Danny O’BRIEN (Gippsland South) (14:36): (52) My question is to the Minister for Energy and Resources, and I ask on behalf of my constituents why the minister will not consider up-front undergrounding of transmission lines as the government considers its renewable energy zones around the state. I am very aware of the additional costs that will likely apply to underground versus overhead transmission lines, but the government has recently gone through its Victorian transmission investment framework preliminary design with a whole lot of consultation in which the vast majority of constituents – people involved with prospective overhead transmission lines – asked the question about undergrounding. The minister needs to come out and explain and give information about the potential costs and benefits of overhead versus underground. We certainly welcome the notion that the government will provide additional payments to those residents who host transmission lines – I am not sure that what is being proposed is enough – but there does need to be better explanation about whether underground is relevant and affordable for these new transmission lines.
I thank the member for Gippsland South for his question.
Victoria is experiencing a once-in-a-generation energy transition. As ageing coal-fired power stations retire and we respond to the challenges of climate change, there is an urgent need to deliver the cleaner, cheaper and more reliable sources of energy that will power Victoria into the future.
Offshore wind has a key role to play and Victoria is leading the way in developing this important new source of electricity in Australia. We have set bold targets to bring online at least 2 gigawatts of capacity by 2032, 4 gigawatts by 2035 and 9 gigawatts by 2040. As a result, we will create thousands of jobs, drive billions of dollars of investment and position Victorian as the home for the offshore wind industry in Australia and our region.
To leverage the opportunities that offshore wind will deliver, and ensure we have sufficient new capacity to power Victoria, we need new transmission infrastructure to transport electricity to homes and businesses across the state.
The Victorian Government recognises that the transmission infrastructure to support the energy transition will have impacts on the communities that host it. The way that this infrastructure has been delivered in the past is not good enough and we are determined to do better. We are proposing significant reforms to how transmission infrastructure is planned and delivered through the Victorian Transmission Investment Framework. This proposed reform would see local communities, Traditional Owners and regional stakeholders given a much stronger voice in the planning of this infrastructure. These reforms propose a new strategic land use planning process to ensure that the impacts of infrastructure are considered at the outset. New benefit sharing arrangements will ensure that the benefits of the energy transition are more equitably shared with regional communities hosting infrastructure. Community engagement is embedded throughout the process to give locals a real voice in a way that has not been achieved under the current arrangements.
With regard to offshore wind, the Victorian Government has stepped in to reduce impacts on local communities and costs for consumers. We do not want to see a situation where multiple private developers are all proposing their own power lines, creating a spaghetti effect of multiple transmission lines criss-crossing the landscape.
That is why we have announced that VicGrid will lead development of new transmission to connect offshore wind as part of our overarching role in planning Victoria’s Renewable Energy Zones (REZs).
During 2023, we will progress from early planning into more detailed investigations and ongoing local engagement to identify optimal locations for connection points with offshore wind generators, and a preferred transmission corridor where required.
We continue to work closely with the Australian Energy Market Operator (AEMO), the Commonwealth Government and Offshore Wind Energy Victoria as we begin to consider transmission project options.
VicGrid’s work will consider a range of different corridor and concept design options. This includes the potential transmission corridors identified in Gippsland by Star of the South, AusNet and other developers. We will work with these proponents on an approach to ensure that work to date on the potential transmission corridor can be considered in the planning work VicGrid will now lead.
No decisions have been taken at this stage about whether these lines should be overhead or underground and we need to go through a thorough process of technical planning and community engagement to make these decisions in Gippsland. However, it should be noted that undergrounding has a number of cost, technical and environmental challenges.
While the exact cost difference between overhead and underground varies depending on the project, underground lines are considerably more expensive. These additional costs would be passed onto to all consumers through electricity bills.
Underground lines can also prohibit cropping or forestry whereas most types of agriculture can continue to operate under overhead lines.
There is a lot of work to be done to determine what are the best solutions for transmission for offshore wind. The ultimate decision will balance the input of local communities, Traditional Owners and stakeholders with technical constraints and the need to deliver affordable power to all Victorians. The government is committed to engaging in good faith with local communities to understand their concerns and priorities and to seek to balance these with the urgent need to deliver the new energy sources that will secure Victoria’s energy future.
Hon Lily D’Ambrosio MP
Minister for Climate Action
Minister for Energy and Resources
Minister for the State Electricity Commission