The Energy Shift Every Business Must Understand
Victoria is undergoing one of its most transformative business energy shifts in decades. The newly announced $4.3 billion Victorian Transmission Plan, led by VicGrid, outlines the next 15 years of infrastructure investment.
While this policy primarily targets renewable integration and grid stability, it will also directly influence business energy prices, procurement strategies, and long-term electricity contracts across the state.
As businesses consider their forward contracts, sustainability goals, and operational costs, they must view this development not as a background issue—but as a critical one.
“We’re entering a new energy landscape in Victoria, and businesses must adapt procurement strategies to stay cost-effective,” says Nick Halaris, Managing Director of Power Maintenance.
Why Is Victoria Investing over $4 Billion in Powerlines?
The $4.3 billion investment is part of Victoria’s broader ambition to reach 95% renewable energy generation by 2035. Coal-fired stations like Loy Yang A are nearing retirement, and solar and wind energy now dominate new capacity additions. However, existing transmission infrastructure was never designed for the decentralised nature of renewables.
The grid must now stretch to reach where energy is being produced—in areas like Western Victoria, Gippsland, and the Mallee. These zones, designated as Renewable Energy Zones (REZs), require significant transmission upgrades to connect new wind and solar farms to the major demand centres in Melbourne, Geelong, and key regional cities.
According to VicGrid, the plan involves:
- Building 380 km of new high-voltage lines
- Upgrading 430 km of existing infrastructure
- Improving interconnectors to other states
The goal is twofold: increase energy reliability and unlock investment in renewable projects. More than 17 GW of new generation capacity is expected to be unlocked through this plan.
But there’s also an economic angle. The Infrastructure Victoria 2024 update estimates that transmission constraints are already costing the state over $400 million annually in lost generation efficiency.
Source: Infrastructure Victoria
This investment is not just about green targets – it’s about fixing inefficiencies that hurt both suppliers and consumers.
“This is not just environmental policy. It’s economic reform for the energy sector,” says Nick Halaris. “It enables pricing that reflects true supply and demand conditions.”
Impact on Business Energy Prices: The Short and Long View
In the immediate future, businesses should expect a moderate increase in network charges as transmission construction begins. The Energy Users Association of Australia (EUAA) has already raised concerns that final costs could exceed $8.6 billion, nearly doubling the initial estimate.
These costs are typically recouped through regulated tariffs, with large commercial users bearing a significant portion. However, the long-term implications point to greater market stability and lower wholesale prices.
Here’s how the timeline breaks down:
Short Term (2025–2028):
- Rising network charges as projects commence
- Intermittent price volatility due to construction-related constraints
- Temporary disruptions during system upgrades
Medium Term (2028–2032):
- Greater supply diversification
- Reduced curtailment of renewable generation
- Falling wholesale prices during daytime and windy conditions
Long Term (2032+):
- Better price consistency across seasons
- Enhanced competition between renewable providers
- Lower emissions intensity per kWh
The Clean Energy Council projects that with proper infrastructure, renewable penetration could reduce wholesale costs by 20–30% over a decade.
“Businesses aren’t just buying energy—they’re buying exposure to market dynamics. Understanding how transmission changes influence price curves is key to smart procurement,” says Nick Halaris.
To capitalise on these shifts, businesses need to align procurement with infrastructure rollout timelines. Brokers are already advising clients on contract timing, portfolio blending, and regional procurement strategies to ride the upcoming pricing changes.
Transmission and Procurement: What You Need to Know
When transmission improves, so does access to cheaper generation. However, that benefit doesn’t appear automatically in retail pricing.
Businesses need to negotiate contracts that reflect this change. One-size-fits-all fixed-rate plans will no longer deliver maximum value.
Electricity brokers can help tailor procurement strategies that balance:
- Time-of-use exposure
- Renewable load sharing
- Portfolio contracting
- Participation in demand flexibility programs
Companies in affected REZs or regions with major transmission upgrades should request revised tariff structures from their retailers.
Those not reviewing contracts this year risk paying inflated rates that don’t reflect improved supply-side dynamics.
Renewable Energy Zones: What Businesses Should Expect
Each REZ will eventually support different generation types, depending on local geography and infrastructure.
Gippsland and Western Victoria are expected to lead wind development. Mallee and Ovens Murray will likely see a solar boom.
These regions offer new opportunities for direct sourcing, such as:
- On-site PPAs with nearby wind or solar farms
- Participation in aggregation deals
- Carbon offset purchasing at lower cost
Electricity brokers specialising in Victoria are already working with developers and aggregators to build out custom energy plans.
“We’re seeing a rise in regional energy contracting. Businesses close to REZs can save 15–20% annually if procured smartly,” says Nick Halaris.
Power Maintenance Victoria: Opportunities & Caution with Business Energy
Infrastructure upgrades mean planned outages and increased complexity in grid operations. Power maintenance planning must evolve accordingly.
Businesses, particularly manufacturers and data centres, should:
- Ensure they are registered for planned outage notifications
- Work with brokers to embed redundancy costs in their contracts
- Evaluate backup generation and battery storage options
The Australian Energy Market Operator (AEMO) has flagged that maintenance schedules will intensify during the rollout phase.
Source: AEMO Energy Dynamics Q1 2025
Being unprepared could mean exposure to downtime, financial penalties, or contract breaches.
Government Incentives for Businesses in 2025
The Victorian and federal governments are backing this grid investment with business incentives.
Programs include:
- Energy Efficiency Grants (Round 3) for equipment upgrades
- Clean Energy Finance Corporation (CEFC) loans for battery storage
- Rebates for demand management technologies
Source: Department of Climate Change, Energy, the Environment and Water
These can offset the cost of adapting to the new grid reality. Businesses should act before demand for funding exceeds supply.
Role of Electricity Brokers in Victoria’s Business Energy Future
Electricity brokers are no longer just comparison agents. In Victoria, they are becoming strategic partners in energy forecasting and resilience planning.
In 2025, businesses expect brokers to:
- Model scenarios for transmission-linked cost changes
- Liaise with government agencies about grant eligibility
- Conduct risk assessments for peak demand and outage periods
- Support net zero roadmap planning
Many brokers now use AI-driven procurement tools that consider live transmission constraints and market fluctuations.
Partnering with experienced brokers gives businesses a competitive edge, especially in fast-changing markets like Victoria.
Navigating Uncertainty With Strategy
Victoria’s energy infrastructure is transforming—and with it, the rules of business energy procurement.
Businesses that adapt early, rethink procurement, and lean on electricity brokers will benefit from:
- Long-term cost stability
- Cleaner supply chains
- Government support
- Greater grid resilience
Those who delay will be caught unprepared in a more complex and expensive marketplace.
This isn’t a distant future. It’s happening now.
Need advice on your business energy? Chat with PowerMaintenance and we’ll assist in a business energy strategy that works for you!
