The Victoria to New South Wales Interconnector (VNI West) is a proposed double-circuit 500 kV overhead transmission line that will connect the Western Renewables Link in Victoria to EnergyConnect in New South Wales. It will strengthen the grid connection between Victoria and NSW, maintaining the reliability and security of the grid in both states. VNI West is one of five actionable projects in the 2022 Integrated System Plan (ISP), confirmed in the latest 2024 ISP, and critical to maintaining reliable electricity supply for all Victorians as coal-fired generation is switched off.

Coal generation is rapidly retiring, putting the reliability of our electricity supply at risk as energy demand continues to grow. Renewable generation, supported by storage (batteries and hydro) and gas, will fill the supply gap. New transmission is needed to connect renewable generation to homes, schools, and workplaces. Renewables projects will be developed in the sunniest and windiest parts of the state – which are not the same places where coal generators are located. As the location of electricity generation changes, new transmission lines will be required. While we will continue to use the existing network wherever possible, new transmission lines must be built to connect new sources of generation with the homes, schools and businesses that use the power.

VNI West will put downward pressure on electricity prices over time, by unlocking access to cheaper renewable energy, maintaining the efficiency of the electricity grid as coal-fired power stations retire.

VNI West will enable more renewable energy to flow between states, reduce reliance on expensive, ageing coal-fired generation and enhance competition in the electricity market, which can help put downward pressure on prices.

Transmission Company Victoria (TCV) is a new company created by AEMO Victorian Planning to progress the VNI West transmission project.

AEMO’s 2022 Integrated System Plan (ISP) first identified VNI West as a project to be progressed urgently but did not identify any other major transmission developments in the region under the 'most likely' scenario. Australia’s power system is undergoing a once-in-a-generation transformation, and it is not expected that transmission investment at the current scale and pace will need to continue once the power system has transformed to a low-emission system. While there will always be growth in renewable generation and demand that will require network upgrades, these are expected to be minor in the absence of a major technology disruptor.

Transmission Company Victoria (TCV) is currently leading the development phase of the VNI West project, including early works, environmental and planning approvals, and community engagement. TCV was created by the Australian Energy Market Operator (AEMO) to progress this critical transmission infrastructure.

AEMO has commenced a process to select a Development Partner to work alongside TCV. This partner will support the finalisation of early works and, in time, take on the construction, ownership and operation of VNI West.

AEMO released a Registration of Interest (ROI) to market in September 2024 ahead of an Invitation to Tender (ITT) in November 2024, to find a development partner for the Victorian section of VNI West. This process identified a shortlist of organisations with the capability and capacity to deliver the project in Victoria.

The successful tenderer will be announced by the end of the year and will undergo an extensive onboarding period, working closely with AEMO, TCV, and VicGrid. This includes supporting the Environment Effects Statement (EES) process and ensuring continuity in relationships with landholders and communities. During this time, there will be no change in day-to-day dealings with TCV staff.

TCV will continue to lead the project through development, and community conversations will remain central to the project’s progress. Councils, community stakeholders, and the Community Reference Group (CRG) will continue to engage with the project team.

A collaborative contract model will be used to ensure the new Development Partner builds on the work done to date, brings additional expertise and resources, and maintains trust with local communities. When the time is right, and before construction begins, the intention is that TCV will be acquired by the selected Development Partner.

AEMO has started a process to select a partner to work alongside TCV to continue to develop the VNI West project, assist with the completion of the early works, and to eventually construct, own and operate VNI West.

AEMO selecting a partner via a tender process by the end of the year. There will be an extensive onboarding period where the successful tenderer will work alongside AEMO to continue to develop the project including the EES process over the next 18 months.

Before the project moves into construction, when the time is right, the intention is that TCV will be acquired by the selected partner. It has always been AEMO’s plan to find a Transmission Network Service Provider (TNSP) to build, own and operate VNI West.

The estimated cost of the VNI West transmission project is approximately $7.6 billion, for both the Victorian and New South Wales sections, updated in AEMO’s 2025 Electricity Network Options Report (ENOR). This figure reflects updated planning, design, and construction assumptions and replaces the early-stage estimate of $3.6 billion, which was published in the 2024 Integrated System Plan (ISP).

The increase is consistent with broader industry trends, where transmission delivery costs have risen due to inflation, supply chain pressures, and competition for skilled labour. VNI West is not immune to these challenges, but remains a critical investment in Victoria’s energy future.

Importantly, the cost also includes stronger environmental, social, and community benefit measures—such as TCV’s Social Value program, which delivers support to landholders, impacted neighbours, and local communities.