The Victorian government has announced it will spend $1bn on renewable energy projects, which will be overseen by a state-owned company, in an effort to have 95% of electricity come from renewable sources by 2035.
The premier, Daniel Andrews, and environment minister, Lily D’Amboriso, announced on Thursday that if re-elected in November, Labor will revive the State Electricity Commission (SEC), which will be responsible for building new renewable energy projects.
Under the plan, an initial investment of $1bn will be spent to deliver 4.5GW of power through renewable energy projects.
Andrews described the pledge as the “most significant energy announcement” in the state for the last 30 years.
He said the new renewable projects through the SEC would mean a third of the state’s energy would be publicly owned.
“One power station is closing, many smaller power stations will take its place,” Andrews said. “Those power stations won’t be for profit, they’ll be for people. They’ll be not owned by a private company. They’ll be owned by everyone. Everyone will benefit from that.”
The government said the new projects will replace the capacity of the coal-fired Loy Yang A power station, which operator AGL Energy last month announced will close in 2035, a decade earlier than planned.
The power plant currently supplies about 30% of the state’s electricity and is the biggest single carbon-polluting plant in the country.
The government said it will hold a controlling stake in the new renewable energy projects, with the balance of funding to come from “like-minded entities” such as industry super funds.
About $20m will be spent to set up the SEC in Morwell, in the La Trobe Valley, which has been the home of the state’s coal industry.
The SEC was first set up in 1918, and by 1972 it was the sole agency in the state for electricity generation, transmission, distribution and supply before it was privatised in the 1990s.
The government said the new SEC will “consider all options”, including becoming a state-run retailer, partnering with an ethical retailer or remaining solely in the wholesale market.
As part of the plan, a new target of cutting emissions by 75% to 80% by 2035 was announced, which D’Ambrosio described as “world-leading”.
“We are the second jurisdiction in the world to set the 75% to 80% reductions target by 2035,” she said.
The government will also bring forward – and legislate – its net zero emissions target by five years to 2045. The previous targets were to reduce emissions by 28% to 33% of 2005 levels by 2025, and by 45% to 50% by 2030.
In New South Wales, the government has set a 50% emissions reduction target by 2030 and net zero by 2050, while the ACT has a 65% to 75% emissions reduction target by 2030, 90% by 2040 and net zero by 2045.
The federal government has legislated an emissions reduction target of 43% by 2030 and net zero emissions by 2050.
Victoria has also set target for 95% of all electricity to come from renewable energy by 2035, and boosted its 2035 target from 50% to 65%.
The state government estimates the initiatives will boost the state’s economic output by about $9.5bn and support 59,000 jobs through to 2035.