $1.5bn agreement includes plan to fast-track regulatory processes to support ‘rapid’ development of Victoria’s offshore wind industry 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, reached ahead of next Tuesday’s federal budget and the Victorian state election in November, will see $1.5bn in concessional financing made available for renewable energy zone projects in the state. The deal includes agreement to fast-track regulatory processes to support what the two governments characterise as “rapid” development of Victoria’s promised offshore wind industry. The Clean Energy Finance Corporation (CEFC) will also provide a concessional loan of $750m to ensure the interconnector between Victoria and New South Wales, the VNI West KerangLink, is completed by 2028. The Australian Energy Market Operator says the completion of KerangLink is urgent so that appropriate transmission infrastructure is in place before the anticipated closure of ageing coal-fired power stations. Earlier this year, Aemo’s chief executive, Daniel Westerman, outlined five top priority projects when he released the latest integrated system plan: the HumeLink to connect up the Snowy 2.0 pumped hydro project, the Sydney Ring and New England renewable energy zone links, as well as the Marinus and the KerangLink, also known as VNI West. Under the new agreement to be outlined on Wednesday, the Victorian, Tasmanian and commonwealth governments will also take a total 20% joint equity stake in the Marinus link project between northern Tasmania and Gippsland, with the remaining 80% funded through a concessional loan from the CEFC. Another $1bn of low-cost loans will fund the redevelopment of Tasmania’s Tarraleah hydro power 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. Modelling for Labor by the consultants RepuTex suggested it would help lift renewable energy generation from about 35% to 82% by 2030. Victoria has six designated onshore renewable energy zones and is home to the country’s most advanced offshore windfarm proposal – a 200-turbine wind development near Gippsland, known as Star of the South. The federal climate change minister, Chris Bowen, announced in August six proposed areas around the country for offshore wind development, with Gippsland the first to be opened for community consultation. The Victorian government has set sets targets of having 4GW of offshore wind capacity 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 an Aemo blueprint for the future of the electricity grid. The Marinus link project was first flagged in 2017. Progress since has been slow, with little clarity over where the funding would come from, and the proposal has been sharply criticised as unnecessary and environmentally damaging by the former Greens’ leaders and prominent conservationists Bob Brown and Christine Milne. 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 Kerang link has been forecast to cost up to $3.3bn, Marinus link up to $5bn. Neither transmission link has passed the multi-stage regulatory investment test, overseen by the Australian Energy Regulator, which some analysts have considered a bigger hurdle than securing concessional finance. In a joint statement ahead of Wednesday’s announcement, the 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 an 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 renewable generation “is never going to be realised”.
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