Developing Victoria’s REZs

In November 2020, the Victorian Government announced a $1.6 billion clean energy package through the 2020–21 State Budget, to invest in renewables, grid infrastructure, energy efficiency and decarbonisation projects, including $540 million to establish 6 Renewable Energy Zones (REZs).

The Victorian Government, through its Climate Change Strategy, has committed to reduce emissions by 28 to 33% by 2025 and 45 to 50% by 2030, to help keep Victoria on track to meet our target of net-zero emissions by 2050.

With electricity generation accounting for more than half of Victoria’s carbon emissions, the transition to clean energy is vital to achieve our climate change targets. The development of REZs is key to this energy transformation.

We are working to actively plan and develop Victorian REZs, with a commitment to invest $540 million in needed REZ network infrastructure and the establishment of a new body, VicGrid.

By identifying Renewable Energy Zones, the Victorian Government can target investment towards strengthening the transmission network in Victoria to enable an orderly and coordinated transition to renewable energy and engage with local communities to ensure that they benefit from REZs.

Strategic investment in REZs provides a lower cost and faster way of delivering new generation to the system – helping to accelerate the process of decarbonisation and deliver affordable and reliable power.

The Victorian Government will develop the REZs to:

  • ensure that communities, including traditional owners, are engaged in the process
  • provide for the orderly, planned development of renewable energy resources
  • efficiently and effectively expand the grid and connect new generation
  • reduce network congestion and costs.

Where are the Victorian REZs?

The Australian Energy Market Operator’s (AEMO) Integrated System Plan (ISP) identified 6 Victorian REZs:

  • Central North
  • Gippsland
  • Murray River
  • Ovens Murray
  • South Victoria
  • Western Victoria

Planning REZs and consultation process – REZ development plan and directions paper

The first step towards developing Victoria’s REZs was the release of the REZ Development Plan Directions Paper for consultation on 18 February 2021 so industry and community stakeholders could provide feedback on broadly 3 areas:

  • potential network investment projects identified in the initial REZ Development Plan (RDP)
  • potential form and function of VicGrid in planning and developing REZs in Victoria
  • broader issues for consideration when developing Victoria’s REZs.

We will keep you updated on future consultation and decisions in relation to the RDP as announcements are made.

Victorian Renewable Energy Zones Development Plan Directions Paper (PDF, 7.5 MB)

The release of the directions paper was a key milestone and reflected an early stage in the process for developing a RDP.

As part of this initial phase of consultation, from mid-February to 31 March 2021, the Victorian Government:

  • ran a series of online briefing forums on the directions paper, targeting a wide range of industry and community stakeholders, including renewable energy and infrastructure investors, developers, energy businesses, consumer and industry representatives, and REZ community stakeholders
  • held bilateral meetings with industry and community stakeholders
  • invited and received a robust number of submissions in response to the directions paper.

Written submissions were received from a wide range of industry and community stakeholders, including market and regulatory bodies, renewable generation developers, financiers, council representatives, business associations and energy user groups and residents located within a REZ.

The volume and diversity of responses highlighted the importance of this initiative for the Victorian community and energy industry.

You can view the submissions that have consented to publication.

Coordinating REZs – VicGrid

For REZs to be developed to their full potential, there is a clear need for timely, coordinated development of renewables and network infrastructure, with strong community support.

VicGrid will be tasked with coordinating the overarching planning and development of Victorian REZs. This new entity will also ultimately manage the $540 million REZ fund that will be used to strengthen the grid and unlock the potential of the REZs.

Stakeholder feedback is informing ongoing work to define the scope and functions of VicGrid. This feedback has highlighted a need for strategic planning of REZs that engages the community upfront on a medium-term development agenda rather than ad hoc on a project-by-project basis.

Importantly, this work will involve further stakeholder and community consultation. We will keep you updated on future consultation opportunities and decisions as announcements are made.

VicGrid is expected to have a critical role in actively engaging with regional communities to ensure appropriate and beneficial development in each REZ. An announcement on VicGrid is expected later in the year.

Questions and feedback

For questions and feedback, please email REZDevelopment@delwp.vic.gov.au

Page last updated: 23/06/21