Melbourne’s trams network will soon be powered by the first large-scale solar plant to be built in Victoria.
The solar plant, which will be completed by the end of 2018, is expected to be located in Victoria’s north-west.
The state government announced on Thursday that the solar plant would produce 75 megawatts of power, with about half of that production to be linked to the tram network.
Energy, Environment and Climate Change Minister Lily D’Ambrosio said the government would use its purchasing power as a “large energy consumer” to boost investment in renewables.
The project is expected to create 300 new jobs. The tender to construct the solar plant will open in the first half of this year.
Ms D’Ambrosio said 35 megawatts of power was sufficient to cover the energy needs of 410 trams in the Melbourne network.
She said the solar power arrangement was “notional” but the growth in renewable energy would be sufficient to cover the tram network’s needs.
The energy produced by the plant will flow into the broader electricity system. But the government will buy so-called renewable energy certificates from the plant, which help to give it financial certainty.
Renewable power producers can sell both electricity and renewable energy certificates giving them an additional potential revenue stream.
Ms D’Ambrosio would not be drawn on how much the project was likely to cost. She said money had been put aside in the budget that would cover the cost of building the plant.
Ms D’Ambrosio also batted away questions about whether the solar project would be more expensive than using existing base load power.
“The more renewable energy that comes into the system actually puts downward pressure on electricity prices.”
The tender process will be open to projects across the state but Ms D’Ambrosio said solar energy had a “particular advantage” in north-eastern Victoria.
Environment groups welcomed the move. Friends of the Earth said the project would help the Andrews government meet its renewable energy target of 40 per cent by 2025.