VicGrid has released the 2025 Victorian Transmission Plan (VTP), which will guide transmission planning in Victoria over the next two years, reflecting projected renewable energy development patterns up until 2040. This plan represents the first comprehensive transmission strategy prepared under the Victorian Transmission Investment Framework and sets out the pathways for integrating new renewable generation and new energy loads into the state’s grid.
Renewable Energy Zones have changed
The 2025 plan has expanded Renewable Energy Zones (REZ) boundaries to recognise industry feedback that larger REZ footprints are essential to support commercially and technically viable projects. Two of the originally proposed REZ have been consolidated, reducing the total from seven to six. The addition of a (seventh) shoreline zone in Gippsland designed specifically for connection to offshore wind projects is a pragmatic inclusion.
The generation mix assumptions in the final plan remain heavily reliant on offshore wind, with the “optimal development pathway” continuing to model 9 GW of offshore generation over the next 15 years. As we noted during consultation on the draft, this is an ambitious target given the development hurdles facing the technology in an Australian context. At the same time, modelled onshore generation targets for some regions remain conservative.
A range of development scenarios
The 2025 plan includes three development pathways, all delayed by one to three years behind the optimal pathway in the draft:
- Scenario 1: an optimal pathway reflecting the energy transmission ‘step-change’
- Scenario 2: reflecting high future electricity demand driven by the expansion of industries such as data centres, green aluminium and hydrogen production
- Scenario 3: almost identical to Scenario 1 - except delivery of transmission infrastructure is delayed up to a year by a raft of contributing factors.
Though the 2025 VTP provides clarity on the regulation of Victoria’s energy transition and associated transmission upgrades, it leaves many matters up in the air. The reliance on offshore wind and the modest targets for some of the onshore REZ continues to raise questions about whether transmission development is appropriately sized under the Scenario 1 pathway.
How will Victoria’s transmission infrastructure be delivered on time?
The introduction of alternative scenarios is welcome and shows that the state government will keep transmission planning flexible. What’s missing is the long-term certainty that developers need to encourage significant new development in REZ that are approaching their generation targets under the Scenario 1 pathway.
It is unclear how these alternative development scenarios will influence top-down planning of transmission infrastructure by the state government if the plan has not positioned this as an optimal development outcome. Further, it doesn’t provide the certainty needed to invest in onshore generation in regions where “Scenario 1” targets are approached.
The specific mechanisms to enable timely coordination of critical transmission infrastructure, generation and storage projects are not fully addressed. The need to build transmission infrastructure quickly is a key challenge to practical implementation.
More guidance is imminent
The 2025 plan signals the release of a revised Community Engagement and Benefit Sharing in Renewable Energy Development in Victoria Guide in late 2025. This will replace the 2021 guide, and in a major change, extend benefit-sharing considerations to transmission projects.
The release of the Access and Connections Consultation Paper and Draft Grid Impact Assessment Guidelines later this year will also be of keen interest to developers. These documents should provide long-awaited detail on VicGrid’s proposed REZ access framework. We note that the Grid Access Agreements (the test applying to projects outside the REZ) will be in effect a two-pronged assessment of grid capacity and social licence. The detail on access limits and impact assessments will be crucial for developers seeking to progress projects with commercial confidence, and EMM will be interested to see if this deters prospective developers or provides the certainty to pursue development in Victoria.
VicGrid will update the VTP in 2027 and every four years after, or more often if required, providing an opportunity for further refinement and development certainty.
EMM can help with your decision making
We encourage renewable energy and storage developers in Victoria to consider how the 2025 VTP and the forthcoming draft supporting policy may affect their development pipeline and investment decisions. EMM has significant experience navigating REZ and transmission frameworks in both NSW and Victoria, and we would welcome the opportunity to assist with assessing the implications for your projects or in preparing submissions to upcoming public consultation.
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