Victoria narrows down contenders for offshore wind transmission link, as Spanish giants compete again

VicGrid has unveiled the three consortia left in the running to build transmission lines linking the state’s proposed offshore wind projects with the main grid, and major international companies are leading two of them. 

Spanish energy giants Iberdrola and Acciona are leading two of the consortia, and the Victoria-based AusNet Transmission Group is leading the third contender. 

The winning bid will be named in 2026 to build a 500 kilovolt (kV) double circuit overhead transmission technology, starting 6km onshore near Giffard and connecting to the Loy Yang coal fired power station switchyard.

This part of the project will run through a corridor already identified by VicGrid in 2024 and allow the first 2 gigawatts (GW) of offshore wind to connect to the state’s grid by 2032. 

Each offshore developer will run their own transmission line from their individual project to the connection point at Gifford. 

VicGrid has also settled on a 500 kV line over a 330 kV version, saying the bigger line will require one set of towers rather than two smaller ones, and be more useful once more offshore capacity is connected up to the final 9 GW expected for 2040.

Plans must include engagement, benefits

VicGrid chief executive Alistair Parker said there had been a strong response to its request for expressions of interest. 

VicGrid did not respond to a question before publication about how many applications were sent in for the initial round. 

“The development of this infrastructure will… help create a new industry that will deliver jobs and benefits for the Gippsland community,” Parker said in a statement. 

The consortia will need to outline how they propose to design, deliver, finance and operate the transmission infrastructure.

The proposal must also include how they plan to work with landholders, ensure early engagement with communities and Indigenous groups, and show what benefits will be on offer to the region, Parker says. 

In late 2024 when the first stage of the tender opened, energy minister Lily D’Ambrosio said host landowners would be paid $200,000 per kilometre of transmission on top of existing compensation arrangements.

Renewables open networks to world

Renewable energy zones (REZ) have opened up opportunities for developers with big international network portfolios to muscle into Australia’s tightly held transmission industry. 

Iberdrola’s bidding team is dubbed ‘Gippsland Coast Connect’ while Acciona is handling most of the work in house so named the consortia after itself. Ausnet’s group is called Genesis Partnerships. 

Iberdrola is actively pursuing at least one other REZ contract, for the proposed New England Renewable Energy Zone (REZ) in northern New South Wales. It’s also prioritising network investments in the US and UK for its 58 billion euro budget over the next two years.

Acciona is also leading a consortium pursuing the New England REZ transmission operator contract, and it’s building out a portion of the upgrades required in the Hunter REZ as well. 

Opening up Australia’s transmission networks, which are preserved for monopolies, to a competitive market and international operators is the dream of some experts, who say competition and international experience could make building and operating this infrastructure cheaper.

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