The state of Victoria in Australia will be soliciting 'at least' 600 MW renewable energy capacity under the Victorian Renewable Energy Target auction round 2, dubbed as VRET2 that it plans to hold around Q3/2021.
The Department of Environment, Land, Water and Planning (DELWP) said auction tender documentation is being finalized and released around the 3rd quarter this year. Successful projects will be announced in H1/2022.
DELWP said it has designed the 2nd round of auction after factoring in key findings of its VRET2 market sounding process held between September 2020 and October 2020 (see Australia's Victoria Plans 600 MW RE Addition). However, it added that it may support additional renewable energy capacity beyond the 600 MW threshold depending on the scale and competitiveness of bids received.
Projects awarded under VRET2 will match the state government's electricity consumption for Victorian hospitals and schools, Melbourne's entire train network and a range of other government infrastructure and services.
In a fact sheet published to explain VRET2 details, the department has specified that it will seek bids that offer a strike price AUD per MWh for renewable energy generation in the state over 10 years, and also a payment cap which is an upper limit of total net payment from government under a Contract for Difference (CFD) agreement.
VRET2 follows VRET1 when the government selected 6 wind and solar projects with 928 MW capacity, exceeding the original target of 650 MW in September 2018. Winning projects comprised 254.6 MW solar power capacity with single axis trackers (see Victoria Awards 928 MW New RE Capacity).
Through VRET, Victoria aims to meet its target to source 100% renewable electricity for its state government operations by 2025. It believes additional renewable energy supply through auctions will continue to put downward pressure on wholesale electricity prices, reducing bills for every Victorian household and business.