Social licence and emissions cuts to be embedded in Victoria’s new grid plans

The Victorian government wants to embed social and environmental factors into a proposed investment framework for new transmission infrastructure, as it prepares for an overhaul of the state’s electricity grid.

This week, the Department of Environment, Land, Water and Planning kick-started consultation on the framework, conscious that winning broad community acceptance for the new wind, solar, and transmission infrastructure will be critical to the successful replacement of the state’s ageing coal generators.

It is seeking feedback on its proposed transmission investment framework that will guide the creation of new Renewable Energy Zones and how it will manage an accelerating transition to renewables.

The framework will likely establish a state-level grid planning process, akin to a mini-Integrated System Plan that will provide the Victorian government with a much more direct role in planning the state’s future grid.

“To build community support and facilitate the investment needed to enable an orderly transition to renewables, our transmission planning framework should be more strategic, timely and well-coordinated, with meaningful community engagement,” the consultation paper says.

“It is important that our planning and investment settings build confidence among industry and communities to ensure we maximise the benefits of REZ development.”

“Working closely with our regional communities will be critical. Our planning approach should integrate local values and ensure local communities can influence the planning and investment process and directly benefit from regional development opportunities.”

The process mirrors the approach that has already been well advanced by the New South Wales government, which is likewise preparing to establish at least five dedicated Renewable Energy Zones.

The Victoria framework will guide the creation of up to six dedicated renewable energy zones – set to host new wind, solar and energy storage projects – as well as substantial investments in new transmission network infrastructure.

Crucially, the Victorian government says environmental, heritage and social considerations will be embedded within the transmission planning process – which has historically concentrated overwhelmingly on just economic and technical concerns.

“Placing community engagement at the beginning of the process would aim to build a level of acceptance for REZ development and would help to manage the cumulative impacts that communities may feel over time,” the consultation paper says.

“It would also help generators to choose locations that enjoy more community support and may help smooth formal planning approvals processes.”

The framework will likely set expectations for transmission project developers to undertake proactive community consultation on planned infrastructure projects – with the aim to minimise the risk of community opposition to new transmission projects.

There has been a spike in community opposition to new transmission network projects, with some local residents angered by what they see is a lack of meaningful consultation and unsatisfactory responses from network companies to concerns about the environmental and aesthetic impacts of transmission infrastructure.

Opposition has been particularly strong against projects proposing to build new overhead transmission lines, including high-profile campaigns against Ausnet’s Western Victorian Transmission Network Project (WVTNP)which has prompted a tractor protest in Ballarat – and Transgrid’s HumeLink, the latter potentially requiring the destruction of parts of the Kosciuszko National Park.

Under the proposed Victorian framework, projects will also be assessed on their ability to share development benefits with local communities, including their ability for local job creation, local procurement, and support for local community groups.

Of significant interest for project developers will be Victoria’s proposed approach to managing grid access, as developers will be hoping to avoid the congestion and curtailment issues that have already been evident in the state’s Western region.

The Victorian government is considering two different approaches to managing grid access in Renewable Energy Zones, with the aim of avoiding the network congestion and resulting project curtailment that has already plagued parts of the Victorian grid.

The simplest approach, a ‘physical access model’ would impose a hard limit on the amount of generation capacity that can connect to the grid within a designated renewable energy zone.

An alternative’ financial access model’ would provide preferential treatment to the initial batch of projects selected to join a Renewable Energy Zone, with subsequent projects allowed to connect to the grid but liable to pay compensation to the original participants should curtailment occur.

The government’s consultation paper suggests the second model could allow ongoing investment in new generation infrastructure while incentivising a greater diversity of project technologies, particularly projects that can operate flexibly and avoid congestion.

However, the government’s consultation paper suggests the government may pursue the ‘physical access model’ due to its simplicity and greater compatibility with proposed national reforms.

“If new access arrangements are to be adopted for Victorian REZs, it is proposed that the physical access model may better suit the circumstances in Victoria,” the consultation paper says.

“This assessment has given particular regard to needing to adopt an access model that is suitable for adoption within a meshed network.”

“The benefits of the physical access model are that it is considered the simplest form of access arrangement to implement, it can co-exist or conform with national access reforms and is consistent with other jurisdictions.”

Michael Mazengarb is a Sydney-based reporter with RenewEconomy, writing on climate change, clean energy, electric vehicles and politics. Before joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.

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