All provisions of the Constitution Amendment (SEC) Act 2024 (Vic) came into effect on 15 November 2024, enshrining the State Electricity Commission (SEC) in Victoria’s constitution.
In summary, the objectives of the SEC (set out in section 105 of the Constitution Amendment (SEC) Act 2024 (Vic)) are to:
- Support the transition of Victoria’s electricity system to net zero.
- Generate, purchase and sell electricity in Victoria.
- Own, operate and participate in the operation of renewable energy generating / storage systems and facilities.
- Develop, support and participate in the development or investment in renewable energy generating / storage systems and facilities.
- Supply energy-related products or services to energy consumers in Victoria.
- Develop and invest in strategic renewable energy generation assets necessary to maintain Victoria’s energy system, security and reliability in the long term.
As of November 2024, Victoria’s renewable energy targets are as follows:1
| Targets | By 2025 | By 2030 | By 2032 | By 2035 | By 2040 |
| Percentage of electricity generated in Victoria by renewable energy sources or by converting renewable energy sources into electricity of: | 40% | 65% | – | 95% | – |
| Energy storage facilities in Victoria to have a combined capacity of: | – | 2.6GW at any time | – | 6.3GW at any time | – |
| Victoria is to have the capacity to generate offshore by converting wind energy into electricity not less than: | – | – | 2GW | 4GW | 9GW |
To achieve these targets, the SEC released its Strategic Plan for 2023-2035 which sets out the SEC’s four-step investment decision-making cycle, being:2
- Assess energy market needs.
- Apply investment criteria aligned to guiding principles.
- Implement suitable investments.
- Monitor portfolio performance.
The SEC has identified the market need to increase storage capacity as a part of both its near-term and longer-term strategy, as depicted below:3
The SEC’s Strategic Plan also discloses its investment criteria, which aims to balance the following considerations:4
| Criteria | Details |
| Local jobs and capabilities | Extent to which local jobs are directly and indirectly created |
| System value | Extent to which investments support a reliable, renewable energy electricity system |
| Sustainable financial returns | Expected risk-adjusted financial returns |
| Price pressure | Impact SEC will have on the cost of energy to consumers |
| Additionality | Extent to which investments are additional to what the market would otherwise provide |
| Equity | Extent to which the SEC promotes equitable access to renewable energy and alleviates energy-related challenges for vulnerable populations |
| Deliverability | Scale of renewable generation and storage capacity enabled by the SEC |
As stated by the SEC chair Simon Corbell: “As a government owned renewable energy company, the SEC can invest together with private sector partners before market signals are strong enough to incentivise others”,5 the SEC is anticipated to play a pivotal role in accelerating the transition in Victoria.
The Hamilton Locke New Energy team is available to discuss the role of the SEC and investment opportunities in renewable energy projects in Victoria.
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
1Renewable Energy (Jobs and Investment) Act 2017 (Vic) ss 7, 7A and 7B.
2State Electricity Commission, Victorian Government, Strategic Plan 2023-2035 (November 2023) 24.
3Ibid 25.
4Ibid 23.
5State Electricity Commission, Victorian Government, SEC back to accelerate Victoria’s transition to renewable, affordable energy (29 August 2024) <https://www.secvictoria.com.au/news/sec-back-to-accelerate-victorias-transition-to-renewable,-affordable-energy>.
