VicGrid has released its draft 2025 Victorian Transmission Plan for community and industry feedback, ahead of its official release later in 2025.
The plan sets out how much more wind and solar energy Victoria is expected to need over the next 15 years and identifies the most suitable locations for new renewable energy and transmission projects.
As the government body responsible for planning and developing the state’s renewable energy zones, VicGrid said the Victorian Transmission Plan is necessary to keep the lights on and keep energy costs affordable as the state’s coal-fired power stations close.
In response to significant community and industry consultation conducted in 2024, the draft plan identifies proposed areas for the renewable energy zones.
In total, less than one per cent of the state will be needed for onshore renewable infrastructure, and the proposed renewable energy zones cover about seven per cent of the state. However, not all this land will host energy infrastructure. VicGrid said many of the projects will also be able to coexist with other land uses.
Landholders in renewable energy zones will be able to choose whether they host new wind or solar farms on their properties. VicGrid said it is the landholder’s decision and encouraged them to discuss this with their neighbours.
All proposed projects will continue to be subject to planning and environmental approval processes.
The seven proposed onshore renewable energy zones identified in the plan were chosen for their suitability to host renewable energy projects, taking into account feedback from communities, landholders, Traditional Owners, the quality of wind and solar resources, existing land uses and how projects can connect to the grid.
The proposed onshore renewable energy zones include the Central Highlands, Central North, Gippsland, North West, South West, Grampians Wimmera and Wimmera Southern Mallee.
A proposed new shoreline renewable energy zone in Gippsland is also set out, as well as a designated area that enables offshore wind developers to determine suitable routes to the transmission connection hub, while minimising impacts on nearby towns and landscapes.
VicGrid said it has listened and learnt from the agriculture industry to ensure the draft plan minimises impacts and focuses development in areas where farming and renewable energy are believed to be more compatible.
The government body also said it is working to ensure new transmission is built in the right places and at the right time to reduce the total amount of new transmission needed and keep costs as low as possible for Victorians.
VicGrid has prioritised upgrades to existing transmission lines wherever possible to minimise impacts on landholders and communities and to limit cost impacts on consumer power bills.
The Victorian Transmission Plan identifies the need for four new transmission lines in addition to projects already underway.
The new projects include an additional line to support future offshore wind energy in Gippsland, a second line from South West Victoria to Melbourne, a second line between Yallourn and Hazelwood and a short line between Truganina and Deer Park in Melbourne.
Where possible, VicGrid said it will investigate the use of or expansion of existing easements for any new transmission lines.
Landowners who host transmission are expected to receive compensation under the Land Acquisition and Compensation Act. The Victorian Government has also introduced an additional payment of $8000 per kilometre per year to recognise the important role landholders play in hosting energy infrastructure.
Projects inside renewable energy zones will be required to contribute to Renewable Energy Zone Community Energy Funds, which have been subject to public consultation and will be finalised before the publication of the final Victorian Transmission Plan. These funds are expected to be in addition to benefits provided by individual proponents.
Projects outside of a final renewable energy zone will also be required to meet standards of community engagement and benefits set out by the government and will be subject to a Grid Impact Assessment. As part of this assessment, the project must prove it will not have a negative impact on other projects inside the zone by limiting their generation and taking up capacity on the grid.
The Renewable Energy Zone Community Energy Funds are expected to be used to improve energy supply, reliability and affordability for communities, households and businesses, which could include things like solar panels, microgrids and cheaper energy. VicGrid said it will work with local councils and communities to understand their priorities for funding.
The final Renewable Energy Zone Community Benefits Plan, including estimated amounts, will be published alongside the final Victorian Transmission Plan.
VicGrid CEO, Alistair Parker, said the transition to renewable energy will benefit all Victorians and boost regional economies, but it needs to be done right with long-term planning, certainty for industry, genuine consultation and real benefits for host communities, landholders and First Peoples.
“We are changing the way energy infrastructure is planned to give communities a real say from the beginning of the process and working closely with key industries like agriculture to ensure they continue to thrive,” he said.
“Victoria has already taken big steps in the transition to renewable energy with 40 per cent of the state’s power coming from renewables.
“Through the Victorian Transmission Plan, we can make sure we have the right infrastructure in place to keep the lights on and deliver affordable renewable power to homes and businesses as coal-fired power closes down.”
Industry response
The Clean Energy Council (CEC) welcomed the release of VicGrid’s 2025 Victorian Transmission Plan and emphasised the importance of a strong grid and clear regulatory settings that will provide certainty for community and clean energy investors.
CEC General Manager of Markets, Operations and Grid, Christiaan Zuur, said it’s crucial that the final plan provides certainty for Victorians in proposed renewable energy zones as well as industry, which is expected to invest in the new generation necessary to replace Victoria’s ageing coal generation.
“We welcome the plan’s focus on providing certainty for communities, including community benefit arrangements, as well as providing clarity and confidence for the much-needed investment in new renewable energy generation and energy storage.”
Mr Zuur also said there’s a lot of detail that needs to be considered and designed to ensure the plan delivers on these objectives.
“This includes ensuring that the renewable energy zones have sufficient capacity to unlock the enormous requirement and potential for new generation and storage, and provide clear and fair approach to network access and treatment of projects that have been developed outside of the designated renewable energy zones,” he said.
Mr Zuur said getting renewable energy zone design right is a difficult task and VicGrid and the Victorian Government are to be commended for their work on this to-date.
“The Clean Energy Council is committed to working collaboratively with VicGrid to get the design of Victorian renewable energy zones right over the coming months and years.”
People can have their say on the Draft 2025 Victorian Transmission Plan on Engage Victoria or by attending one of the many in-person hubs and events around Victoria.
