Victoria flicks switch for giant electricity transmission project

The Victorian government has signed off on a preferred development plan for its $3.3bn electricity transmission project, VNI West, a centrepiece of the state’s renewable energy push.

The Victorian government has signed off on a preferred development plan for its $3.3bn electricity transmission project, VNI West, a centrepiece of the state’s push to shift the power grid away from coal and reach a 95 per cent renewables target by 2035.

After kicking off the regulatory process in 2019, the Australian Energy Market Operator has struck a deal for the transmission line that connects the EnergyConnect line now being built in NSW with Victoria’s Western Renewables Link.

The development allows for up to 3400 megawatts of extra renewable generation to be built across the solar-rich Murray River renewable energy zone and the wind power-driven Western Victoria zone.

The Andrews government has approved a ministerial order backing AEMO’s preferred option, which connects VNI West to the planned Western Renewables Link at a terminal station at Bulgana in Victoria’s west. It then links to a terminal station near Kerang in North Central Victoria, before crossing the Murray River north of Kerang.

Planning and environmental approvals will still be required, however, with the state saying community input would play a “crucial role” in helping design a route that minimises impacts on the landholders, the environment and farming operations.

Victorian Energy Minister Lily D’Ambrosi. Picture: AAP

As previously flagged, landholders will be paid $8000 a year per kilometre of transmission hosted over a 25 year period, on top of existing deals for compensation which cover any loss of land value.

The broad location for the project, spanning 5km to 50km in width, includes a decision by AEMO to proceed with option 5A which crosses the Murray River north of Kerang rather than an alternative proposal to cross the river at Echuca.

“By crossing the Murray River further northwest, the project can also avoid some sensitive cultural areas and prime irrigation land identified in feedback from local communities and avoid the habitat of the endangered Plains-wanderer,” AEMO Victorian Plan­ning group manager Nicola Falcon said, referring to a rare bird.

The next step is to identify a preferred corridor for VNI West, after which AEMO will allocate landowners a land liaison officer to discuss hosting transmission lines. Officials expect VNI West to be operating by mid 2031.

The project has attracted significant opposition from groups including the Victorian Farmers Federation which previously said farmers had been blindsided by the route proposal.

The Energy Users Association of Australia has also raised concern over the high cost of the transmission lines, saying both big energy users and Victorian households had a high chance of being asked to pay for an uneconomic project.

 

Victorian Energy and Resources Minister Lily D’Ambrosio said the facility would help to reach 95 per cent renewables by 2035 and create 59,000 jobs.

“Progressing critical transmission projects like VNI West is necessary to deliver cheaper, more reliable renewable energy to Victorian homes and businesses,” Ms D’Ambrosio said.

“There can be no energy transition without new transmission infrastructure – as Victoria moves towards 95 per cent renewables by 2035, we have a duty to modernise our electricity network.”

The Western Renewables Link promises to deliver 900MW of wind and solar to Melbourne’s northwest, enough to power more than 500,000 homes.

The Clean Energy Finance Corporation warned earlier in May that Australia was “well behind the pace” in the race to reach Labor’s target of 82 per cent renewables in the power grid by 2030, with a major wind farm needing to be built each month until the end of the decade to hit the ambitious goal.

Over $120bn of spending is needed to finance new solar, wind, transmission and energy storage projects by 2030, according to the Australian government-backed Clean Energy Finance Corporation, but current investment is falling short of targets.