Economic modelling of the Victorian Government's decision to impose a 10 per cent mandatory renewable energy target, outlining possible impacts on industry and the wider economy, should be released as soon as possible says VECCI.

As part of its `Our Environment, Our Future' Statement released today, the Victorian Government will impose a deadline of 2016 for electricity retailers to buy a minimum 10 percent of renewable energy – this follows an earlier proposal to make the deadline 2010, a measure opposed by VECCI as unrealistic and potentially harmful to the economy.

"While VECCI recognises that there is a role for renewable energy sources as a complementary source of power, the stark reality is that renewable energy will not provide a commercially viable alternative supply for Victoria over the medium to long term", says VECCI Chief Executive Officer, Mr Neil Coulson.

"The Australian Bureau of Agriculture and Resource Economics (ABARE) has forecast that renewable energy sources will comprise only 3 percent of total primary energy consumption by 2030, compared with 44 percent from brown coal energy generation.

"If the Victorian Government wants to act strategically to position the State for a carbon-constrained future, such action must be cognisant of Victoria's comparative advantages and economic realities – as such, a similar focus is needed in terms of investing in technologies to make brown coal more greenhouse friendly.

"As a competitively priced, secure and reliable source of electricity, brown coal provides 85 percent of Victoria's electricity and it will continue to dominate base load power generation for many years to come.

"The challenge for Victoria is to secure a long-term competitively priced and reliable supply of electricity while minimising or containing greenhouse emissions that result from its generation. Technologies such as lignite drying and gasification are showing real promise in reducing greenhouse gas emissions. Studies indicate that they have the potential to reduce greenhouse gas emissions by up to 40 percent, compared with current best practices.

"Other measures in the Statement are welcomed by VECCI, including a commitment to assist industry to cut its consumption of energy and water and reduce its waste outputs", says Mr Coulson.

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VECCI Strategic Communications
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