“Batteries can store renewable energy and supply it when needed as well as improve the stability of energy supply,” said Infrastructure Victoria Chief Executive Dr Jonathan Spear.  “They also can save billions in additional energy infrastructure.”

The draft strategy names 50 infrastructure priorities for the state across energy, transport, health, social infrastructure and the environment.

It recommends the government create new support for Victorians to buy home batteries, expand the current neighbourhood batteries program to reduce strain on the energy grid and facilitate further investment in big batteries to help reduce transmission loads and provide backup power (draft recommendation 31).

Virtual power plants are smart networks of rooftop solar, batteries and devices which are centrally coordinated across different households.

“More support for home batteries, with incentives for people to connect their batteries to a ‘virtual’ power plant through their energy provider, would better coordinate more home batteries which benefits consumers and the energy system.”

“Virtual power plants can respond quickly to changes in supply and demand, making power supply more reliable. They can save billions in avoided upgrades to energy infrastructure and boost system resilience,” Dr Spear said.

Supporting home batteries and providing incentives to join virtual power plants to 2030 could cost between $20 million to $50 million, starting from 2026 when the current Solar Battery Loan program ends in June 2025.

“Only about one in 10 Victorians are installing a battery when they purchase rooftop solar, so there’s a big opportunity to make it a more attractive option for households and boost reliability when coordinated,” Dr Spear said.

New tariffs for customers to benefit from mid-sized batteries, also called neighbourhood batteries, should also be considered.

“Neighbourhood batteries can store excess energy from home solar systems locally, which reduces strain on the energy grid,” said Dr Spear. “They can also allow more rooftop solar and reduce emissions.”

The draft strategy recommends the government work with distribution network businesses, retailers, battery operators and communities to trial new battery tariffs. For example, Ausgrid is supporting energy storage as a service in New South Wales by using a new tariff. This will allow customers to benefit from neighbourhood batteries without any upfront costs (see draft strategy case study, p.106).

In addition, the longer-term storage offered by big batteries can better manage the risk of potential delays to transmission infrastructure. Current transmission projects face delays from community concerns and supply chain issues.

“While not removing the need for more transmissions capacity, big batteries can help reduce transmission loads and provide backup power,” he said. “The government should continue to facilitate investment in them, prioritising areas where transmission congestion is likely to remain a problem, such as north-west and central Victoria.”

The draft strategy estimates around $300 million to $500 million is needed to facilitate investment in big batteries by 2030.

Other recommendations related to the energy system include:

29. Coordinate faster delivery of key energy infrastructure.

30. Improve environmental assessments and site selection for energy projects.

32. Determine long duration energy storage needs.

33. Develop regional energy plans, guide transition from fossil gas and maintain reliable gas supply.

34. Speed up household energy efficiency and electrification.

“Our recommendations aim to help the government navigate the risks of the energy transition, meet emissions reduction targets and keep the energy system affordable, reliable and fair,” Dr Spear said.

Victorians are invited to have their say

Victoria’s 30-year infrastructure strategy provides a practical roadmap for the policies, reforms and projects that can deliver many benefits to Victoria’s communities, economy and the environment over the coming decades.

The draft 30-year strategy has been independently prepared by Infrastructure Victoria’s team of engineers, economists, land use planners, technical experts and social researchers using the latest available data and new modelling. The draft recommendations are based on evidence and engagement with more than 18,500 Victorians.

Infrastructure Victoria updates Victoria’s 30-year infrastructure strategy every 3 to 5 years. Community and stakeholder feedback, along with technical assessments and further evidence, also contribute to its development.

Following a review of stakeholder and community feedback, the completed strategy will be tabled in the Victorian Parliament to inform the policies of all parties. The Victorian Government is required to respond to the strategy’s recommendations.

Infrastructure Victoria is encouraging feedback from organisations and community members on the draft strategy’s recommendations.

“We want to know: have we missed any big infrastructure challenge or opportunity? Or is there other evidence you would like us to know that might change a recommendation for the final strategy?”

The draft strategy is open for feedback until Monday 28 April 2025.

Visit www.infrastructurevictoria.com.au to read the strategy and have your say.

Fast facts

More than 90% of Victoria’s greenhouse gas emissions come from burning fossil fuels to make energy. Electricity generation from coal makes up over half of that.

The Victorian Government aims to achieve net zero emissions by 2045 and meet renewable electricity generation targets of 65% by 2030 and 95% by 2035.

To meet the 2035 target, large scale renewables need to triple from nearly 6 gigawatts to around 18 gigawatts. This rises to about 25 gigawatts by 2045.

Coordinated consumer energy resources like home solar and batteries help avoid infrastructure investment, with some estimates suggesting it can save $10 billion of investment by 2040 nationally.

Expanding the neighbourhood batteries program, or a similar program, to 2030 will cost an estimated $25 million to $35 million.

The Victorian Government has also already committed $1 billion in funding to the State Electricity Commission to invest in areas where the market is uncertain, including for big batteries.