Australia’s Victoria formally declares five renewable energy zones

The order sets the geographic boundaries and indicative transmission hosting capacities for each zone. It requires that solar, wind, and battery energy storage system (BESS) developers meet government expectations for community engagement and deliver social value and economic benefits.

The five onshore zones, South West, Central Highlands, Gippsland, Western and North West, span regional Victoria from the state’s south-west pastoral country to the Latrobe Valley in Gippsland.

The Gippsland region will host both the Gippsland REZ, located between Morwell and Sale, and the Gippsland Shoreline REZ, which will house the underground cables connecting Australia’s first offshore wind power plants to the main grid.

VicGrid chief executive Alistair Parker said the declarations would improve coordination of solar, wind and battery projects while reducing the need for unnecessary transmission infrastructure.

“Victoria’s coal-fired power stations are due to close over the next 10 years, and a significant amount of new renewable energy development is needed to make sure we can meet increasing demand for electricity,” Parker said.

“Renewable energy zones will ensure better coordination of projects and signal to communities and industry where the development of renewable energy should occur.”

A long road to formal designation

The declared zones are the product of a framework that has evolved considerably since its earliest drafts.

When the original Victorian Transmission Plan was published in May 2025, it proposed seven REZs to help achieve the state’s target of 2.7GW of utility-scale solar PV generation by 2040, alongside 5.8GW of new onshore wind and 9GW of offshore wind, with the zones collectively covering around 7% of Victoria’s land area.

Following public consultation, the plan was revised: an updated transmission plan released in August 2025 added 200,000 hectares of designated renewable energy area, expanding the total footprint to 1.88 million hectares across nine distinct zones, up from seven in the original draft, as the government incorporated industry and community feedback.

The final declared zones differ from both earlier drafts. The most recent round of consultation led to the refinement of zone boundaries and the removal of some areas, including a section of the South West zone, which was set aside in recognition that more work was required on its suitability.

The northern section of the South West zone, known locally as the Dundas Tablelands, was excluded due to concerns about environmental and biodiversity values and land-use constraints.

Changes were also made to the Central Highlands REZ, which covers areas to the west and south of Ballarat, with an area at the northern end removed and a small section added in the south.

One proposed zone, the Central North REZ, which had been proposed in two sections covering areas between Bendigo and Tatura and between Shepparton and Glenrowan, was not declared and will be subject to a further formal consultation round before any decision is made.

Targets and transmission

The declarations arrive as Victoria pushes toward legislated renewable energy targets of 65% by 2030 and 95% by 2035.

The REZ framework is designed to coordinate private development within designated areas rather than to fund or build generation capacity directly.

Each declaration sets a hosting capacity, the volume of renewable energy generation the planned transmission network within that zone can support, and establishes conditions around community engagement, First Nations consultation and the delivery of local economic benefits.

Only a small proportion of the land within each zone will be needed for renewable energy development, with much less than 1% of Victoria’s total land area required for projects.

Concurrent with the REZ declarations, VicGrid released for consultation the draft 2026 Victorian Transmission Plan Guidelines, which will inform the development of the next full transmission plan in 2027.

That document will take a 25-year view of the state’s transmission and generation needs, covering a period that will see the closure of all remaining coal-fired power stations and the full build-out of Victoria’s offshore wind industry off the Gippsland coast.