Community Energy Inquiry

The Victorian Parliament recently published the results of its inquiry into community energy.
The inquiry committee looked at the benefits of community energy projects and the challenges they face. Challenges in metropolitan areas were a particular focus, as the committee noted that most projects are in regional areas.

Among the committee’s findings were:

  • The ‘reverse auction’ scheme for provision of renewable energy, to be introduced as part of the Victorian Renewable Energy Target, will disadvantage community energy projects as they will be unable to compete with private providers. The committee recommended that The Victorian Government include community engagement or part‑ownership as one of the evaluation criteria for the VRET reverse auction scheme with a weighting of at least 20%.
  • The committee found strongly in favour of local energy trading (sometimes known as ‘microgrids’ ) and recommended the government work with COAG Energy Council toward regulatory changes that would encourage local energy trading.
  • The high cost of grid connection is a barrier for community energy projects. The committee recommended the government work with the COAG Energy Council to develop incentives for electricity distributors to reduce this cost.
  • Councils that use rates-based financing for solar projects (e.g. Darebin Solar Saver) are essentially lending money to ratepayers for solar installations, so this adversely affects their debt ratio. This may deter Councils from this type of project. The committee recommended that the Local Government Act be amended to allow Councils to keep such debts “off balance sheet”. MEFL is particularly glad to see this recommendation in the report, as we advocated to the Inquiry on this issue.

The full report is available to download from the Victorian Parliament website. The Executive Summary, Findings and Recommendations at the front of the report make for interesting reading, even if you don’t have time to read the full 140-page report.

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