Victorian Access Regime: VicGrid’s new regime for access to the transmission network

VicGrid, responsible for coordinating the planning and development of Renewable Energy Zones (REZs) and soon to be responsible for the planning of the Victorian transmission network following transfer of the declared network functions from the Australian Energy Market Operator (AEMO), is changing the way renewable energy and storage projects gain access to the Victorian transmission network.

This new approach, known as the Victorian Access Regime (VAR), will replace the current "open" access regime. It seeks to promote development of renewable energy infrastructure within REZs and provide developers with greater confidence in their ability to supply energy to the market by managing capacity in the transmission network to reduce the risk of excessive network curtailment in REZs.

The VAR is expected to come into effect in mid-March 2026.

The Victorian Access Regime

The VAR will establish two pathways for renewable energy projects to access the transmission network:

• REZ access scheme – under this pathway, eligible renewable energy generation, energy storage systems or hybrid projects inside a declared REZ will be required to apply (under a competitive application process) for a REZ scheme authority before they can receive an offer to connect; and

• Grid Impact Assessment (GIA) – under this pathway, proposed generation, storage and hybrid projects outside of a declared REZ, and technologies that are not covered by the REZ access scheme, will be required to apply for a grid impact authority before they can receive an offer to connect.li>

The Access and Connection Consultation Paper specifies that once the regime commences, all projects seeking to establish, modify or alter a connection will need to apply via one of the above pathways. However, projects:

• which are already connected or operational; or

• in receipt of an offer to connect, or acceptance of a submission to alter an existing facility, from AEMO or VicGrid,

on or before commencement of the VAR will not be required to apply for a REZ scheme authority or grid impact authority.

VicGrid is also developing transitional arrangements under which streamlined application processes will apply to certain projects, such as those that are advanced in their development processes prior to the commencement of the VAR or are successful following select Capacity Investment Scheme tenders.

VicGrid is currently considering the treatment of:

• standalone energy storage systems inside a declared REZ, as they can act as either a generator or a load depending on their state of charge and market conditions, and has therefore flagged that these projects may be subject to either the REZ scheme access or the GIA; and

• hybrid storage projects (ie., where storage is located alongside a renewable energy generator), which generally maximise revenue for the combined portfolio. Accordingly, these projects will likely be treated as renewable energy generation projects.

In any case, it is intended that both application pathways will operate in parallel with the current connections process (as set out in Chapter 5 of the National Electricity Rules) to prevent project development critical path timelines from being negatively impacted.

REZ access schemes

VicGrid's Access and Connection Consultation Paper specifies that a REZ access scheme will set out:

• eligible renewable energy technologies located inside the REZ which are subject to the scheme;

• access limits inside the REZ for eligible projects seeking connection to the network or seeking a system change ie., caps (expressed in megawatts) on connections to ensure technical constraints are not violated and efficient levels of network curtailment forecast are not exceeded.  Access limits are proposed to be set having regard to the hosting capacity of the transmission network as planned in the 2025 Victorian Transmission Plan over a 15-year horizon;

• the non-price competitive application process, comprising the release of an invitation to apply, evaluation of submitted applications and negotiations (if applicable);

• the types of conditions to which REZ scheme authority holders will be subject. These conditions are aimed at ensuring capacity within the REZ is maximised for the benefit of energy consumers, and providing confidence to landholders, communities and Traditional Owners that developers will follow through with the engagement and benefits approach put forward in their application; and

• the fee payable by an applicant and the annual REZ scheme fee payable by REZ scheme authority holders, to cover the cost of administering the relevant REZ access scheme, REZ Community Energy Fund and Traditional Owners Fund.

VicGrid intends to make the maximum amount of access available for allocation, capped at the access limit, for each REZ over a 10-year period, however will not be obliged to allocate access up to that access limit. VicGrid also intends to undertake period assessments to determine whether additional access needs to be allocated to a REZ to maintain reliable, secure and affordable electricity supply.

Determination of which projects are allocated access in each REZ will be based on a range of factors, including:

• market interest and portfolio-level considerations, to ensure adverse outcomes or outcomes not aligned with the VAR or Victorian transmission planning objectives do not arise;

• the following eligibility and merit criteria:

  • meeting expectations for community, landholder and Traditional Owner engagement and providing meaningful social value and economic benefits, having regard to the Community Engagement and Social Value Guidelines (refer below);

  • delivery capacity and capability of the applicant;

  • commercial and technical readiness of the proposed project; and

  • contribution to meeting the VAR and VTP objectives;

• modelled generation and storage capacity in the VTP; and

• electricity supply factors, including attrition of eligible projects and market changes.

Successful applicants will be issued a REZ scheme authority, subject to the REZ scheme authority conditions, for the life of the project or until disconnection.

Grid Impact Assessments

The Draft Grid Impact Assessment Guidelines published by VicGrid indicates that the GIA application process may involve an optional early consultation stage, during which VicGrid and an applicant may undertake discussions to determine whether the relevant project will be captured by the GIA and to clarify any issues which may need to be considered in a GIA application.

To make a GIA application, an applicant will be required to submit a GIA application form which must provide certain information including project details, a site map, and how the project meets both of the GIA assessment criteria:

Criterion 1 (network curtailment) – the proposed connection is unlikely to result in excessive network curtailment of existing and planned REZ scheme generators in Victoria. This criterion will be assessed using a 2-test approach, where an applicant can choose which test to undertake (or both):

• Test 1 (steady-state Power System Simulation for Engineering test) – this test requires the applicant to carry out load flow power system studies using worst case boundary conditions specified by VicGrid and informed by the VTP; and

  • Test 2 (market-based PLEXOS test) – this test provides a detailed quantification of the forecast impact of the applicant on the network based on network curtailment of REZ scheme generators (rather than economic curtailment); and

Criterion 2 (engagement and benefits) – the applicant meets government expectations for community, landholder and Traditional Owner engagement, and provides meaningful social value and economic benefits.

The applicant will also be required to pay a GIA application fee.

In demonstrating that the project satisfies:

• Criterion 1, an applicant using Test 1 will need to undertake a self-assessment using a data pack provided by VicGrid.  If: (i) a self-assessment indicates that the project may or will result in excessive network curtailment; (ii) VicGrid requests additional analysis because the application did not include sufficient information; or (iii) the applicant has opted not to undertake Test 1 to satisfy Criterion 1, the applicant may choose to submit an advanced GIA application where Test 2 will apply; and

• Criterion 2, applicants must include a community, landholder and Traditional Owner engagement and benefits plan, developed in accordance with requirements in the National Electricity (Victoria) Act 2005 (Vic) (NEVA) and guidance set out in the Community Engagement and Social Value Guidelines.

Once an application has been validated, to ensure the application contains the required information, VicGrid intends to assess the application and either:

• accept the application where it satisfies the criteria; or

• provide feedback to the applicant where the application does not meet one or both of the criteria – in which case, the applicant will have only one opportunity to revise its application to respond to such feedback.

If the GIA applicant is successful, VicGrid will issue a GIA, subject to conditions based on requirements in the NEVA, activities and commitments included in the GIA application and any other conditions reasonably required by VicGrid. If the GIA applicant is unsuccessful, VicGrid will refuse the GIA application (with reasons) and the GIA applicant may then reapply.

Community Engagement and Social Value Guidelines

The Community Engagement and Social Value Guidelines for Renewable Energy and Transmission Projects (CESV Guidelines) will establish 48 minimum expectations for how renewable energy and transmission project developers must engage with, and deliver social value and economic benefits to, communities, Traditional Owners and landholders and neighbours.

The CESV Guidelines will also aim to ensure that:

• the transition to renewable energy delivers genuine, long-term social and economic benefits;

• communities, Traditional Owners and landholders are provided more agency in shaping the energy transition impacting them and the benefits flowing to communities from renewable energy projects.

Application of the CESV Guidelines

The CESV Guidelines are intended to apply to all developers seeking to connect renewable energy generation, storage, or transmission projects to Victoria’s transmission network, and play a pivotal role in the new VAR and VicGrid's assessment of applications to connect.

Transmission delivery partners engaged by and working with VicGrid to deliver transmission projects must also adhere to these guidelines, alongside other government policies such as the Local Jobs First Policy and Social Procurement Framework.

Engagement expectations

The draft CESV Guidelines published by VicGrid emphasise early, ongoing, and meaningful engagement with four main groups:

• communities surrounding the project – developers will be required to identify and engage with all relevant communities, including culturally and linguistically diverse communities, local government, commercial fishing and other marine users (in the context of offshore wind), and civic and representative organisations. Engagement should begin before planning permit applications are submitted and continue throughout the project lifecycle;

• host landholders – developers will be required to ensure open communication with those hosting infrastructure, and negotiate fair and reasonable commercial agreements in relation to the hosting of infrastructure, easements, construction access and road access that clearly address compensation, responsibilities, and end-of-life arrangements. Host landholders must be provided with adequate time to seek independent advice before entering into such agreements;

• neighbours and nearby landholders – developers will be required to provide transparent information to, and consult with, neighbours and nearby landholders on the potential impacts of generation and transmission infrastructure, and actions to manage and mitigate such impacts; and

• Traditional Owners – engagement with Traditional Owners should be respectful and culturally safe, uphold legal rights, and enable self-determination. Developers will be expected to research Traditional Owner protocols, engage early, and remunerate Traditional Owners for their contribution of knowledge, time and expertise.

Creating social value and economic benefits

Developers will be required to design and deliver initiatives (separate to existing statutory compensation schemes and payments), tailored to the needs and priorities of the relevant community, that create lasting social and economic value.

These may include:

• investing in community infrastructure to build and further develop communities;

• supporting community energy initiatives that improve energy affordability, efficiency, reliability, access and resilience;

• contributing to or establishing community benefit funds which delivery grants or sponsorships to community organisations;

• supporting Traditional Owners and community projects to care for Country and restore ecosystems and biodiversity; or

• building community capability and capacity in areas such as emergency response, local leadership, and energy literacy.

In designing these initiatives, developers will need to determine an appropriate budget, having regard to various factors such as technology type, local context and community interest.

Compliance monitoring and enforcement

Once access to the transmission network has been granted, VicGrid will monitor each authority holder's compliance against the REZ scheme authority conditions or GIA conditions (as applicable), which may include meeting its community, landholder and Traditional Owner commitments.

VicGrid may enforce certain penalties or revoke an authority in the event of non-compliance