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As the State’s ageing coal-fired power stations retire in the coming decades, they are being replaced with renewables. Our electricity system must also change to carry energy from where it is generated to where it is needed.

Shifting to renewable energy will deliver affordable, reliable and secure electricity. It will also help us deal with climate change by reducing our emissions.

To achieve these goals, we are developing Renewable Energy Zones.

What are renewable energy zones?

Renewable Energy Zones (REZs) are areas in Victoria with the greatest potential for renewable energy, such as wind, sunshine, rain, tides, waves and geothermal heat. We’re planning the future energy grid with the batteries and high-voltage wires needed to develop renewable energy resources at scale and in a coordinated way.

This is a significant transformation for our energy system.

We need good planning and management to deliver the best outcomes for Victorians. This must be coupled with genuine partnership with Traditional Owners and engagement with host communities and landholders. By identifying Renewable Energy Zones, we can coordinate development to minimise negative impacts on local communities and maximise regional development and job opportunities.

Where are Victoria’s renewable energy zones?

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
Map of Victorian REZs. There are 6 identified REZs - Central North, Gippsland , Murray River, Ovens Murray, South Victoria, Western Victoria

Consultation

Renewable Energy Zones Development Plan Directions paper

In February 2021, we released the Renewable Energy Zones Development Plan Directions paper. We then consulted industry and community stakeholders on 3 broad areas:

  1. Potential network investment projects identified in the initial development plan
  2. Potential form and function of VicGrid in planning and developing renewable energy zones in Victoria
  3. Broader issues for consideration when developing Victoria’s REZs.

We received written submissions from a wide range of industry and community stakeholders. These included market and regulatory bodies, renewable generation developers, financiers, council representatives, business associations, energy user groups, and residents in a renewable energy zone.

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

Developing offshore wind and the next stage of Victoria’s REZs

The Victorian Offshore Wind Policy Directions Paper outlines our vision for establishing Australia’s first offshore wind sector and our targets of at least 2 GW by 2032, 4 GW by 2035 and 9 GW by 2040.

Following stakeholder engagement, we have also released the first Offshore Wind Implementation Statement. This includes details on our approach to developing the transmission network to provide offshore wind farms near the Gippsland Coast and Portland with access to the grid.

Engagement on offshore wind transmission will commence in early 2023.

Investing in Renewable Energy Zones

The Victorian Government worked with the Australian Energy Market Operator (AEMO) to identify network investments to support the timely and efficient development of REZs.


The Victorian Renewable Energy Zones Development Plan identified potential near-term projects to reduce existing constraints and support the connection of Victoria’s pipeline of renewable energy projects (Stage One projects). This included minor network augmentation works, projects to strengthen the system and larger augmentation projects.

$480 million from the REZ Fund has been invested in 12 Stage One projects to strengthen and modernise the state’s grid.

Learn more about these Stage One projects and other transmission and grid upgrades to support our clean energy transition.

VicGrid

VicGrid, a body within DEECA, coordinates the overarching planning and development of Victorian renewable energy zones.

VicGrid also oversees investment decisions related to the $540 million REZ fund that will be used to strengthen the grid and unlock the potential of the REZs.

Find out more about VicGrid.

Page last updated: 20/12/23