Victoria's ambitious renewable energy targets of 40 per cent by 2025 will be cemented in law, with legislation introduced to State Parliament to protect their future.

The Andrews Government is claiming the targets and investment in new projects will help reduce power bills.

The Government said its modelling — which it has not released yet — showed on average, household power bills will drop $30 a year.

For medium business, a saving of $2,500 is promised, and for larger companies $140,000 in savings are expected.

But Energy Minister Lily D'Ambrosio was unable to say when the savings would begin and how long it would last for.

The renewable targets of 25 per cent by 2020 and 40 per cent by 2025 are being pitched by Labor as not only clean energy generators but also a driver of hundreds of new regional jobs.

As part of the package, the Government wants the sector to build 650 megawatts of green energy generation in what it calls a "reverse auction".

Under the scheme, industry is asked to come forward with proposals to build renewable energy, and the project with the best value for money and local job and procurement pitches will be awarded a contract.

Six-hundred-and-fifty megawatts of energy is the equivalent of powering 389,000 homes.

The Government said the auction was expected to stimulate up to $1.3 billion of investment and create 1,250 construction jobs over two years, and 90 ongoing jobs.

Speaking on Wednesday morning, Premier Daniel Andrews also announced two new solar farms, which would power the state's trams, will be built near Numurkah and Bannerton, near Robinvale in the north-west.

Mr Andrews said the state's renewable energy target would see a 16 per cent reduction in Victoria's electricity sector greenhouse gas emissions by 2034-35.

'States to make up for lack of leadership from Canberra'

The Greens said any new renewable energy projects needed to be accompanied by the closure of coal.

"The whole point of renewables is to phase out dirty coal, which the Labor Government is not doing," MP Ellen Sandell said.

"Now we have new renewables projects coming on line, we must plan for the sensible phase out of old, polluting coal stations."

Opposition Leader Matthew Guy said the plan would not solve soaring energy prices, and any renewable energy target must be through a national approach.

"Daniel Andrews' renewable energy target is political vanity at the expense of consumers," he said.

"The reality is that power bills will rise as a result of a state-based renewable energy target - no-one believes Government spin that they won't."

But Mr Guy would not say if an elected Coalition government would repeal the renewable energy target or what the Opposition's plan was to reduce energy costs.

Australian Energy Market Operator chief executive Audrey Zibelman welcomed the plan.

"The promise of the future can happen. The emergence of renewables can be and will be, if operated correctly, the choice that is not only best for the environment but best for affordability and can also produce sustainable jobs," she said.

Mr Andrews said he was confident the laws would pass Parliament, with key Upper House crossbencher James Purcell at the announcement.

He also took a swipe at the Turnbull Government for failing to implement a long-term renewable energy target.

"In the absence of policy certainty and leadership from Canberra, it is up to states like Victoria to fill that void to make sure that we are doing everything we can to drive the transition that is incredibly important to create jobs, to create more electricity in the market and to drive down prices,'' Mr Andrews said.

The Premier also hailed the scheme as a "fantastic outcome" for regional jobs.