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Victorian Government: Renewable Energy Announcement

Victorian businesses which are struggling with sky-high energy prices have welcomed today's announcement by the State Government that electricity prices are likely to reduce as a result of its renewable energy targets.

However, the Australian Industry Group says that while the initial 650MW renewable auction is within the existing Federal RET and likely to reduce costs, there remains uncertainty as to how later auctions and the larger state-based renewables target will fit with the national framework, and whether they will achieve significant cost savings for industry or households.

"Industry remains most concerned about the cost and the reliability of electricity. Getting more supply through a reverse auction can help, but it will be important that any cost reductions are fully passed on to energy users by retailers," Victorian Head of Ai Group Tim Piper said.

"It will also be important that the legislation and policy is well explained, well implemented and well co-ordinated with the national energy frameworks to ensure that we achieve the efficient investment that is badly needed," Mr Piper said.

Ai Group believes the first stage of the policy – to require 25% renewable energy by 2020 – should be achievable at low risk. However, 40% by 2025 is an extremely ambitious ramp-up and will be more difficult to deliver.

Ai Group has welcomed the potential significant investment in new wind farms in the state and the improved certainty to investors.

"In keeping with government policy, we must also ensure that using local products is an important part of these projects, especially where they have the capacity to provide significant new jobs in regional Victoria," Mr Piper said.

Ai Group looks forward to receiving further details on the benefits to Victorian businesses of this new package.

Further comment: Tim Piper – 0411 430 301