July 5, 2016 - 4:40 PM EDT
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Climate change: how Victoria trumped New South Wales in the great renewable energy race

Two years ago Rob Stokes, the then environment minister for New South Wales, promised that his state could become Australia’s answer to California in the clean energy industry.

“We are making NSW No 1 in energy and environmental policy,” Stokes, a Liberal, told the Clean Energy Week gathering in Sydney in July 2014. “When it comes to clean energy, we can be Australia’s answer to California.”

It was a bold vision, and a laudable one, but it didn’t turn out that way.

Investment in large-scale renewable energy, apart from some federally funded large-scale solar projects, has all but dried up. In May, a report by the Climate Council rated NSW as the “worst place” for renewable energy investment in Australia.

It’s ironic because NSW has the biggest pipeline of undeveloped renewable energy projects in the country. But now other states are seeking to grab a bigger share of the renewable energy pie, particularly as traditional industries of car manufacturing and steel-making face an uncertain future.

Last month Victoria became the latest Labor government to announce renewable energy targets over and above the federal target, announcing it would aim to have 25% of its electricity served by renewable energy by 2020, and 40% by 2025.

That compares with a national target that translates to about a 23% by 2020, and the Australian Capital Territory’s 100% target by 2020, Queensland’s 50% target by 2030 and South Australia’s 50% target by 2025, a percentage it is likely to reach later this year.

Related: Climate change: communities and councils fill void on zero emissions targets

But Victoria’s target appears the most ambitious of the lot, simply for the sheer number of new wind and solar farms that will be needed to meet the target. And it also intends to have legislation in place from next year that will ensure the target is met.

The 40% by 2025 target translates into some 5,400MW of new renewable energy capacity to be installed within the next 10 years. That will be almost exclusively wind and solar farms and is three times as much renewable energy capacity as the state has installed up till now and nearly equal to the national target for 2020.

“This is an ambitious target but a very achievable target,” says the Victorian energy minister, Lily D’Ambrosio. She intends to adopt the system of “reverse auctions” pioneered successfully by the ACT, which will have some 600MW of large scale renewables in place by 2020 to meet its own 100% target.

Already, under a previously announced tender designed to support wind projects, the Victorian government has signed contracts that will help two windfarms be built over the next year – a 13-turbine windfarm at Kiata near Horsham and a 44-turbine windfarm at Mount Gellibrand near Colac.

It is not the first time that Victoria has stepped into the national policy arena with its own state-based target. It did the same in 2006, when the federal target came to an unexpected standstill, and several wind turbine manufacturing facilities were closed down. At that time, the Victoria government introduced its own state target, known then as the Victorian renewable energy target, to protect jobs and get projects built.

One of the few manufacturers that remain is Keppel Prince in the coastal town of Portland, which specialises in building towers for wind turbines. It recently completed an order for 35 turbines for the Ararat windfarm – which won a tender in the ACT auction system – and is looking forward to new business.

“The prospects look good,” says Steve Garner, the general manager at Keppel Prince. He estimates that the target will require 150 new wind towers each year for 10 years.

“That’s quite exciting for an organisation like ours,” he says. “It’s a huge boost for employment and it’s a huge boost for manufacturing.

Related: Four visionary renewable energy projects that could pay off for Australia

Garner was forced to slash his workforce by nearly half because of the investment drought caused by uncertainty in the federal target but he has since re-employ about 50 people and hopes that by 2017 his wind turbine division can get back up to around 300 jobs.

The Clean Energy Council chief executive, Kane Thornton, says Victoria’s initiative will build confidence for the sector that has had little in the past three years.

“It adds to the belief that renewables do have a strong future in this country,” Thornton says. “And it will help meet the national target, which requires 6,000MW of new capacity by 2020.

“It is also smart timing... It should see Victoria claim a big share of the renewable energy pie out to 2025 and beyond … and facilitate the creation of new jobs in emerging industries in regional and rural areas of Victoria, where renewable energy power plants are usually built.

Wind is expected to be the biggest winner from the new target and Leigh Ewbank, from the Yes2Renewables campaign that brought together a number of NGOs pushing for a higher target, estimates there are about 3,000MW of large-scale wind projects in the state that are – or close to – being “shovel ready”.

These include 2,300MW of “approved” projects such as the 450MW Stockland Hill and the 312MW Moorabool projects, both near Ballarat. There are another 14 approved projects of various sizes.

Ewbank also says it will provide a lifeline to manufacturing groups across the state, including Keppel Prince and others such Olex Cables and Wilsons Transformers in Geelong and the western suburbs of Melbourne.

“A doubling of Victoria’s wind energy capacity in less than four years is a huge opportunity for local manufacturers,” Ewbank says. “The Andrews government can get the best outcome for jobs by encouraging renewable energy companies to use local content.”

Indeed, wind is not the only opportunity. D’Ambrosio also expects a significant amount of large-scale solar projects, although she says it is too early to put a number on it.

That should provide opportunities for companies like IXL Solar, a subsidiary of the family-owned, Geelong-based auto parts manufacturer IXL that is looking for new opportunities in new industries.

IXL Solar, which was established in 2012, is now Australia’s only manufacturer of framing systems, upon which solar panels are mounted in large solar farms.

Its general manager, Claude Dagescy, says the sector has “been on hold” but there is a surge of new interest, particularly after Arena offered $100m in grant funding for large-scale solar projects.

Two of 20 shortlisted projects are located in Victoria – the Gannawarra solar farm near Kerang and the Bannerton solar farm – and Dagescy says that the Victorian initiative will offer new opportunities for other projects.

“We see this as quite positive. We need certainty around the policies and we need commitments from project developers.”

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Source: Equities.com News (July 5, 2016 - 4:40 PM EDT)

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