Fed up with waiting for a national renewable energy target, Victoria is going it alone.
Legislation to lock in Victoria's renewable targets at 25 per cent by 2020 and 40 per cent by 2025 was introduced into parliament on Wednesday.
"What we know is in the absence of policy certainty and leadership from Canberra, it's up to states like Victoria to fill that void, to make sure that we're doing everything we can to drive the transition that is incredibly important," Premier Daniel Andrews told reporters.
Energy Minister Lily D'Ambrosio called the targets "ambitious yet achievable".
"This is the policy certainties and the right policy that industry have been deeply searching for to make sure they can make the right decisions to invest," she told reporters.
To further encourage investment, a renewable energy auction will be opened to industry to compete to build sources producing up to 650MW - enough to power 389,000 households.
The first auctions open in October and are forecast to bring forward $1.3 billion in investment.
Tenders have been awarded to build two new solar farms in the Sunraysia district and near Shepparton that will provide 138MW to power Melbourne's tram network.
The government says modelling shows bringing in more renewables will cut power costs by about $30 a year for households, $2500 for medium businesses and $140,000 for large companies, by 2034-35.
The savings are based on scenarios "chosen by the Victorian government".
The future of coal is not mentioned in the plan, but Ms D'Ambrosio told reporters it would play a role "for many years to come."
During parliamentary question time Opposition Leader Matthew Guy said the government could only achieve its 2020 target with the closure of Hazelwood and asked if Yallourn W or Loy Yang A would close to meet the 40 per cent target.
"The simple answer is no, you are absolutely wrong," Ms D'Ambrosio replied.
Mr Guy later told reporters energy reform was needed immediately to ease the financial pressure on consumers.
However he also said the Victoria should wait for a federal target because a state-based one would put it at a competitive disadvantage.
"It appears to be political vanity at great expense to consumers," he said.
