VicGrid Scales Back Renewable Energy Ambitions in New Draft Plan

The 2025 Victorian Transmission Plan (VTP) appears to have reined in the state’s renewable ambitions.

A view of Wonthaggi Wind Farm to the south-east of Melbourne in Victoria, Australia, on July 7, 2015. Quinn Rooney/Getty Images

A Victorian government agency tasked with developing infrastructure for renewables has significantly scaled back its visions for future expansion.

VicGrid, a government agency established in 2021 under the state’s Department of Energy, Environment and Climate Action, was set up specifically to coordinate and plan the state’s Renewable Energy Zones (REZs), generally comprising wind, solar, and battery farms.

But in the most recent draft 2025 Victorian Transmission Plan (VTP), the long-term vision for renewables appears to have been reined in by a more conservative output strategy.

The latest report shows the Victorian government proposing to cap the magnitude of wind and solar generation in its REZs in order to mitigate the risk of overproduction which could subsequently tarnish investor interest.

When supply exceeds demand or storage, it can cause wind and solar farms to become commercially unviable, generating lower returns for investors.

The state government also runs the Victorian Access Regime (VAR), a body that works to align wholesale electricity generation with transmission infrastructure in order to satisfy third-party investors.

In 2021, the Victorian government set an ambitious goal to generate 10 gigawatts of new capacity across all REZs, which would have brought total capacity up to 16 gigawatts.

But the 2025 draft plan narrows the magnitude of renewable power generation to around 8 gigawatts across seven REZ sites at Central Highlands, Central North, Gippsland, Grampians Wimmera, North West, South West and Wimmera Southern Mallee combined.

The revelation comes amid recent issues within the state around wholesale power prices caused by coal and gas plant outages impacting supply—all while emerging renewables struggle to mesh with existing systems and needs.

Fast-tracking Renewables

In late May, Victorian Premier Jacinta Allen announced the fast-tracking of an $3.3 billion in funding for renewable projects.

“We’re making good decisions faster and greenlighting more renewable projects that will power hundreds of thousands of homes and create one thousand jobs,” Minister for Planning Sonya Kilkenny said.

While some other states and territories have scaled back net zero targets across some sectors, Victoria remains committed to an amendment passed through parliament in 2023 to reach net zero emissions by 2045, rather than 2050, which is the accepted benchmark in other states.

Last year, Victoria fast-tracked development for renewable energy projects by removing planning panel processes and third-party appeals.

The changes mean a project can be approved in as little as four months and will prevent community opponents from keeping renewables projects in limbo through civil processes.

The VTP, however, will be open to public feedback until June 24.

The Epoch Times contacted VicGrid for comment.