Victoria approves acceleration of intra-state transmission project


The Australian Energy Market Operator (AEMO) has been cleared to start early works on the Victoria-New South Wales Interconnector (VNI) West project which has the potential to boost Victoria’s import and export capacities with New South Wales (NSW) by more than 1.8 GW.

An order has been issued under the National Electricity (Victoria) Act that enables the market operator to immediately commence preparatory and planning works for the estimated $3.25 billion (USD 2.25 billion) project which comprises a new high-capacity 500 kV double-circuit overhead transmission line linking Victoria and NSW.

The Victorian government said the order will speed up key development activities including stakeholder and community engagement, land use planning, detailed engineering design, and cost estimation.

Processes such as the Environment Effects Statement (EES) will be able to start later in 2023, a year earlier than originally anticipated.

The VNI West project, which is expected to be built by 2028, has been identified as a key piece of network infrastructure in AEMO’s Integrated System Plan for the increased integration of renewables and maintaining reliability as increasing numbers of coal-fired power plants exit the system.

VNI West (shown in red dotted line) from AEMO’s Draft 2022 Integrated System Plan (for illustrative purposes only)

Image: Transgrid

The project proposes to connect Victoria’s grid north of Ballarat, via Kerang, with NSW at the Dinawan substation near Wagga Wagga. It is anticipated the interconnector will result in an extra 1,800 MW of transfer capacity during peak demand periods, allowing Victoria to export about 1,930 MW to NSW.

Victoria Energy Minister Lily D’Ambrosio said transmission projects like VNI West are the key to delivering cheaper and more reliable renewable and storage capacity as Victoria continues its transition towards renewable energy.

“As ageing coal-fired generators retire and become increasingly unreliable, Victoria is enabling a once-in-a-generation transformation of our clean energy grid and delivering thousands of jobs along the way,” she said.

“Bringing forward VNI West means we can connect cheaper, more reliable renewable energy sooner, putting downward pressure on energy prices.”

It is expected the transmission project will unlock between 1.9 GW and 5 GW of new renewable projects in Victorian renewable energy zones (REZs), provide an additional market for the state’s offshore wind industry and provide access to NSW projects like Snowy 2.0.

AEMO Victorian Planning Group Manager Nicola Falcon said the project will improve the reliability and security of electricity supply for both states.

“VNI West will help unlock and share geographically and technologically diverse clean, low-cost renewables, including from renewable energy zones in Victoria and NSW,” she said.

“Allowing more renewables into the power system and utilising better access to deep storage from Snowy 2.0 will reduce carbon emissions and improve the reliability and security of electricity supply as ageing coal power stations close.”

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