Important developments in Victoria’s energy transition: VicGrid releases draft guidelines and renewable energy zone study area
By Meg Lee and Sal Lennon
Important new developments are occurring in Victoria’s energy transition, which include the development of the 2025 Victorian Transmission Plan (2025 VTP), the release of associated Guidelines and the roll out of new Renewable Energy Zones (REZ) by VicGrid[1].
Developing the 2025 VTP involves classifying areas that are suitable for investigation for future renewable energy zones. Land across Victoria has been classified on a map, which is one of the documents VicGrid has recently released for consultation (Draft REZ Map).
The roll out of the REZ is intended to provide focus areas for renewable energy developers to locate projects; however, local communities and landowners affected by the zones will be keen to understand the impact on their land and rights. The stated intention of identifying the REZ areas is to coordinate development and ‘change the way’ energy infrastructure is planned so as to consult with communities from the beginning of the process to realise local benefits, minimise impacts and deliver affordable power. Consultation is open on the Draft Guidelines until 25 August 2024 and the Draft REZ Map until 30 September 2024.
Draft Guidelines
In parallel with the Draft REZ Map, VicGrid has also released the Draft Victorian Transmission Plan Guidelines (Draft Guidelines) for consultation.
The Draft Guidelines include the methodology that will be used to develop the first 2025 VTP (and subsequent VTPs). In summary:
- Identify areas for investigation – Using energy market modelling, VicGrid will identify the most suitable places to explore renewable energy generation projects within the study area (we discuss the study area further below).
- Determine the desired generation capacity – For each area being investigated, VicGrid will identify how much energy can be produced, what storage capacity would be appropriate and when that generation and capacity could be brought online.
- Identify what upgrades the transmission network needs – An assessment of what additional or upgraded transmission infrastructure is needed to support the additional generation will be done.
- Propose a sequence of transmission network improvements – Different project combinations will be assessed and VicGrid will prepare a draft ‘optimal pathway’ for a combination of transmission projects. This will be consulted on before the 2025 VTP is finalised.
- Finalise what projects need to be delivered in the next 10 years – Following feedback on the draft ‘optimal pathway’, VicGrid will identify the transmission projects needed in the next 10 years. Following the publication of the final 2025 VTP, detailed design processes will commence to refine the projects, and more in-depth engagement with stakeholders will occur.
The Draft Guidelines provide that, following the release of the final 2025 VTP, which is proposed to be in place by 31 July 2025,[2] it is intended that the next VTP will be released in 2027. It is intended that subsequent VTPs will be released every four years, to provide some flexibility to react to changed circumstances.
Proposed treatment of projects already underway – Southern Ocean and Gippsland offshore wind areas
The Draft Guidelines deal briefly with transmission projects that are currently underway. For example, the Australian Government has declared two offshore wind areas off the coast of Victoria, near Gippsland, and in the Southern Ocean near Warrnambool, which each require new transmission projects to connect these areas to the grid.
As set out in the Draft Guidelines, it is intended that the 2025 VTP will have regard to both offshore and onshore generation and transmission projects defined and committed to before the 2025 VTP process. However, it is expected that the future pipeline of energy transmission projects will generally be planned through the subsequent VTPs.
There are no further details provided in the Draft Guidelines on this issue and it may be a topic that arises through consultation, particularly the need to gain clarity around which projects in Victoria will be considered to have been defined and committed to before the 2025 VTP process.
Draft REZ Map
As part of developing the 2025 VTP, a broad geographic area for further investigation for renewable energy (referred to as the study area) will be considered. The study area is shown on the Draft REZ Map and the study area was determined through a statewide strategic land use assessment. It is understood that communities have already had the opportunity to give some input into this process through the Renewable Energy Planning Survey and interactive map, which was open for consultation between November 2023 and February 2024.
The study area will be narrowed down as the 2025 VTP is developed, to identify the proposed REZ areas. We have outlined this process further below.
The Draft REZ Map classifies land throughout Victoria into three tiers of priority, based on its potential to host new energy generation, storage and transmission infrastructure.
Figure 1: Draft Victorian Transmission Plan Guidelines Geographical areas for further investigation
These relevant tiers are outlined as follows:
Tier 1 | Land comprises sites with a combination of high opportunities and low constraints. VicGrid has identified that Tier 1 land will be prioritised for investigation for future renewable energy generation and transmission infrastructure. |
Tier 2 | Land is identified as being suitable for investigation, but is of lower priority than Tier 1, due to relatively lower levels of opportunity and relatively higher levels of constraints. |
Tier 3 | Land remains available for investigation but may be a significant distance from existing transmission infrastructure, or otherwise constrained. |
The Draft REZ Map also identifies those areas that the State Government will not be prioritising, including:
Deprioritised Areas | Areas have been identified as having high constraints, low opportunities, or a combination of the two. |
Avoidance Areas | These areas include locations considered to be sensitive, for reasons such as existing land uses or landscape and biodiversity value. |
The Draft REZ Map does not provide a granular level of detail. The tiers (detailed above) appear to have been applied on approximately a hectare (10km x 10km) scale. Depending on where a particular landholding is, it may not be possible to ascertain a tier that has been applied.
How the REZ study area will evolve
As part of the 2025 VTP development, further investigations will be undertaken within the study area. Draft proposed REZs will be included in the draft 2025 VTP. Following industry and community consultation, proposed REZs will be included in the final 2025 VTP. Following that, there is a statutory process for each REZ to be declared.
The REZs that will ultimately be declared by the Victorian Minister for Energy following the final 2025 VTP are more refined areas that will be prioritised for renewable energy development in the coming 10 years.
All proposed projects (both within and outside REZ areas) will continue to be assessed on a case-by-case basis and will be subject to relevant planning and environmental approvals. For example, a planning permit issued under the Planning and Environment Act 1987 (Vic) will still be required to establish or expand a renewable energy facility; however, it is expected that there will be further reforms to follow of the environmental assessment process to provide more streamlined approvals for projects setting up in the final REZ areas. The Draft Guidelines state that the declared REZs will provide benefits for communities and energy developers by improving coordination of infrastructure projects to minimise social and environmental impacts.[3]
What is VicGrid seeking feedback on?
View the Draft Guidelines, Draft REZ Map and other materials.
There are opportunities to provide direct feedback on the Draft REZ Map via the online form, particularly regarding places within the study area that should be protected and avoided, or, alternatively, areas that should be prioritised for investigation.
Please get in touch if you have questions or would like any assistance with making a submission.
[1] VicGrid is a division in the Victorian Department of Energy, Environment and Climate Action (DEECA). It co-ordinates the overarching planning and development of Victoria’s Renewable Energy Zones.
[2] See section 1.2 of the Draft Guidelines. This is required under section 60(1)(a) of the National Electricity (Victoria) Act 2005.
[3] Draft Guidelines, page 18.