Business Council: Victorian RNET could increase cost volatility

AGL's Macarthur Wind Farm
AGL's Macarthur Wind Farm

The Business Council of Australia (BCA) has criticised the Victorian Government for a lack of consultation with industry on setting the VRET.

They were also critical of it’s inconsistency with the Federal renewables target.

In a submission responding to the Victorian Renewables Energy Target, the BCA warned a lack of consultation with industry on the target of 25 per cent by 2020 and 40 per cent by 2025, saying no specific target had been discussed with industry prior to it being set.

The BCA said in it’s submission: “no modelling has been provided to indicate the costs that will be incurred in administering and paying for the VRET scheme.”

The Victorian Government announced the new target in June, when states and territory governments set targets exceeding the federal target of 33,000 gigawatt hours (or 23.5 per cent) renewables by 2020.

In response, Victorian Climate Change Minister Lily D’Ambrosio dismissed the concerns.

“We recognise the transition to renewable energy will deliver thousands of sustainable jobs and $9 billion in new capital expenditure,” Ms D’Ambrosio said.

In its submission, the BCA urged the Victorian government to transmission to a lower-emission economy slowly and gradually.

It it’s submission, the BCA said Australia needed to manage the transition away from emissions intensive generation in an orderly manner that ensures system reliability at minimal cost increases to consumers.

The BCA cited the South Australian market’s experience this year and said rapid increases in renewable energy generation without a broader plan could result in higher and more volatile wholesale energy prices.