The Clean Energy Finance Corporation (CEFC) has committed an additional $120 million to the Victorian component of the VNI West transmission project, bolstering efforts to secure Australia’s energy future through renewable infrastructure development. This investment, provided via the Rewiring the Nation (RTN) program, will assist the Australian Energy Market Operator (AEMO) advance the project, which is crucial to the nation’s clean energy transition and net zero goals.
The VNI West transmission project, identified as an actionable Integrated Systems Plan (ISP) project, will play a significant role in connecting the energy grids of Victoria and New South Wales. The project will link renewable energy zones in both states, facilitating the transfer of renewable energy and improving electricity supply reliability. With the rapid closure of coal-fired power stations, VNI West is essential in supporting Australia’s energy transition by integrating low-cost renewable power into the grid.
The total project cost is estimated at $3.6 billion, and once completed, the VNI West link is expected to unlock up to 3.4 GW of additional renewable generation capacity in Victoria. It will also enable an estimated 1.9GW of energy transfer between Victoria and New South Wales, helping to stabilise the electricity supply and create a more resilient energy network. This capacity boost is essential as the Australian energy market adapts to the increasing reliance on renewable energy sources.
Ensuring Energy Security
AEMO has emphasized the importance of VNI West in maintaining electricity supply reliability. As Australia faces the rapid retirement of coal-fired power plants, the need for reliable and secure energy infrastructure is more urgent than ever. VNI West is seen as a critical solution to help mitigate the potential shortfall caused by the loss of traditional baseload power from coal. By integrating renewable energy sources like wind and solar, the project will contribute to a more sustainable and reliable energy future.
Moreover, the project is expected to enhance Victoria’s energy security by providing greater access to Snowy 2.0, one of Australia’s most significant pumped hydro storage projects. Snowy 2.0 is designed to store renewable energy and provide dispatchable power during periods of peak demand. This link will allow Victoria to tap into Snowy 2.0’s energy reserves, further bolstering its energy resilience.
CEFC’s Contribution
The additional $120 million from the Clean Energy Finance Corporation (CEFC) will be used by AEMO for early-stage work in Victoria, which includes community consultations, landholder engagement, and discussions with Traditional Owners. The funding will also go towards ongoing investigations into the project’s preferred route and corridor, ensuring all stakeholders are involved in the decision-making process.
CEFC CEO Ian Learmonth stressed the critical role of secure, reliable energy in Australia’s future low-emission economy. “As coal retires and our emissions target deadlines draw nearer, CEFC finance is key to enabling the Rewiring the Nation (RTN) projects that will transform our energy grid,” Learmonth said. He highlighted the importance of renewable energy in achieving the country’s net zero emissions goal by 2050.
National Infrastructure Strategy
The VNI West project is a key component of AEMO’s 2024 ISP, the primary blueprint for the National Electricity Market (NEM). The ISP forecasts that 90% of Australia’s ageing coal-fired power stations will retire by 2035. The ISP outlines a need for 10,000km of new and upgraded transmission lines by 2050 to ensure the grid remains stable and affordable. About a quarter of this infrastructure is already underway, and half is set to be delivered within the next decade.
In addition to the transmission expansion, the ISP identifies the need for a six-fold increase in grid-scale renewable generation, amounting to 127 GW by 2050. The plan also calls for nearly quadrupling Australia’s firming capacity, which includes dispatchable storage solutions such as pumped hydro, grid-scale batteries, and virtual power plants.
Rewiring the Nation Fund
The Rewiring the Nation (RTN) Fund is a cornerstone of Australia’s strategy to meet its 82% renewable energy target by 2030. Since its inception in July 2023, the RTN program has committed approximately $850 million to critical infrastructure projects, including VNI West. Other key investments through the RTN Fund include $490 million for the Central West Orana Renewable Energy Zone (REZ) and $140 million for the New South Wales section of VNI West.
The Federal Government has allocated an additional $19 billion to the CEFC for RTN-related projects, focusing on initiatives that improve grid resilience and reduce emissions. CEFC’s RTN investment priorities include major transmission projects like VNI West, as well as distribution networks and long-duration energy storage systems.
By securing additional funding for VNI West, the Clean Energy Finance Corporation (CEFC) and Australian Energy Market Operator (AEMO) is advancing a critical project that will help Australia achieve its renewable energy and net zero targets while ensuring a secure and reliable electricity supply for generations to come.
