The Victorian Government, through VicGrid, has released the State’s first long-term transmission roadmap - the final 2025 Victorian Transmission Plan (VTP). Covering the period to 2040, the VTP outlines six Renewable Energy Zones (REZs), seven priority transmission programs, and a new framework for integrating renewable generation as coal-fired power retires.

The plan reflects substantial revisions following consultation on the Draft VTP, including expanded REZ boundaries, revised sequencing of transmission projects, cost updates, and a structured scenario framework. It also embeds community, agricultural and environmental considerations directly into transmission planning.

For project stakeholders (including developers, contractors, suppliers, investors, and consultants) the VTP provides long-sought clarity on geographies, infrastructure priorities, and engagement standards. However, it also sets heightened expectations on delivery timelines, cost recovery, and social licence, creating both opportunities and challenges as Victoria pursues its 2030 and 2035 renewable energy targets.

Key points

• Victoria’s first long-term grid plan: The 2025 VTP establishes a coordinated pathway for transmission development to 2040, integrating six REZs, seven major programs, and scenario-based planning aligned with AEMO’s Integrated System Plan.
• Consultation drove key revisions: More than 700 submissions and engagements shaped the final plan. Changes include consolidation of REZs, expanded REZ boundaries (now 1.88m ha), clarification that REZ capacity figures are not hard caps, and strengthened community benefit-sharing commitments.
• Transmission investment pipeline: The VTP identifies nearly $7.9 billion in new transmission works, covering ~430 km of line upgrades and ~380 km of new builds. The seven programs include urgent Gippsland offshore connections, Western and Eastern Victoria reinforcements by 2030, and longer-term projects in the South West, North West, Latrobe Valley, and Southern Ocean.
• Opportunities for stakeholders: The VTP creates a decade-long pipeline of commercial opportunities across EPC contracts, O&M agreements, equipment procurement, consulting and advisory services, supply chain logistics, and financing structures. Offshore wind transmission (Gippsland and Southern Ocean) and REZ expansions present major growth areas.
• Challenges ahead: Aggressive delivery timelines, increased cost estimates, and enduring community and landholder opposition present significant risks. Supply chain constraints, workforce pressures, and contested social licence will test the ability of stakeholders to deliver projects on time and at scale.
• Next milestones: VicGrid will consult during 2025 on new Access and Connection rules and benefit-sharing guidelines, with the Stage 2 Reform Bill expected to take on 1 November 2025, transferring statutory responsibility for transmission planning and procurement from AEMO to VicGrid. The next VTP is scheduled for 2027, following updated Guidelines in 2026.

Victoria’s first long-term transmission plan

As Part 3 of our series on the Victorian Transmission Plan (VTP), following our earlier analysis of the Draft VTP (see Part 1 and Part 2), the Victorian Government, through VicGrid, has released the final 2025 VTP.

The VTP is Victoria’s first comprehensive, long-term roadmap for the development of Renewable Energy Zones (REZs) and the transmission infrastructure required to connect them. Covering the period to 2040, it sets out the scale and sequencing of network investment needed as coal-fired generation retires and Victoria accelerates toward its legislated renewable energy targets of 65% by 2030 and 95% by 2035.

The plan extends beyond a technical document, setting a new planning framework in which community, agricultural, and environmental considerations are formally integrated into transmission development. It also reflects extensive feedback received during public consultation on the Draft VTP, resulting in meaningful changes to REZ boundaries, transmission sequencing, cost estimates, project solutions, and the broader policy framework.

This article highlights the key concerns raised during consultation, the substantive changes made in the final plan, and the opportunities and challenges these developments create for project stakeholders across Victoria’s energy sector.

Stakeholder concerns raised during consultation

The Draft VTP was released on 19 May 2025, commencing a six-week consultation period that closed on 24 June 2025. VicGrid received more than 260 feedback forms and 460 written submissions, alongside over 100 community briefings involving approximately 400 community members across regional Victoria. Submissions were received from developers, contractors, investors, individuals, community groups, councils, Traditional Owners, industry bodies and agricultural representatives. The consultation identified several consistent themes that informed the final VTP.

(a) Regional burden and land use impacts

Many rural communities argued that they were being asked to shoulder disproportionate impacts of hosting large-scale energy projects while urban areas benefited from lower-cost, reliable electricity. This concern was tied to fears of “industrialisation” of regional landscapes and loss of amenity.

Landholders and councils stressed the importance of protecting high-value agricultural land. Concerns were raised about biosecurity risks, disruptions to farming practices, and long-term productivity losses if large areas were occupied by transmission corridors or solar farms.

(b) Environmental and cultural heritage concerns

Environmental groups and Traditional Owners highlighted risks to biodiversity and cultural heritage. Submissions called for sensitive areas (including high-value ecosystems and culturally significant sites) to be excluded from REZs. There were also calls for greater transparency on how cultural heritage would be identified and protected in route planning.

(c) Transmission infrastructure and routing

Transmission projects, particularly the Western Renewables Link (WRL), attracted strong opposition. Communities argued that the Draft VTP appeared to predetermine the WRL without adequately considering alternatives, such as upgrades along existing corridors or installing underground transmission in sensitive areas. Respondents emphasised the need for genuine consultation on routing decisions to avoid townships, farmland, and heritage sites.

(d) Visual, safety, and amenity impacts

Concerns were raised about visual impacts of overhead lines, bushfire ignition risks, and interference with aerial farming operations. Many submissions pressed VicGrid to consider underground cabling, even at higher cost, as a way to balance technical needs with social license.

(e) Clarity and transparency of the draft plan

Industry stakeholders expressed uncertainty over whether the “modelled generation capacity” figures for each REZ would act as hard caps, creating investment risk. Communities and consumer groups demanded greater transparency on costs, benefits, and bill impacts. The absence of a clear cost-benefit analysis in the draft plan was seen as a significant gap. 

These concerns did not result in wholesale redirection of the plan but did inform substantive adjustments in the final VTP.

Key changes in the final 2025 VTP

The final VTP reflects significant revisions compared to the draft. VicGrid sought to respond to stakeholder concerns where possible, while maintaining the technical integrity of the grid plan. Key changes include:

(a) Expanded and refined REZs

The total REZ footprint was increased by around 200,000 hectares, now covering 1.88 million ha (7.9% of Victoria’s land area). Boundaries were refined to avoid sensitive areas while extending into new regions suggested during consultation. Notable adjustments include expansion of the Wimmera-Southern Mallee and addition of new land near Coleraine to the South West REZ.

(b) Consolidation of REZs

The Draft VTP proposed seven REZs. In the final plan, the Grampians Wimmera and Wimmera Southern Mallee were consolidated into a single western REZ, comprising two sub-regional parts. This streamlining allows more efficient use of shared transmission infrastructure and greater flexibility for project siting. Six onshore REZs now form the framework: Central Highlands, Central North, Gippsland, North West, South West, and Western Victoria.

(c) Clarification on REZ capacity figures

The final plan explicitly clarifies that modelled REZ generation figures are not binding caps. They are planning estimates only, designed to inform transmission build-out. This provides industry with certainty that viable projects will not be excluded simply because modelled numbers have been exceeded.

(d) Revised transmission projects and sequencing

Seven “priority programs” of transmission works are identified, including four new major lines and several upgrades. Delivery sequencing was adjusted based on updated power system studies and industry input. Urgent projects include a second radial line and tie in loop in Gippsland to facilitate offshore wind and a new line between Sydenham and Tarrone.

(e) Cost updates and economic analysis

Projected investment requirements have increased substantially (from around A$4.3 billion to A$7.9 billion in the final plan) due to updated cost benchmarks, inflationary pressures, and expanded project scope. To address stakeholder calls for transparency, the final VTP includes a cost-benefit analysis demonstrating that long-term consumer savings from renewables outweigh higher network costs.

(f) Planning for uncertainty

The final VTP adopts a structured scenario framework to account for uncertainty in Victoria’s energy future. Three hypothetical scenarios (adapted from AEMO’s 2024 integrated system plan and aligned with the Victorian Transmission Investment Framework) are modelled to test how much renewable generation is needed and when:

• Scenario 1 - Step change: Victoria transitions broadly in line with AEMO’s step-change trajectory, achieving renewable and storage targets on schedule.
• Scenario 2 - Green exports: Higher demand driven by large-scale industries such as hydrogen production, data centres, and green aluminium, resulting in rapid electricity consumption growth.
• Scenario 3 - Delayed transition: A slower transition where new infrastructure delivery is delayed by up to a year and adoption of consumer energy resources (solar, storage, EVs) lags expectations. These scenarios are not forecasts or endorsements of a particular outcome. Instead, they provide a planning tool to ensure the identified transmission projects remain resilient under different futures. Sensitivity analysis was also undertaken to test alternative assumptions, reinforcing the plan’s ability to manage the risks of both under- and over-investment.

(g) Offshore wind infrastructure

The plan confirms a dedicated Gippsland Shoreline REZ and a transmission ring (a second radial line and tie in loop in Gippsland) to support more than 7 GW of offshore wind. Route selection remains subject to further consultation, but this infrastructure represents a major new opportunity for offshore developers.

(h) Legislative and regulatory context

The VTP acknowledges the introduction of the VicGrid Stage 2 Reform Bill 2025, which will strengthen VicGrid’s statutory role in transmission delivery. It also foreshadows Access and Connection Guidelines and Grid Impact Assessment (GIA) rules, both critical for developers seeking clarity on grid access.

(i) Community engagement and benefit sharing

The final plan highlights forthcoming revisions to the Community Engagement and Benefit Sharing (CEBS) Guide, setting higher expectations for developers.

Opportunities for project stakeholders

(a) Renewable energy development:

The six REZs, expanded to 1.88 million hectares (7.9% of Victoria’s land area), now provide developers with a clearer investment signal. Larger footprints mean more viable sites for wind, solar, and storage projects, and more landholders can participate. The clarification that modelled REZ capacities are planning estimates (not caps) removes a major source of investor uncertainty, giving developers confidence that additional projects can proceed if technically feasible.

(b) Innovation and community partnerships:

The plan signals that project approval will increasingly depend on strong social licence. Developers who design projects with co-benefits (such as community equity models, agrivoltaic layouts that combine farming and energy, or local rebate schemes) may achieve smoother delivery and fewer delays. Contractors and suppliers who can offer low-impact design solutions (e.g. compact towers, partial undergrounding, dual-use land integration) will also be positioned more competitively.

(c) Transmission infrastructure:

For project stakeholders, the seven priority programs outlined in the VTP translate into a substantial pipeline of commercial opportunities over the next decade. These extend beyond construction contracts (such as engineering, procurement and construction packages, and design-and-construct works) to include long-term operations and maintenance agreements, procurement of equipment and materials, specialist consulting and advisory services (environmental, cultural, planning and technical), financing and investment structures, power purchase agreements and offtake arrangements, as well as broader supply chain and logistics support. The key programs are as follows:

1. Western Victoria reinforcement (2028–2030): A program of network augmentations and upgrades to existing infrastructure, designed to connect onshore wind and solar generation from the Western, Central Highlands and South West REZs, while reinforcing supply into metropolitan Melbourne.
   Opportunities: transmission line rebuilds and uprating, terminal station expansions, supply of towers, conductors, transformers and control equipment, as well as engineering, construction, planning and environmental services to integrate large volumes of renewable generation.
2. Eastern Victoria reinforcement (2028–2030): A suite of network augmentations and upgrades to existing infrastructure, including a new transmission line between Hazelwood and Yallourn. This program is intended to meet growing demand in eastern metropolitan Melbourne, respond to the geographic shift of supply from eastern to western Victoria, and ensure secure connection of the Gippsland and Central North REZs as well as the Gippsland offshore wind area.
   Opportunities: design and construction of the new Hazelwood–Yallourn line, augmentations of existing assets, bushfire corridor planning and risk mitigation, substation upgrades, and system stability and reliability studies focused on securing metropolitan load centres.
3. North West strengthening (2035): Replacement of sections of the existing single-circuit transmission line with a new high-capacity double-circuit line. This program is designed to support additional renewable generation in the proposed Western and North West REZs and enable efficient transfer of that power to major demand centres.
   Opportunities: large-scale EPC contracts, steel and tower component manufacturing, advanced conductor supply, corridor planning and acquisition services, environmental and agricultural coexistence assessments, and long-term O&M agreements to ensure reliable transfer of generation from Victoria’s north west.
4. South West expansion (2033): Development of a new 500 kV double-circuit transmission line and associated works in South West Victoria. This program is intended to unlock significant high-quality wind generation in the South West and Central Highlands REZs and ensure efficient transfer of power into the wider Victorian grid.
   Opportunities: EPC contracts for line construction and associated works, civil and electrical contractor packages, logistics and transport services for heavy equipment, supply of towers, conductors and substations, as well as long-term operations and maintenance agreements to support ongoing system reliability.
5. Gippsland offshore wind stage 2 (2033–2038): A new transmission loop to connect additional offshore wind generation in the Gippsland offshore wind area. Progressing beyond the first Gippsland offshore wind transmission project, this program is required to meet Victoria’s 2035 and 2040 offshore wind targets.
   Opportunities: offshore-onshore interface design, subsea and underground cable installation, coastal and marine civil works, high-voltage equipment supply, cultural heritage and environmental assessments, and long-term O&M services to support integration of large-scale offshore projects.
6. Latrobe Valley strengthening (2034–2035): New power flow controllers and dynamic line rating devices in the Latrobe Valley. This program is designed to allow easier integration of wind and solar, manage significant power flows, and address network congestion. It supports connection and transfer of generation from the Gippsland REZ and the Gippsland offshore wind area.
   Opportunities: technology vendors supplying advanced control and rating devices, system integration specialists to configure new equipment, engineering consultancies for load management and stability modelling, and service providers for long-term monitoring and maintenance.
7. Southern Ocean offshore wind upgrade (by 2038 or earlier): Uprating of existing transmission lines from Heywood to Portland. This program is required to connect offshore generation from the Southern Ocean offshore wind area to Portland.
   Opportunities: uprating works on existing transmission infrastructure, specialist engineering for coastal and high-wind environments, supply of advanced conductors and insulation equipment, civil and electrical contracting for line strengthening, and long-term reliability and maintenance services to support integration of offshore generation.

Together, these programs will require 430 km of line upgrades and 380 km of new builds, positioning Victoria’s transmission rollout as one of the largest coordinated energy infrastructure undertakings in the country.

Challenges for Project Stakeholders

(a) Community and landholder opposition:

Despite boundary refinements and expanded REZ footprints, the VTP acknowledges that community concerns about land use, amenity, and agricultural impacts remain unresolved. Transmission corridors (particularly contentious projects such as the Western Renewables Link) continue to face strong resistance from landholders and councils. Developers and contractors will not only need to demonstrate minimisation of impacts but also deliver tangible benefit-sharing outcomes if approvals are to be secured without costly delays.

(b) Aggressive delivery timelines:

The final plan identifies seven priority programs, with several (Western and Eastern Victoria reinforcements) required by 2028–2030. These coincide with other national-scale projects such as VNI West, Marinus Link, and the first stage of offshore wind transmission in Gippsland. Meeting these deadlines will test the efficiency of Victoria’s planning and environmental approval processes. For stakeholders, any delay risks constraining generation projects already in the pipeline. Early mobilisation and alignment with VicGrid’s sequencing will be critical.

(c) Rising costs and recovery mechanisms:

Updated estimates in the VTP nearly double projected transmission costs to A$7.9 billion, reflecting global inflation and expanded project scope. While the cost-benefit analysis demonstrates long-term net consumer savings, uncertainty remains over how costs will be allocated and recovered. For investors, contractors, and suppliers, this raises questions around project financing, procurement strategies, and potential reliance on federal funding or regulatory cost-recovery mechanisms. Transparent cost allocation frameworks will be crucial to maintaining market confidence.

(d) Regional equity and social licence:

Even with larger REZ footprints, some regional stakeholders perceive that the costs and disruptions of hosting infrastructure outweigh the benefits. This narrative persists particularly in agricultural districts and coastal communities affected by offshore wind connections. Unless developers and contractors can demonstrate visible, localised benefits (such as community funds, jobs, or co-ownership models) regional equity will remain a flashpoint, increasing the risk of contested approvals and reputational challenges.

(e) Delivery and supply chain risks:

Coordinating seven major transmission programs alongside already committed projects will stretch supply chains and workforce capacity. The VTP itself flags the need for about 430 km of upgraded lines and 380 km of new builds, plus new substations, offshore-onshore interfaces, and advanced grid devices. This surge coincides with parallel national transmission programs, driving competition for towers, conductors, transformers, and skilled labour. Stakeholders must anticipate cost escalation, procurement bottlenecks, and potential delays unless supply chain resilience and workforce planning are actively managed.

Conclusion

The VTP represents a decisive shift in how Victoria will expand and modernise its grid. It provides, for the first time, a coordinated long-term pathway (six Renewable Energy Zones, seven priority transmission programs, and a structured scenario framework) that balances system needs with environmental, agricultural, and community considerations.

For the energy sector, this clarity is significant. Developers, contractors, suppliers, investors and consultants now have defined geographies, infrastructure priorities, and engagement standards to plan against. At the same time, the plan introduces heightened expectations: more rigorous community engagement, stronger benefit-sharing obligations, and delivery within compressed timelines.

As part 3 of our series on the VTP, this article underscores that while the final plan incorporates many of the substantive changes sought through consultation (expanded REZs, clarified generation assumptions, updated costings, and refined project sequencing) the challenges are equally clear. Community acceptance, supply chain capacity, and cost recovery will all shape outcomes.

For project stakeholders, the path forward lies in early alignment with VicGrid’s framework, proactive engagement with local communities, and investment in delivery capability. Success will depend not only on building infrastructure, but on doing so in a way that meets the dual imperatives of technical reliability and enduring social licence.

Note: Looking ahead:

1. VicGrid will consult during 2025 on the design of the new Victorian Access Regime, including an Access and Connections Consultation Paper, draft Grid Impact Assessment Guidelines, and an updated Community Engagement and Benefit Sharing Guide. Final documents are expected later in 2025;
2. The VicGrid Stage 2 Reform Bill 2025 is expected to take effect on 1 November 2025, transferring responsibilities (such as planning and procurement) from AEMO to VicGrid; and
3. The VTP Guidelines will be reviewed and updated in 2026, with the next VTP scheduled for 2027 and every four years thereafter (or sooner if required).

These milestones provide stakeholders with a clear forward timetable for ongoing policy, regulatory, and planning reforms. Dentons will continue to provide updates on the Victorian Transmission Plan and related reforms. If you have any questions regarding the VTP, our articles in this series, or about your own projects - whether renewable, infrastructure, energy, or transmission-related - please reach out to Matt Coleman (Partner in the Energy, Infrastructure and Major Projects team).