Victoria’s emissions targets catch the virus

Victoria’s interim emissions targets have succumbed to the coronavirus pandemic. Interim targets for 2025 and 2030 were supposed to be announced last week, but have been deferred until the State Government has a better idea of the full economic impacts of measures to prevent the spread of COVID-19.

The Andrews Government has been at the front of the bus when it comes to promoting its climate credentials. It has already committed to net zero emissions by 2050 and has a 50 per cent renewable energy target by 2030. Both these headline commitments still remain intact.

The decision to defer interim emissions targets for 2025 and 2030 reflects the breadth and depth of uncertainty COVID-19 is creating for governments. An aggressive climate platform has been politically important for the Andrews Government, both to act as a foil to what is sees as weak leadership from the Federal Coalition, and to help fend off Greens candidates in a handful of key inner Melbourne seats.

The Victorian Government had been lining up some big sounding emissions numbers, with (hand-picked) former Federal Climate Minister Greg Combet leadings review panel which recommended a 32-29 per cent cut by 2025 and 45-60 per cent by 2030. This would have front-ended the majority of the emissions reduction for the next 30 years in the next decade.

Around 60 per cent of Victoria’s greenhouse emissions comes from the electricity sector, in particular the emissions from the three remaining brown coal-fired power stations. Transport, agriculture, industrial processes with direct combustion of fuels and waste make up the remaining 40 per cent.

The Government has already committed to a 50 per cent renewable generation target by 2030. The rough halving of electricity emissions by 2030 would still require significant contributions from these other parts of the State economy, without any particularly clear method of delivering them.

That ambition has, at least for now, been deferred as the Government focusses its efforts on more pressing issues.

Victoria appears on track to deliver the first gateway of its renewable energy target: 25 per cent of generation by 2020. Based on data drawn from the OpenNEM data platform, solar, wind and hydro account for around 23 per cent of total generation in 2020 so far, with another 2GW of new renewable projects coming on line by the end of the year.

Curiously though, the legislated definition of achieving the target is not based on the maths of renewable gigawatt hours as a share of the state’s total. In an act of remarkable self-marking, the “target” for 2020 is defined in advance by the Government by setting its own capacity target. In this case the target is 6341MW, which has already been passed, but is technically short of the 25 per cent goal.

So regardless of how much generation actually makes it to market, the Victorian government is assured of being able to proclaim it has reached its target.

This might be a much harder Jedi mind trick to pull in 2025 when the gap between the prescribed amount of capacity and the actual generation may be much greater. It will need to find an additional 7000 GWh of renewable generation (that’s more than a 60 per cent increase) in the next five years. The fallout from oil price wars and the economic disruption of the pandemic may make that existing target extremely challenging to deliver.