Premier Daniel Andrews said the plan would mean more jobs, cleaner energy and cheaper electricity bills for Victorians.
“Victoria has reduced emissions more than any other state, tripled the amount of renewable energy and created thousands of jobs,” he said. “We’re not just talking about climate action, we’re making it happen.”
Earlier this year, the Australian Energy Market Operator (AEMO) listed the KerangLink project as “urgent”, along with four major network upgrades involving a total of 10,000 kilometers of new power lines.
But until now the timing and funding arrangements have been unclear, with AEMO only suggesting the project should be built by mid-2031 “or sooner with additional support”. The issue will be raised at an upcoming meeting of state and federal energy ministers on August 12.
An assessment of the link project by AEMO found it would bring net benefits of $687 million and warned it would be needed to meet Australia’s net-zero emissions target by 2050.
“The projected closure of aging coal-fired generators in Victoria and New South Wales over the coming decades poses a serious challenge to the reliability of electricity supply to the energy industry,” the AEMO report said.
Victoria promises that by 2030, half of the state’s electricity will be generated using renewable energy sources. But the plan faces a huge potential hurdle as the grid’s ability to handle more renewable energy reaches its limits.
The Commonwealth, Victoria and Tasmania have also signed agreements for the Marinus Link interconnector, a proposed 1,500 megawatt subsea and underground electricity link to further connect Tasmania to Victoria.
Under the agreement, each of the three jurisdictions pledged to contribute an equal total of 20 percent of the project’s cost.
It said the submarine line would create 1400 jobs in Victoria and attract $1.5 billion in investment to the Gippsland region.
State government simulation recently provided The era found the KerangLink project would allow Victoria to export 1,930 megawatts of electricity to New South Wales from renewable projects such as offshore wind farms. The project is estimated to reduce retail electricity bills by $30 to $40 per year starting in 2030, with the capital costs offset by cheaper electricity.
With coal-fired power rapidly phasing out, AEMO has warned that the current “record pace” of renewables increases must be maintained every year for a decade to triple variable renewable capacity by 2030 and then almost double again by 2040 and then double again by 2050.
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