Victoria’s Draft Plan Grid Overhaul: A Signal to Investors
Australia’s energy transition has reached another inflection point—this time in Victoria. The recently released Draft 2025 Victorian Transmission Plan - VTP (1) offers a detailed vision for the next 15 years of grid development. While it’s not law yet, it is the clearest indication so far of where the Victorian Government wants capital to flow.
This document doesn’t just speak to engineers and planners. In our view, it’s a map for investors — highlighting the where, when, and how of the infrastructure that will underpin the state’s renewable future. For those with an eye on long-duration assets, regulated returns, or project pipeline certainty, it’s an early look at what could become the most coordinated buildout of transmission assets in decades.
But the keyword is draft. Submissions are open until 24 June 2025, meaning larger investors still have a chance to help shape the final framework — or at the very least, position themselves for what’s coming.
What the Draft Plan Says
At its core, the VTP lays out a long-term roadmap for Victoria’s transition from coal-fired power to a diversified grid dominated by wind, solar, and offshore energy. It identifies:
7 draft renewable energy zones across the state
A new offshore wind zone on the Gippsland shoreline
7 major transmission upgrade programs between now and 2040
A staged, feedback-informed approach to rolling out network investments
The headline figures are substantial. The state is planning for 5.8 GW of new onshore wind, 9 GW of offshore wind, 2.7 GW of utility-scale solar, and 3.4 GW of utility-scale storage by 2040.
Investment Context: The Bigger Picture
This draft comes hot on the heels of the NSW Government’s own grid investment announcements—covered in our previous blog — which signalled a coordinated east coast push to modernise Australia's outdated transmission system. The timing is no accident.
The Australian Government’s Capacity Investment Scheme (CIS) is driving 32 GW of new generation and storage nationally, with Victoria’s allocation at 5 GW of new generation and 1.7 GW of storage by 2030. The VTP builds transmission capacity around this baseline.
This level of planning convergence means investors can now start to treat east coast energy infrastructure as a networked opportunity, rather than state-by-state guesswork.
What’s New for Investors
There are several features in the draft that are particularly noteworthy:
Access and certainty within REZs
Projects inside declared REZs will benefit from preferred grid access, streamlined approvals, and clarity on connection capacity. This dramatically reduces curtailment risk—often a dealbreaker for capital.Outside REZs: It’s complicated
Projects outside REZs must undergo a Grid Impact Assessment, and could be rejected if they constrain REZ-located generators. That’s a big nudge for developers to follow the government’s roadmap, or risk being sidelined.Gippsland’s offshore wind zone is a real focus
Offshore wind developers will be required to use a government-led transmission hub at Giffard, with designated cable landing points along the Gippsland coast. The intent is clear: no more spaghetti grid builds. Coordination means cost savings—and fewer community headaches.Landholder, community, and Traditional Owner engagement is hardwired in
Developers must meet high engagement standards or risk reputational damage, delays, or worse. From a risk-management lens, this is now a core part of due diligence.Economic incentives and community benefit schemes
VicGrid is proposing new Renewable Energy Zone Community Energy Funds, and mandatory contributions to First Peoples' benefit schemes. These are additional costs—but they also de-risk projects by enhancing social licence.
Caution: This Is Still Just a Draft
Investors would be wise to treat this draft as a strong signal — but not as gospel. The government’s own disclaimers are explicit: modelling is based on assumptions, routes are indicative, and maps are subject to change. As with any plan involving infrastructure, politics and consultation could shift the details materially.
The Victorian Government has made it clear that feedback will shape the final 2025 VTP, and the formal declaration of REZs will follow only after that. Final decisions on precise boundaries, access schemes, and hosting capacity are still in motion.
For early-stage developers or capital providers, now is the time to engage — either through formal consultation or behind the scenes with prospective project partners.
Investor Lens: What Happens Next
If the final VTP resembles this draft, we will see:
A clearer prioritisation of where to build wind, solar, and storage projects
A pipeline of grid investment opportunities—both for infrastructure providers and those seeking stable, regulated returns
A concentration of risk within well-defined zones, which simplifies underwriting and due diligence
A reduction in transmission uncertainty, one of the major blockers of large-scale renewable investments
But the investor’s job isn’t to wait. It’s to prepare. Know where the REZs are. Understand which ones align with your portfolio or strategic goals. And recognise that early movers who can demonstrate community benefits, secure land access, and align with VicGrid’s vision are likely to be fast-tracked.
The Bottom Line
Victoria’s Draft 2025 Transmission Plan is not yet a binding commitment—but it’s a remarkably detailed, forward-thinking proposal that gives the investment community a useful roadmap. Combined with NSW’s recent activity and the federal CIS backdrop, it signals that the barriers to Australia’s renewable investment pipeline are being actively dismantled.
But caveat investor: it’s still a draft. Engage now or wait in the queue later.
References
Victoria State Government, VicGrid “Draft 2025 Victorian Transmission Plan” May 2025 https://engage.vic.gov.au/victransmissionplan
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