Victoria has officially declared 5 onshore REZs across the state, along with an offshore REZ
The zones are intended to support solar, wind, storage, and offshore wind grid connections
The plan is part of a broader energy transition aimed at replacing coal generation and meeting future electricity demand
Victoria has formally designated 5 onshore Renewable Energy Zones (REZs), along with the Gippsland Shoreline REZ, as the Australian state ramps up its transition away from coal-fired power generation. The move comes as Victoria prepares to close its remaining coal plants over the next decade and seeks to expand renewable energy capacity to meet rising electricity demand.
The 5 onshore REZs are South West, Central Highlands, Gippsland, Western, and North West. The Gippsland Shoreline REZ will host underground cables connecting offshore wind energy to the grid (see Australia’s Victoria Proposes 6 New Renewable Energy Zones).
These zones were determined following over 2 years of consultation with all stakeholders, including the energy industry, and a strategic land use assessment.
VicGrid focused on zones where agricultural practices are considered compatible with renewable energy development, such as dryland broadacre cropping and grazing. It steered clear of land parcels with intensive agriculture and irrigated districts.
However, the administration said the right to choose to host renewable energy projects on land within these zones rests with the landholders.
The state government is opened consultation for the 6th onshore REZ, the Central North Zone. Altogether, all 7 REZs cover 7% of the state’s land area, but only about 11% of the zones’ combined area will be required to host solar and wind projects. This will be equivalent to less than 1% of Victoria’s total land area.
To be managed by VicGrid, the REZs will make use of the existing infrastructure to integrate solar, wind, and battery storage projects, thus reducing the need to build additional transmission infrastructure.
“The Minister’s declaration of zones will enable VicGrid to set clearer rules around how projects gain access to the grid, including expectations for how they engage with communities and deliver benefits,” said VicGrid Chief Executive Alistair Parker.
The REZs were proposed in the 2025 Victorian Transmission Plan that sets out the transmission infrastructure the state requires to build over the next 15 years to ensure safe, reliable, and affordable power. It estimates 2.3 GW to 8.9 GW of new utility-scale solar capacity, along with 4.8 GW to 7.7 GW of new short and long-duration utility-scale storage capacity to come online by 2040, across various scenarios.
Now, VicGrid is preparing for the 2027 Victorian Transmission Plan, which takes a 25-year outlook with the target to update it every 4 years. The declared REZs will serve as the basis for determining if new areas are needed for generation and storage.
Over the next 12 to 24 months, VicGrid will finalize rules for renewable energy and storage projects to follow within the declared REZs, prioritizing community engagement and social values. Grid capacity for each of these zones will be allocated through a competitive process.
Under the federal government’s Capacity Investment Scheme (CIS), at least 5 GW/11 TWh of generation and 1.7 GW/6.8 GWh of storage capacity will be tendered in Victoria between 2024 and 2026, for delivery by 2030. This will include a maximum of 1.5 GW of solar projects.
The state targets 95% renewable energy generation by 2035 and net-zero emissions by 2045. In the state’s last financial year (ended June 30, 2025), 42% of Victoria’s electricity was produced by cheap renewable energy. Back then, Victoria’s Minister for Energy and Resources, Lily D’Ambrosio, said that the state hosts over 90 large-scale renewable energy projects, adding almost 7 GW capacity to the grid while rooftop solar contributed almost 11% of its energy. The state had over 50 GW of proposed or committed renewable energy projects, which the government said it was fast-tracking through the Development Facilitation Program.