Victoria’s Climate Change Strategy is our roadmap to net-zero emissions and a climate resilient Victoria by 2050. The initiatives in the Climate Change Strategy will support communities and businesses to make the changes we need to reduce the impacts of climate change and continue to support our economy to grow. Reaching our emissions reduction targets will take action by governments, businesses, and the community. To help drive this action, the Victorian Government has developed pledges which outline the actions we will take to cut emissions from each sector and from the Victorian Government’s own operations. The first pledge period is from 2021 to 2025, and we will make these pledges every 5 years until Victoria achieves net-zero emissions.

What is the Energy sector emissions reduction pledge?

The Energy sector emissions reduction pledge will accelerate Victoria’s transition to a clean and efficient energy future. 50% of Victoria's electricity will come from renewable sources by 2030, ensuring we have greener, more comfortable homes and buildings, and will benefit from reduced energy costs and growth in emerging industries. The pledge has a dual focus on switching to clean-energy sources and uses - renewable electricity, hydrogen, cleaner gas and electric vehicles - and managing energy demand, including through improved energy efficiency across the economy.

Record funding to support emissions reduction

The Energy pledge is supported by the Government’s record $1.6 billion Clean Energy Package announced in the Victorian Budget 2020-21, the biggest commitment to clean energy made by any Australian state government in history.

Actions under the Energy pledge

Zero Emissions Vehicles

The Victorian Government have announced a $100 million dollar package to support the adoption of zero emissions vehicles (ZEVs) in Victoria. They have set a target of 50% of new light vehicle sales to be ZEVs by 2030. ZEVs will play a crucial role in securing our clean energy future and Victoria is positioning itself to leverage the many opportunities associated with these exciting technologies. The package includes $46 million for an Australian-first Zero Emissions Vehicle Subsidy Program.

Woman standing next to Nissan Leaf

Zero Emissions Vehicle (ZEV) Roadmap

  • Victoria’s ZEV Roadmap provides the strategic foundation for this transition, outlining the Government’s key actions and priorities to support the uptake of ZEVs over coming years and ensure the successful integration of electric vehicles into the grid.

Charging infrastructure

  • $19 million will be invested in a further rollout of electric vehicle charging infrastructure – in regional towns, tourist spots, and at other high-use locations and for commercial and government fleets – to create a readily accessible and coordinated network of public charging infrastructure across Victoria.

Making buildings ZEV-ready

  • Victoria will support further reforms to the National Construction Code in 2022 to make new buildings ZEV-ready.

Renewable energy investment

Victoria’s energy system is changing to support the shift to renewable energy and distributed energy resources (such as rooftop solar) coupled with energy storage. To advance these changes, targeted investments are being made to:

  • Unlock constrained renewable energy connection capacity and provide Victorians with cleaner, cheaper energy Support an affordable, reliable and secure energy system
  • Encourage community engagement and co-investment for the uptake of new, smart distributed energy technologies.

Solar panels and wind turbines

Victorian Renewable Energy Targets

In 2019, the Victorian Government legislated an increased Victorian Renewable Energy Target (VRET) of 50% by 2030, building on the existing 2020 and 2025 targets. Victoria has achieved its renewable energy target for 2020 of 25% renewable energy generation, and is now headed towards 40% renewable generation by 2025 and 50% by 2030. The legislated VRET provides the power generation industry with the long-term policy certainty needed for new investment in renewable energy projects in Victoria.

The first VRET auction in 2017 – the largest reverse auction ever held in Australia (a reverse auction involves just one buyer and multiple sellers) – has brought forward six wind and solar farm projects that will deliver a combined 928 megawatts (MW) of new renewable capacity, and generate $1.1 billion of investment in Victoria.

Victorian Renewable Energy Target Auction 2 (VRET2)

The Government is investing $12.6 million to fund the design and delivery of a second VRET auction to help meet its legislated renewable energy targets, and to ensure the fulfillment of its pledge to source 100% renewable electricity for all government operations from 2025.  The auction is expected to bring online at least 600 MW of new renewable energy capacity – enough to power Victorian public hospitals and schools, Melbourne’s train network, and a range of other government infrastructure and services.

Renewable Certificate Purchasing Initiative

Over the next decade, the Renewable Certificate Purchasing Initiative will continue to support four new Victorian renewable energy projects through purchasing renewable energy certificates. The successful projects include two wind and two solar facilities.  Around 35 MW of the generation capacity from the new solar projects is linked to the entire electricity load of Melbourne's tram network under the Government’s Solar Trams Initiative.

Energy Innovation Initiative

The Government is providing  $108 million for an Energy Innovation Fund, an Offshore Wind Strategy and funding to accelerate Victoria’s renewable hydrogen industry. The Initiative is intended to support emerging energy proposals in Victoria that are strategically significant and have potential for transformational impacts. These types of projects could lay foundations for new investment, new industries and new jobs – with benefits for all Victorians, regions and local businesses. The fund could also support a range of projects and technologies that have the potential to stimulate longer term energy transition objectives for the state.

Renewable Energy Zones

Accelerated development of Victoria’s six Renewable Energy Zones will unlock new renewable energy investment and support regional economic growth and jobs. The initiative involves $540 million to support the accelerated delivery of Victoria’s Renewable Energy Zones, including measures to address system constraints and to enhance access to the transmission network and planning and support for investment in renewable energy zone infrastructure and system security needs.

Transmission upgrades

The Government is supporting major transmission upgrades, including those identified in the Australian Energy Market Operator’s Integrated System Plan. Its support will include co-funding with the Commonwealth for early works on the Victoria-New South Wales Interconnector West Project.

Victorian large-scale batteries

Government support for three large-scale batteries in Western Victoria, with a combined capacity of 75 MW / 114 megawatt hours (MWh), is improving the reliability and security of Victoria’s electricity supply. In addition, the Victorian Government has fast-tracked the procurement of the 300 MW/450 MWh Victorian Big Battery – the largest lithium-ion battery in the southern hemisphere – to be installed near Geelong and ready for operation by November 2021.

Solar Homes program

More than 135,000 rebated solar panels, batteries and solar hot water systems have been installed under the Solar Homes program since its launch in August 2018. More than 790 MW of new solar photovoltaic (PV) generation capacity has been installed so far, reducing Victoria’s emissions and helping participating households save hundreds of dollars on their energy bills each year. Over its ten-year life, the $1.3 billion program will support 778,500 Victorian households to make the change to renewable energy, and help build a decarbonised energy system. In 2020-21, the Government expanded the Solar Homes program with an additional $85.91 million to provide:

  • 17,500 rebates over three years for households to install batteries (bringing the total Solar Homes battery rebate stream to 18,500 rebates over four years to 2022-23)
  • Rebates for up to 15,000 small businesses over three years to install solar PV on their work premises.

Community Power Hubs

The Community Power Hubs pilot program in Ballarat, Bendigo and the Latrobe Valley has supported the installation of 1.35 MW of new renewable energy across 15 community energy projects, reducing greenhouse gas emissions by 1,839 tonnes CO2-e per year, and saving local businesses and communities around $364,000 in annual energy costs. In 2020-21, the Government expanded the Community Power Hubs pilot program, committing $5.94 million to invest in up to six new hubs in regional Victoria and metropolitan Melbourne to develop more than 25 locally-owned and cost-effective renewable energy projects in partnership with community and private investors.

New Energy Jobs Fund

The $20 million New Energy Jobs Fund has supported 72 projects through grants for industry and communities investing in new energy technologies.

Microgrids and stand-alone power systems

The $13 million Microgrid Demonstration Initiative has provided grant funding through two programs, supporting eight projects with a total value of $43.3 million to date. The Government is also investing in up to three trial sites for microgrids and stand-alone power systems, to improve bushfire resilience and energy reliabllity in fire-affected communities.

Traditional Owners Renewable Energy Program

The Traditional Owners Renewable Energy Program will deliver $1.1 million in grant funding for all 11 registered Aboriginal parties in Victoria. Each Traditional Owner Corporation will be eligible for up to $100,000 in funding to formulate plans to benefit from Victoria’s renewable energy transformation. The program will support empowerment and self-determination of Victorian Traditional Owner Corporations, and aims to increase Aboriginal leadership and representation across all sectors and levels.

Neighbourhood batteries

The $10.92 million Neighbourhood Battery Initiative will fund a range of neighbourhood-scale battery ownership and operational models, to unlock the role that neighbourhood-scale batteries can play in Victoria’s transitioning electricity system.A Consultation Paper has been released to seek views about the opportunities and challenges associated with neighbourhood scale batteries in Victoria.

Fuel switching to reduce emissions and strengthen supply options

Victoria will pursue a range of fuel switching options for our transition to net-zero emissions, including hydrogen and biogas, electrification and establishing the infrastructure for zero emissions vehicles.

Cover of Renewable Hydrogen Industry Development Plan

Gas Substitution Roadmap

Victoria’s Gas Substitution Roadmap will establish a strategic framework for decisions on gas efficiency, electrification and increased use of hydrogen and biogas. The Government will set aspirational targets for 2025 and 2030 for the displacement of natural gas. This will support transition planning for gas markets and long-term planning and investment decisions for gas use in Victorian homes and businesses. It will also identify policy mechanisms for achieving these targets. The roadmap will also support measures to reduce fugitive emissions from the gas supply and distribution system.

Accelerating Victoria’s renewable hydrogen industry

$10 million has been committed to progress the Victorian Renewable Hydrogen Industry Development Plan and take the first step in supporting the emerging hydrogen industry through pilots, demonstrations, industry and policy development and strengthened collaboration. This program will help establish pathways to hydrogen production, use and eventual exports.

Transforming energy demand

Energy efficiency and demand management are among the most cost-effective ways to reduce emissions and energy costs for Victorians. Under this pledge, the Government will accelerate the pace of change by investing $515 million to drive further energy savings and support our transition to a smart, distributed energy system. Energy efficiency also supports jobs growth in trades and supply chains across the state.

Woman turning on airconditioner

Victorian Energy Upgrade (VEU) program

For over a decade, the Victorian Energy Upgrades (VEU) program has helped Victorians cut annual energy bills on average by $110 (for households) and $3,700 (for businesses). It has also led to a reduction of 55 million tonnes of greenhouse gas emissions by giving 1.8 million households and 100,000 businesses access to discounted energy-efficient products and services. Thousands of Victorian households and businesses have made the move to the world’s most efficient lighting technologies – and the next generation of the VEU program will support them to take up other smart energy technologies.

In 2020-21, the Government began supporting a $17.13 million expansion of the Victorian Energy Upgrades (VEU)program, with ambitious targets for 2022 to 2025 to achieve $1.3 billion in investment in energy efficiency and energy management. Over the next five years, VEU will support the installation of around 9 million energy-saving items. Major initiatives will include:

  • Support for energy management information systems, smart thermostats, ceiling insulation and cold rooms, and medium-scale rooftop solar
  • Reforms to the VEU exemption framework to require exempt large energy users to implement energy management systems, delivering 1-3% energy savings per year.
  • Development of new incentives for demand-management activities.

Low cost heating and cooling for 250,000 Victorian households

The Government is providing $335.5 million in support for low-income and vulnerable households to replace old, inefficient, high-cost and high-emissions heaters with high-efficiency reverse cycle air conditioners. Depending on the type of heater being replaced, eligible households are expected to save between $300 and $900 annually on their energy bills while increasing the comfort of their homes. Eligible households will be supported to make these upgrades through the new Home Heating and Cooling Upgrades program delivered by Solar Victoria from 2021.

Upgrading 35,000 social housing properties

The Government will invest $112 million on upgrades to improve thermal performance (with insulation and draught-proofing) and replace inefficient appliances in 35,000 public and community housing properties. This will reduce energy costs for renters and make homes more comfortable.

Minimum energy standards for rental homes

The Government will introduce minimum energy efficiency standards for rental homes covering insulation, draught sealing and hot water, subject to a Regulatory Impact Statement. These new energy efficiency standards will complement the minimum standard for heaters that commenced on 29 March 2021.

7–Star building standards

Victoria has led the way nationally with energy efficiency standards for new buildings. Since 2011, more than 500,000 new homes (roughly 20% of all homes) have been built to 6-Star standard and above. The next step for new homes will be ‘7-Star’ building standards, with changes to the National Construction Code planned to take effect from September 2022. To achieve this target, the Victorian Government will support:

  • Improved thermal performance (from 6-Star to 7-Star) to make homes more comfortable and resilient
  • Strengthened energy performance standards for fixed appliances such as heating and cooling, hot water systems and lighting to make homes cheaper to run and increase demand response capability
  • Design and construction for easy retrofit of solar panels, batteries and electric vehicle charging in apartments and commercial buildings

As part of changes to the National Construction Code, Victoria will remove barriers to installation of efficient electric hot water systems, helping households to capture further benefits from investing in solar panels, and supporting those who choose all-electric new homes. Many new homes built as part of the Government’s $5.3 billion Big Housing Build package will exceed current minimum standards for energy efficiency, including 7-Star thermal performance, solar PV and all-electric appliances where possible. More than 12,000 new social and affordable homes will be built over four years.

Environmentally sustainable development

The Government’s roadmap for the environmentally sustainable development of buildings and subdivisions outlines a program through which the planning system can support reduced energy consumption in buildings.

Business Recovery Energy Efficiency Fund

The Government has committed $31.17 million to support high energy consuming businesses and large emitters to consider – and invest in – a range of energy options to manage present and future costs. The options include energy management systems, energy efficiency measures, demand response initiatives, low-emissions equipment, energy storage and electrification.

Supporting small to medium businesses to be energy smart

The Government will invest $9.1 million to assist businesses to access energy savings opportunities and subsidised upgrades, with targeted incentives for energy-efficiency upgrades.

High performance commercial buildings

New building standards from 2025 will provide opportunities to increase minimum energy performance standards for new and refurbished commercial buildings.

Expanding the clean energy workforce

The Government will invest in expanding the state’s clean energy workforce to help ensure the timely delivery of energy policies and projects, generate local jobs, and advance the transition to a low-emissions economy.

Workers near wind turbines

Training the clean economy workforce.

Under this pledge, the Government will invest $10 million in supporting priority trades to ‘skill up’ for Victoria’s clean economy with a five-year skills strategy, workforce capacity building, targeted training and careers support.

Empowering communities to take action

The Government will support community investment and uptake of cost-effective and low-emission technologies for community facilities.

A family looking at a solar panel

Community Climate Change and Energy Action program

A $4.5 million Community Climate Change and Energy Action program will provide grants of up to $50,000 for community groups to install solar panels, batteries and energy efficiency equipment in community buildings such as sports centres, surf clubs, community centres and kindergartens.

Page last updated: 16/07/21