Victoria takes control of transmission planning to ensure it gets to 95 pct renewables

The Victoria state government appears to have taken over transmission planning from the Australian Energy Market Operator, in a move designed to allay community concerns and clear the path for its ambitious 95 per cent renewable energy target.

New renewables development in the state has become bogged down by the lack of network capacity, but the already delayed push for new transmission projects has met fierce resistance from some local communities, and even energy analysts are divided over the benefits of some of the proposed projects.

AEMO has admitted that it could have done better on some of its community consultations, and that process is now being handed to VicGrid, already responsible for the development of renewable energy zones in the state state.

It’s a blow to AEMO – its transmission planning role in Victoria is unique in Australia – but appears to be the result of growing frustration with the build out of new network capacity.

State energy minister Lily D’Ambrosio says the Victorian Transmission Investment Framework (VTIF) announced on Thursday will ensure environmental, land-use, cultural and social factors are considered early in the process to inform locations for new transmission projects.

The new VTIF aims to tailor engagement to the needs of Traditional Owners and local stakeholder groups, while also developing a framework for government, industry and community partnerships to ensure host communities benefit directly, and regional development opportunities are maximised.

VicGrid will also develop a Victorian Transmission Plan – an outlook of the transmission infrastructure required for Victoria’s renewable energy transition over the next 15 years.

“As Victoria moves toward 95 percent renewables by 2035, we have to update and modernise our grid to deliver this cheaper, more reliable energy to homes and businesses across the state,” D’Ambrosio said on Thursday.

“This is a once-in-a-generation opportunity to reform the way we plan our energy infrastructure with genuine
consultation with communities and industry at the heart of the process.”

The new framework comes as the final calls are being made on the controversial VNI West transmission upgrade that will link Victoria and New South Wales from Victoria’s north west.

The latest the preferred scenario for VNI West put forward last week by AEMO and Transgrid, dubbed route option 5A, will allow greater capacity to be carried in the renewable energy zones it connects, but could also lead to significantly less investment in wind, solar and storage in Victoria.

This has raised fresh concerns that the proposed $3.3 billion transmission link could have the unintended effect of boosting NSW coal generation and even delaying the retirement of certain black coal plants.

Already the proposed transmission upgrade had attracted criticism from landowners and local councils over visual and environmental impacts and the fate of endangered species. It has also divided experts over whether it offers best value for money and the best support for renewables in the state.

However, many in the industry say that the details of the modelling don’t matter – what’s important is to finally build long-delayed transmission to enable more renewable capacity and for coal fired power stations to close.

“The Victorian Transmission Investment Framework will help us get the planning of new infrastructure right, so we can make sure all Victorians benefit from the transition to renewable energy,” said VicGrid CEO Alistair Parker on Thursday.

VicGrid says the priority areas for transmission projects to support renewable energy zone development will be identified by early 2024, with publication of a draft Victorian Transmission Plan for consultation expected by late 2024.

Update: In a later emailed statement, Nicola Falcon, the head of AEMO Victorian Planning, said AEMO is supportive of the Victorian government’s new framework.

She said community support and social licence are both vital for the timely delivery of essential transmission investment. “We look forward to continuing to work with VicGrid to incorporate framework principles into transmission projects underway and into the future,” Falcon said.