Two-year delay for VNI West sparks fresh doubts over Australia's renewable energy ambitions

Sky News AU

15 hours ago

Australia's shaky transition to clean energy has suffered a major blow, with the roughly $4 billion VNI West electricity interconnector project now delayed by two years – moving the delivery date from 2028 to late 2030.
The postponement raises serious concerns over whether the Albanese government can meet its renewable energy targets, including a plan to double the grid's renewable share to 82 per cent by the end of the decade.
The pressure is mounting as major coal plants like Victoria's Yallourn station are still on track to close in 2028, leaving a potential gap in supply.
Stretching 240 kilometres across Victoria and New South Wales, the VNI West project is facing stiff resistance from landowners and farmers who have become increasingly vocal about the proposed route slicing through regional communities.
Back in May, VicGrid – the agency overseeing the project on Victoria's end – told The Australian that delays for both VNI West and the Western Renewables Link were in part due to the challenge of earning 'social licence' among affected communities.
The new timeline deepens concerns around the state's broader transition strategy, especially given the critical role of transmission in delivering new solar and wind generation from renewable energy zones in western Victoria and along the Murray River.
The Australian Energy Market Operator (AEMO) says the delay reflects 'revised planning, design and construction assumptions' and allows for a more inclusive process with landowners.
'The new construction completion target allows more time for detailed environmental, geotechnical and cultural assessments, along with more meaningful landholder engagement on access and easement arrangements,' said Claire Cass from AEMO's Transmission Company Victoria (TCV) unit.
'We know this updated timeline may be frustrating, but we're committed to working with landholders respectfully and providing the support they need to consider what is best for them, their properties and farming or business ­operations.'
The state government insists the delay won't impact reliability in the short term.
'AEMO has indicated the revised project timeline will not impact the reliability of Victoria's electricity network,' a government spokeswoman said.
AEMO is expected to factor in the revised deadline in its upcoming Electricity Statement of Opportunities report due in August.
The delay comes on the back of AEMO's recent warning in May, when it flagged a blowout in the cost of delivering $20 billion worth of transmission projects. These soaring costs – partly fuelled by skill shortages and growing resistance from rural communities – could add to household power bills.
Overhead transmission line costs have spiked by as much as 55 per cent, while substation costs have surged up to 35 per cent, based on updated estimates from AEMO's 2024 modelling.
The new 2030 timeline also aligns with the release of TCV's easement and access package for VNI West, set to be delivered directly to landowners along the proposed route.
'For the first time, landholders will receive detailed information about the project benefit payments they can receive, indicative property-specific impact compensation and field survey access terms,' Ms Cass said.
TCV stressed that reviewing the documents or engaging with liaison officers did not mean landowners were endorsing the project.
'The approach simply provides landholders with more say on how the project may affect them and their properties, so that compensation accurately reflects the impact,' Ms Cass said.
Meanwhile, AusNet – developer of the 190km Western Renewables Link – last week announced a new 'Near Neighbour' payment scheme, offering up to $40,000 to households within a kilometre of the planned infrastructure, in an attempt to ease opposition.
'The Near Neighbour Benefit Program was a recognition that neighbours have similar experiences to those landholders directly hosting infrastructure on their land,' AusNet said.
Despite these financial sweeteners, frustration continues to grow among Victorian farmers, many of whom say they're bearing the brunt of the state's renewables push.
They accuse the Allan government of ignoring their concerns and putting food security at risk in its haste to overhaul the power grid.
Both the VNI West and Western Renewables Link projects were originally due online in 2028, a timeline that aligned with the planned closure of several legacy coal plants.
Now, officials and energy experts are sounding the alarm over the growing gap between ambition and delivery, as Victoria targets 65 per cent renewables by 2030 and 95 per cent by 2035.
The state's transition blueprint includes 5.2 million solar panels, nearly 1,000 wind turbines, and transmission corridors covering 7 per cent of Victoria's landmass, all under intense scrutiny as delays and discontent mount.