Victoria State Labor Government Presents New “Hybrid” Contracts for Solar and Wind Farms

As Renew Economy reports, the details of the Victorian Renewable Energy Auction Scheme have been released and suggests it may not be until the middle of 2018 until the winners of the reverse auction will be announced. The said scheme is an essential part of the government’s strategy to attain 25 percent renewable energy by 2025.
The complete information of the scheme will probably be made available until mid-October, giving applicants three months to submit their bids. It would also take the government three months to analyse the offers before scheduling contract negotiations with the successful bidders.
The report also stated that Victoria will present a 15-year “hybrid payment” that has a fixed component that will be paid quarterly in the form of $/MW/year.
The document showing the outline of the scheme indicated, “Under this mechanism, proponents will bid into the auction for the FP payment. The FP payment is intended to reflect the guaranteed revenue, required by proponents, to support their project in addition to the revenue under the government-set CfD payment.”
The “Contract for Difference” is still the key component of the scheme and this is being integrated along the similar lines to the ACT government, which presents a possible profit for the government if the wholesale prices are higher than the price bid by the developers of solar and wind farms.
Considering that the wholesale prices in Victoria are at more than $100 per megawatt-hour, the possibility for “pay-backs is high, but this will still depend on how much renewable energy generation is built, and the timing of much of the wind output.
The contract will be used to lure solar farms to Victoria even though it might post struggles due to the low solar radiance in the area. Solar will also produce power at the times of day normally associated with higher prices.
For a more comprehensive report on the new “hybrid” contract, visit this page.