VicGrid scraps Central Northern Renewable Energy Zone - Energy News Bulletin

VicGrid has scrapped the Central Northern Renewable Energy Zone, a planned solar and wind region in regional Victoria. The decision follows a reassessment of transmission and generation requirements across the state. No alternative plan has been announced to replace the zone's intended capacity contribution.

Where this fits

This abandonment exposes a core cost problem in the renewables-first grid: the transmission overbuild required to wire renewables to demand centres is hitting hard constraints. The Central Northern zone was part of the infrastructure stack meant to firm Victoria's grid; its removal means either the state retains excess transmission capacity from other zones (sunk cost) or it forgoes the renewable output entirely (leaving a gap). Neither option was priced into the original net-zero modelling. This is the whole-system cost story: renewable megawatt-hours are cheap, but the wires, the land, the coordination and the firming fuel to make them reliable are not.

What it means

Victoria now has fewer generation options for the same transmission investment, or must spend more to wire alternative zones and absorb land-use and environmental conflict elsewhere. The state's path to decarbonised electricity has become more expensive and logistically fragile. A nuclear plant, firm, compact, and needing far less transmission reach, would occupy a fraction of the land and require no weather-dependent gas firming. Australia remains prohibited by law from pursuing that option, meaning the renewable grid will continue to bear the full cost of its own unreliability. That choice is not forced by physics or economics; it is political.