Victoria scraps contested renewable zone, says region has limited capacity for more solar and wind

The Victorian Labor government has cancelled the proposed Central-North renewable energy zone (REZ) on the grounds that the region already hosts “significant renewable energy” projects, on a grid with limited capacity for more.

The Central-North REZ was the last undeclared zone of seven, and split into two areas between Bendigo and Glenrowan along a 220 kilovolt (kV) power line.

But a statement from Vicgrid – the body assigned the job of planning and developing the states REZ’s and the transmission lines to support them – says there isn’t enough network capacity in the area to justify it going ahead. 

“With no new transmission projects planned and many generation projects already progressing in the area, VicGrid has determined there is limited capacity on the grid to support a renewable energy zone,” the statement said.

There are already a number of solar projects wanting to connect in the area, and these will likely take up the last grid capacity before the state switches on the REZs next year, Vicgrid says.

Victoria energy minister Jaclyn Symes says the government is listening to communities, some of which have been putting up a vocal argument against this particular REZ. The decision comes just two months ahead of a state election, with anti-renewable parties such as One Nation and the Coalition polling strongly.

“This region already hosts significant renewable energy, and much of the capacity to plug new projects into the existing grid is already being used,” Symes said in a statement. 

“This means we can focus new investment where the grid can best support it.”

The news is being received with relief by the Greater Shepparton City Council, which had backed landowner concerns about impacts on farming operations, food production and landscape values.

Deputy mayor Geoff Akers said the council wanted recognition of the quality of the farmland in the area and more consultation. 

The central-north REZ was originally a single blob between Bendigo and Shepparton. 

But Vicgrid shrank it to manage flood risks, irrigation, and to avoid very good farmland, and added a new section to the east of Shepparton – and it was this new section which ruffled landowners.

A report commissioned by the council pointed to problems with this new area as well, from a publicly-funded stock and household water pipeline to higher than average wheat yielding land.

Both Vicgrid and the minister’s office, however, are at pains to remind locals that no REZ doesn’t mean renewable energy projects are now barred from the area. 

In bold font, Vicgrid’s statement says “landholders have the right to choose whether they want to host,” but it does advise them to discuss developments with their neighbours. 

Victoria is shifting from an open access regime for energy generators to a planned system, where projects inside REZs get priority access to the grid.

Those outside must jump through more hoops to prove they will not eat capacity that could be used by a REZ project. 

The new rules come into being in July next year but any projects that are “well advanced” by then – have approvals or a federal underwriting deal – will go through a slightly easier process that takes into account the fact they were designed for a different era.

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