Victoria has sharply increased the projected cost of its long-term renewable energy transmission plan to $7.9 billion as the state government finalized a blueprint that sets out how new wind and solar projects will be connected to the grid. The announcement, delivered through VicGrid’s final transmission roadmap, nearly doubles an earlier estimate of $4.3 billion and underscores the scale of investment required to replace retiring coal power stations in the coming decade.
The plan, released late this week, details six expanded renewable energy zones across the Central Highlands, Central North, Gippsland, North West, South West and Western regions. Together these zones will account for almost 8 percent of the state’s land area. The government expects around 5.2 million solar panels, 970 onshore wind turbines and 500 offshore wind turbines to be built by 2040, enabling Victoria to meet its targets of 65 percent renewable energy by 2030 and 95 percent by 2035.
Officials said the new network build will increase annual household power bills by about $14 and small business bills by $34. They argue these modest network charges will be outweighed over time by cheaper wholesale electricity prices once large volumes of new renewable generation and storage flow into the grid. Independent experts remain divided on how quickly those savings will reach consumers.
Energy Minister says long-term plan will lower power costs
The increase in cost is attributed to updated market operator forecasts, global supply chain pressures, inflation and more extensive community engagement requirements. Energy Minister Lily D’Ambrosio said the 15-year program is essential to keep energy prices lower in the long term, ensure reliability and unlock clean power projects. She pointed to the upcoming closure of major coal assets such as the Loy Yang A station as a key driver for urgent investment.
Opposition lawmakers criticized the plan, accusing the government of mismanaging the transition and failing to control spiraling costs. They argued that consumers are being asked to shoulder higher bills without clear timelines for when savings will materialize. Local communities remain a focal point of debate. Farmers and rural groups have warned that new transmission lines could disrupt farmland and reduce agricultural productivity.
Analysts divided on modelling and wholesale price savings
Protests have intensified following legislation that makes it easier for surveyors to access private land. The government insists that towers and corridors will have limited footprints and has promised a benefits fund to support affected communities, though unease among landholders remains strong.
VicGrid’s modeling suggests that wholesale energy prices will fall as new renewable power displaces fossil fuel generation, producing long-term system savings that offset the higher upfront cost. However, analysts caution that assumptions about project timing, capital costs and market dynamics could prove optimistic. With routes now finalized, the focus shifts to approvals and delivery.
Construction will proceed in stages through the 2030s as wind and solar projects reach financial close. The government maintains that moving quickly on transmission will prevent bottlenecks that could otherwise delay renewable investment and jeopardize its 2030 and 2035 targets. Industry participants will be watching closely to see whether the $7.9 billion price tag holds and whether community concerns can be eased during the buildout. – By Content Syndication Services.