THE state government has backed down on its election promise for the revived SEC to take majority ownership in each renewable energy project it funds, The Age newspaper has reported.

The SEC’s first project, announced in late November, was a $245 million investment – more than a quarter of its $1 billion investment budget – to help build a $1 billion battery Hub at Melton. The Hub, which will comprise three battery components, is a partnership with the renewable energy investor Equis Australia. The SEC’s $1b budget aimed to build 4.5 gigawatts of new renewable energy generation and storage projects.

The Age, quoting sources, reported that the SEC’s strategy was quietly altered after an expert panel identified difficulties in meeting the government’s initial election pledge. The government panel found a $1b budget was insufficient for larger scale projects and the SEC would find it difficult to identify smaller partnerships where private companies seeking financial returns would accept a majority government investment.

“There was an initial vision for the SEC that promised a lot, but the details were to be ironed out later. Once the commercial realities of the energy market entered the picture, that vision was bound to change,” one source told The Age.

Before the election, a government press release said the SEC would deliver “government-owned renewable energy to drive down power bills and put electricity back in the hands of Victorians”. Another release said the state would have a “controlling interest in each of these projects”.

Tennant Read, the director of climate change and energy at the Australian Industry Group, told The Age that the SEC could have potentially put $1b into a majority share on a project, but this would limit the ability to make commercial returns and reinvest those profits.

“A billion dollars of capital from the Victorian government, it can be useful (but) it can only stretch so far,” he said.

“One way to make a difference is to take majority stakes and sort of call the shots. Another way to make a difference is to provide a capital cushion that’s willing to absorb some of the risks … unlock more projects than the private investors would have been able to on their own.”

The Age said the SEC’s 10-year strategy document from last October, released after the expert panel’s report, avoids committing to majority ownership and instead refers to “critical system gaps” and a bid to “catalyse investment in wind and solar”. The Age said without a controlling share in renewable energy projects, the state may have limited power to influence decisions about where power is to be sold.

The Energy and SEC Minister, Lily D’Ambrosio, told The Age in November that the SEC’s controlling interest would be across a portfolio of projects. It would build to a 51 per cent share across its $1b in funding between now and 2035.

“We’ve always said that the SEC will have a controlling interest in its portfolio of projects. And we’re going to be doing that,” she told The Age.

The Opposition energy spokesman, David Davis, said the government had known its pledges for the SEC, including majority ownership, were a “pipe dream” before the state election.

“They went ahead with the lie anyway,” he told The Age.