Article - Energy initiatives funded in the Victorian 2018-19 Budget
The Victorian Government recently released its 2018-19 Budget. This year’s budget comes from a high water mark when the Andrews Government made unprecedented investment in renewable energy and action to tackle climate change.
In 2017, the Victorian Government made an unprecedented, comprehensive and integrated $146 million investment in its Renewable Energy Action Plan.
This was followed up with investment in Australia’s largest renewable energy auction of 650MW for new reliable, efficient and affordable energy supply into Victoria’s energy grid. Although the auction is now closed, its cost is not disclosed in the budget papers as the winning bidders are expected to be announced in July 2018. The government has however funded in this budget $1.6 million over four years for the internal administration of its renewable energy contracts.
Most of the funding goes to energy affordability
The key energy and cost-of-living initiative in this year’s budget is the $48 million Power Saving Bonus. It is designed to encourage Victorian households to get a better deal from energy providers. Households who use the government-run Victorian Energy Compare website from 1 July 2018 will receive $50 and could join the seven out of ten website users who have reported switching offers and saving up to $330 on their energy bills in the first year.
The 2018-19 Budget also provides $21.8 million to boost the Utility Relief Grants cap from $500 to $600. This grant assists households who are unable to pay their electricity, gas or water bills due to unforeseen financial circumstances.
In late 2017, the Victorian Government also worked with the State’s three largest energy retailers to provide rebates of up to $720 to more than 285 000 Victorian customers on costly default and expired offers.
In March 2018, the government committed to further steps to create a fairer and more affordable energy market in its Interim response to the Independent Review of the Electricity and gas Retail Markets in Victoria.
You can find my earlier commentary on the government’s Interim Response here.
Finally, the government also funded:
$4.6 million over four years to support the analysis of Victoria’s position on national regulatory reform (this is likely to include work on the national Energy Guarantee) and to meet its commitments at the Council of Australian Governments’ (COAG)’s Energy Council; and
$0.3 million in 2018-19 for the Hume renewable energy strategy.
In this budget, the government has continued to draw down its Sustainability Fund with a total of $41 million of new expenditure earmarked against the Fund (but none of it is for energy initiatives in this budget).
The response to the budget has generally been positive, although environmental groups have noted the lack of any material initiatives to tackle climate change. Only $1.1 million is provided to develop climate change mitigation pledges in key sectors such as transport and electricity.
Work towards announcing Victoria’s first interim emissions reduction target has however commenced with the release in March of an Issues Paper that can be found here.
Public consultation on the Paper closed a few days ago. More significant funding may be announced in 2019 when the Minister for Energy and the Premier set the first interim emissions reduction targets.
This article was first published on LinkedIn.