A plan to return part of Victoria's power network to public hands and run it almost entirely on renewables has been blessed by Australia's energy market operator, but slammed within the private sector.
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The Victorian Labor government has pledged to revive the State Electricity Commission if it wins the state election next month.
Under the proposal, Victoria would spend $1 billion on renewable energy projects to create 4.5 gigawatts of power to replace lost capacity from the early closure of a coal-fired power plant in the Latrobe Valley.
The renewable energy projects would be built by the commission and 51 per cent owned by the Victorian taxpayer, with the super industry seen as the preferred investor for the 49 per cent minority stake.
At least $20 million would be spent on setting up the SEC, which will have an office in the Latrobe Valley town of Morwell.
"One power station is closing. Many smaller power stations will take its place," Premier Daniel Andrews told reporters on Wednesday.
"Those power stations won't be for profit; they'll be for people."
In September, energy giant AGL announced it would close its brown coal-fired Loy Yang power plant by 2035, up to 10 years earlier than planned.
The nearby Hazelwood coal-fired station closed in 2017 and is being progressively demolished.
Labor has also vowed to increase Victoria's emission reduction 2030 target from 50 per cent to 65 per cent, and set a 95 per cent goal by 2035.
It would also legislate an emission reduction target of 75 to 80 per cent by 2035, and bring forward the state's net-zero commitment by five years to 2045.
Energy Minister Lily D'Ambrosio said the grid overhaul would not affect Victoria's capacity to contribute to the national energy market.
"We continue to be the biggest net exporter of electricity to the rest of the country. That will continue to be the case," she said.
Mr Andrews described the national energy market as broken, citing the wholesale market twice being suspended amid winter's power price crisis.
The Victorian energy network was privatised in the 1990s by the Kennett Liberal government.
Victoria Energy Policy Centre director Bruce Mountain said private energy companies had since been funnelling profits to shareholders, to the detriment of customers.
"This is a break-glass moment," he said.
Financial analyst Tim Buckley said Victoria's 13-year transition to 95 per cent renewables was feasible and would lower power bills.
"As we build out more supply of very cheap, variable renewable energy - firmed by batteries and so on - we will see the electricity price halve over the next decade," the Climate Energy Finance director told AAP.
"Back to where it was two years ago before this rampant hyperinflation of all fossil-fuel commodities."
The Australian Energy Market Operator has backed Labor's proposal, saying that it builds on Wednesday's $3.8 billion Marinus Link deal between the federal, Victorian and Tasmanian governments.
"Recent government announcements will contribute to the investment needed in renewable energy, firming capacity and transmission to maintain reliable, secure and affordable energy," AEMO chief executive Daniel Westerman said.
But Australian Energy Council chief executive Sarah McNamara branded Victoria's move a "retrograde step" and said it will "destabilise future investment plans".
Alinta Energy, which owns the Latrobe Valley's Loy Yang B coal-fired power plant, wants to know how the government intends to manage the cost of the expedited renewable energy transition.
Australian Associated Press
