The Victorian Government has formally declared six Renewable Energy Zones (REZs) this week, a pivotal move that solidifies the state’s strategy to achieve 95% renewable energy by 2035 and deliver significant benefits to regional communities. The announcement by VicGrid, the state’s dedicated infrastructure planner, provides a clear framework for coordinating new wind, solar, and battery storage projects across the state, following more than two years of extensive consultation with landholders, Traditional Owners, and industry stakeholders.

This declaration, made around late May and early June 2026, marks a crucial milestone in Victoria’s ambitious energy transition, aiming to replace ageing coal-fired power stations with a robust, clean energy supply. The REZs are designed to streamline project development, reduce the need for redundant transmission infrastructure, and ensure that local communities directly benefit from the renewable energy rollout.

Victoria’s Declared Renewable Energy Zones

VicGrid has formally established five onshore REZs and one dedicated shoreline REZ for offshore wind connections. These zones are strategically located to maximise access to strong wind and solar resources near existing or planned transmission lines, while also considering community and environmental impacts.

The six declared REZs are:

  • South West Renewable Energy Zone
  • Central Highlands Renewable Energy Zone
  • Gippsland Renewable Energy Zone
  • Western Renewable Energy Zone
  • North West Renewable Energy Zone
  • Gippsland Shoreline Renewable Energy Zone

The Gippsland Shoreline REZ is specifically designed to host the underground cables and connection infrastructure for offshore wind projects, a key component of Victoria’s future energy mix. While the 2025 Victorian Transmission Plan initially proposed a Central North REZ, consultation on this particular zone will continue, indicating a flexible and responsive planning approach.

“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,” stated VicGrid chief executive Alistair Parker. “Renewable energy zones will ensure better coordination of projects and signal to communities and industry where the development of renewable energy should occur.”

Bolstering Investment and Community Benefits

The formal declaration provides greater certainty for investors and developers, which is essential for attracting the capital needed to build out the state’s renewable capacity. The Victorian Government has already committed AUD$540 million to establish the REZ Fund and VicGrid itself, underscoring its financial backing for this infrastructure. Furthermore, the Commonwealth Government is contributing an estimated AUD$101 million to Victorian REZ Development Plan Stage 1 projects, with Victoria covering the remaining costs.

A cornerstone of the REZ framework is the Renewable Energy Zone Community Benefits Plan, which includes the introduction of new Community Energy Funds. These funds are designed to channel investment directly into local projects that improve outcomes and create social and economic value for communities hosting new energy infrastructure. This local decision-making approach aims to address community concerns and ensure tangible benefits, such as local job creation and enhanced infrastructure, are realised. The Clean Energy Council (CEC) welcomed new social and community engagement guidelines in Victoria on June 15, 2026, noting their importance for successful project delivery.

Towards a Stable and Affordable Energy Future

Victoria has ambitious legislated targets, aiming for 65% renewable energy by 2030 and 95% by 2035. Complementing these are energy storage targets of at least 2.6 GW by 2030 and 6.3 GW by 2035, which will include grid-scale batteries and aggregated household batteries operating as virtual power plants. These targets are critical for maintaining grid reliability and putting downward pressure on electricity prices as coal generation retires.

The REZs are central to delivering these targets by providing a coordinated approach to grid development. This coordination will help manage the influx of new renewable generation and ensure stable electricity supply for homes and businesses. For households considering their own energy transition, understanding the broader grid developments can inform decisions about technologies like home batteries. Unlock $3,700+ in Rebates: Your 2026 Guide to Australian Home Battery Systems

As part of this forward-looking strategy, VicGrid has also released draft Victorian Transmission Plan Guidelines for public consultation. These guidelines will inform the development of the next Victorian Transmission Plan in 2027, which will offer a 25-year outlook on the state’s transmission and renewable energy generation needs. This long-term planning is vital for ensuring Victoria’s energy system remains affordable, reliable, and sustainable as the state continues its rapid shift away from fossil fuels. The transition also encourages homeowners to explore options for greater energy independence, such as a Smart Home Energy Systems: Slash Your 2026 Australian Electricity Bills by Up To 30% to maximise the benefits of a greener grid.

The formal declaration of these REZs is not just a regulatory step; it represents a tangible commitment to a future powered by clean energy, with significant economic and environmental benefits for all Victorians. It also supports the broader movement towards electrifying homes and businesses, reducing reliance on gas. Is a Gas to Electric Home Conversion Worth It in Australia 2026? Unlock $1,000s in Savings & Rebates