VicGrid makes community engagement a condition of grid access

Victoria wants to make community engagement a condition of winning grid access for renewable energy projects, with bare minimums laid out in draft rules released on Tuesday.

The state’s draft grid access rules stipulate “minimum expectations” for talking to communities and go into granular detail about what those minimums look like. 

These include that community talks must start before planning applications are lodged, bans on non-disclosure clauses for landowners, and requiring developers to set up a complaints process.

But, importantly, meeting these standards is now a condition for getting grid access. 

“These new arrangements set the rules for solar, wind and battery projects seeking to access the Victorian grid both inside and outside renewable energy zones (REZs),” says VicGrid CEO Alistair Parker.

“Clear rules about access to the grid are crucial to give industry the certainty it needs to invest in new renewables in Victoria.”

VicGrid released three documents on Tuesday for public consultation that will make up the Victorian Access Regime, which will guide how projects connect to the grid. 

The new rules will effectively cancel out the current National Energy Market-wide open access regime, with VicGrid saying it’s creating challenges for developers in choosing where to invest and for communities through uncoordinated development.

Consultation will be open until November 5, and VicGrid hopes to have its Victorian Access Regime start in mid-March 2026.

Even though the access rules are more prescriptive than anything tried to date in Australia, anything that spells out what the clear expectations are will give greater certainty, says Climate Energy Finance director Tim Buckley.

“Ultimately we need to get projects approved. Having greater certainty and a greater understanding of what the rules of engagement are, is better for everyone,” he told Renew Economy.

“We’re not moving fast enough. We need 12 gigawatts (GW) of variable renewable energy every year until 2030 to meet our targets, so hopefully the granularity is a good step forward to unblocking that pipeline.”

Bare minimum engagement

The three draft documents cover the grid impact assessment (GIA) for projects outside REZs, community engagement and social value guidelines updated from the 2021 original, and an access and connection consultation paper. 

Of the three, the community engagement guide has the most eyecatching detail. 

From the beginning developers will need to show how they meet the minimum standards, but VicGrid is promising to continue monitoring projects over time. 

Failing to comply with the guide over time could see projects kicked off the grid or see unspecified penalties. 

The guide lists the groups onshore and offshore energy developers must meet with “at a minimum”, how engagement should work including tailoring it for local context, priorities and needs, how near neighbours should be treated, and expectations for how they speak with First Nations peoples. 

Among the detailed minimum requirements are expectations that have clearly picked up on current fears. 

One example is decommissioning.

The guide doesn’t specifically say a decommissioning bond or fund should be created, something farmer groups have begun advocating for, but does say agreements need to outline what the financial safeguards and protections for landowners are. 

What the guide specifically doesn’t do is say how much developers should pay into a shared benefit fund, unlike New South Wales (NSW) did last year.

“There is no prescriptive model for developing this budget,” the draft guide says. 

“The budget may depend on various factors such as the technology type, scale, local context, community interests and commercial considerations. Some initiatives may also take the form of in-kind contributions through skilled volunteerism and technical assistance.

Criticisms of the NSW model are that it can come across as a bribe. 

Instead, VivGrid’s preferred community agreements could include anything from community energy initiatives to offering communities the opportunity to invest in projects, community capacity building or pro bono technical skills such as engineering for community projects.

The grid access guidelines will dovetail with legislation setting up Victoria’s new rules for transmission lines, which do set dollar figures for how much landowners get paid.

The VicGrid-enabling legislation passed earlier in September to much fury over fines for landowners who prevent access for transmission companies, but also brought in big payments for access.

It follows VicGrid’s 2025 draft community benefits guidelines for transmission companies.

Two tests 

Victoria’s small REZs won’t prohibit projects from being planned in the rest of the state, but they will need to go through a two-part test.

Developers get one chance to revise after getting VicGrid’s advice.

The first part is a test of whether the project will excessively curtail the network within a REZ, with a 20 per cent curtailment being a proposed threshold. 

The draft suggests that funding network improvements, adding or upsizing a battery in the design, or voltage control devices such as static VAR compensators are options developers can take to mitigate network curtailment.

If a project passes this test the developer has to show it’s complied with VicGrid’s minimum community engagement expectations.

“The GIA application will need to contain a community, landholder and Traditional Owner engagement and benefits plan,” the draft GIA says.

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