The Melbourne Renewable Energy Hub is claimed to be one of the largest battery projects in the world and will be twice the size ofthe 300-megawatt Victorian Big Battery near Geelong. Tesla will supply the batteries.
Victoria’s $245 million investment means the SEC has a 38.5 per cent stake in the project. This will make it a major shareholder and mean the government must be included in discussions about its operations.
A potential expansion of the Hub in Melbourne’s west has been mooted that would eventually take it to 1200 megawatts. Discussions about the SEC funding to be announced on Thursday were focused on the first stage.
The Allan government has set a target that Victoria must have 2.6 gigawatts of energy storage set up by 2030 and 6.3 gigawatts by 2035.
During peak periods of energy generation from solar panels and wind farms,electricity fed into the nation’s power grid will be collected by the battery and stored to be provided to homes and businesses at times when it is needed most.
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The announcement comes weeks after Premier Jacinta Allan unveiled the SEC’s 10-year strategic plan,which included registering it as a company that could sell power to manufacturers. State-owned schools,hospitals and services in stand-alone buildings will be itsfirst customers, and the SEC will be expected to service all government customers by 2025.
The commission will initially do this by selling renewable electricity the government had previously secured from 10 or 15-year service agreements,used to support the development of new projects.
Allan also revealed the SEC would become a one-stop shop that would assist Victorian households to transition from gas to electric appliances.
More than 100 registrations of interest were filed by projects seeking funding from the commission’s $1 billion funding pool. Allocation of the remaining money has not yet been announced.
Energy experts have questioned whether the SEC can deliver on its initial pledge to bring down power prices under its current regime.
The government has argued that using its investments to encourage more renewable projects will allow those projects to spend any profits on building more generation and storage,which would supply the grid with more options and lead to lower bills.
Victoria is racing to build enough renewable energy generation to offset the loss of coal-fired power stations that play a major role in the national grid. Yallourn will close in 2028,while an agreement between AGL Energy and the Victorian government will keep Loy Yang A openuntil the mid-2030s.
At the same time,billions of dollars in new transmission projects will be needed to better connect solar farms,wind farms and offshore wind to the existing network.
The state’s net-zero target is to reduce its emissions by 75 to 80 per cent by 2035.
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