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
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
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.