SYDNEY, Oct 20 (Reuters) - The Labor government of Australia's...

SYDNEY, Oct 20 (Reuters) - The Labor government of Australia's Victoria state said on Thursday it would raise its renewable energy targets and proposed government ownership of future power generation if it wins local elections due to be held next month.

The government said it would take steps to source 65% of its electricity from wind and solar energy by 2030, up from the current target of 50%, and 95% by 2035, effectively replacing dirty fuels from the state's power generation mix.

It said it would also make an initial investment of A$1 billion ($626 million) towards delivering 4.5 gigawatts of power through renewable projects. A Guardian poll published last month showed Labor on track to secure a third term in the state.

That new renewables capacity would be equivalent to the coal-fired Loy Yang A facility operated in the state by AGL Energy (AGL) , Australia's top power producer. AGL said in September said it would shut down Loy Yang A, responsible for a third of the state's electricity, by 2035, a decade earlier than planned.

Labor will also bring back public ownership of energy projects by reviving the State Electricity Commission as an active energy market participant to build new renewable energy facilities, Premier Daniel Andrews said in a statement.

"Big energy companies want to offshore profits - we want to offshore wind. Renewable energy is the future: it's good for our climate, good for lower power bills and good for jobs," he said.

The state will take a controlling interest in the new assets alongside "like-minded" entities, including local pension funds, Andrews said.

If re-elected, Labor will also set an emissions reduction target of 75-80% by 2035, and bring forward a net zero emissions goal by five years to 2045 - more ambitious than the 43% by 2030 and net zero by 2050 target legislated in September by the federal government.

The opposition Liberal party has committed to legislating an emissions reduction target of 50% by 2030, as well as investing A$1 billion for clean hydrogen technology. ($1 = 1.5972 Australian dollars)