VicGrid has appointed Iberdrola Australia as its development partner for the Victorian section of the VNI West project, a 500 kV, 240 km double-circuit transmission line linking western Victoria to New South Wales.
The project is a critical component of Australia’s National Electricity Market, designed to enhance cross-border energy transfer, support growing renewable generation, and maintain grid reliability as older coal-fired power stations retire.
Following an approach similar to early contractor involvement (ECI), the development partner stage will enable Iberdrola to collaborate closely with VicGrid to define the early-stage elements of the project. This includes route planning, preliminary technical design, cost and financial assessment, regulatory approvals, and engagement with landholders, Traditional Owners, and local communities.
VNI West – Project Overview
The Victoria to New South Wales Interconnector West (VNI West) is a proposed 500 kV double-circuit transmission line spanning approximately 240 km from western Victoria, near Bulgana, to the Murray River border north of Kerang, where it will link to New South Wales’ network (see figure below).
Similarly to Central West Orana PPP in NSW, the VNI West is designed to support the development of new renewable energy generation and strengthen energy reliability across the National Electricity Market. The line will connect Victoria’s renewable energy zones with storage and generation in New South Wales, enabling excess electricity to be shared between the states. This will also allow Victorian renewable generators to sell more power to New South Wales when local demand is low.
The Victorian section runs from Bulgana to a proposed terminal station at Tragowel before connecting to the NSW section at the Murray River. Once operational, the interconnector is expected to:
Boost bidirectional transfer capacity, facilitating more efficient energy flow between Victoria and New South Wales.
Enable increased uptake of renewable energy by distributing surplus generation across the NEM.
Support grid reliability, particularly during peak demand periods or as coal-fired stations retire, while reducing curtailment risks.
What is a Development Partner? The Role of Iberdrola in VNI West
A development partner is typically engaged in the early phases of a project to provide integrated support, similarly to early contractor involvement and the integrated project delivery approaches. This approach allows the owner and the partner to collaboratively define technical, commercial, and regulatory aspects before moving into construction.
[advantages of the development partner approach]. For VNI West, Iberdrola Australia will work closely with VicGrid to develop the key early-stage elements, including:
Engineering and technical planning — developing preliminary designs and assessing route options.
Cost and financial structuring — building a business case and financial model, so that the project can eventually reach financial close.
Permitting and regulatory engagement — navigating environmental assessments and community consultations.
Landholder and stakeholder engagement — fostering relationships with landowners, Traditional Owners, and local communities.
If the development phase proves successful, Iberdrola may submit a proposal to build, own, and operate the transmission line.
Leadership Comments on the Iberdrola Appointment
Fernando Fernandez, CEO, Iberdrola Australia, said:
“We’re proud to partner with VicGrid to contribute to the success of VNI West. We’re committed to working collaboratively to meet the project’s objectives and timelines.
VNI West is a critical project for Australia’s energy future and our global and local expertise in renewable energy, networks and large-scale infrastructure positions us well to support its successful delivery. We look forward to building strong relationships with local communities and stakeholders throughout this project.
VicGrid’s Chief Executive Officer, Liam Wagner, added:
““The appointment of Iberdrola Australia as the development partner for VNI West provides confidence that this critical project will continue to progress with the right expertise and focus, maintaining grid reliability and delivering genuine benefits for regional communities.
As Victoria reforms how transmission infrastructure is developed, VicGrid looks forward to working closely with Iberdrola and local stakeholders to deliver VNI West responsibly and ensure landholder and community voices remain central to the process.”
