Victorian Opposition Leader Jess Wilson has promised to scrap the controversial VNI West transmission project and accelerate new gas supply and firm generation if the Liberal-Nationals win November’s state election, setting up one of the clearest energy policy clashes between the Coalition and Labor in years.
The announcement marks a significant escalation from the Coalition’s previous position of pausing and reviewing VNI West. Ms Wilson is now committing to cancel the Victorian section of the multi-billion-dollar interstate transmission project altogether, arguing Victoria needs “more gas and more firm generation” rather than a massive expansion of new poles and wires through regional farmland.
“Victoria doesn’t need more unnecessary poles and wires that bulldoze through regional communities, it needs more gas and more firm generation and that is exactly what my team will deliver,” Ms Wilson said.
“A Liberal and Nationals Government will cancel VNI West and take immediate action to secure more gas for our state – meaning lower prices and a secure energy future.”
Under the Coalition’s plan, a Wilson government would open Victoria to additional conventional gas projects, unwind Labor’s restrictions on gas use in new buildings, establish an Energy Security Requirement designed to bring new firm generation into the market, repeal expanded land-acquisition and access powers affecting transmission corridors, and promote solar and batteries on commercial and industrial rooftops.
The policy represents a fundamentally different vision for Victoria’s post-coal electricity system.
Labor is seeking to replace ageing brown-coal generation predominantly through renewable energy, storage, interstate connections and new transmission, supported by some gas-fired generation when renewable output is low. The Coalition says that approach has become too expensive, too slow and too disruptive to regional communities, and wants gas-fired generation to play a much larger role in guaranteeing supply.
At the centre of the fight is VNI West, a proposed high-voltage interconnector linking Victoria and New South Wales.
The Victorian section would run approximately 240 kilometres from Bulgana, in western Victoria, through a new terminal station near Tragowel and towards the NSW border north of Kerang. VicGrid says the line would allow Victoria to access generation and storage in New South Wales while creating capacity for new renewable projects in Victoria’s north-west.
The project has become deeply controversial across parts of regional Victoria, where farmers and landholders have raised concerns about compulsory acquisition, access to private property, agricultural impacts, fire risks and the location of transmission infrastructure.
Those concerns have become a major political vulnerability for Labor in regional seats ahead of the November 28 election.
Nationals leader Danny O’Brien said regional communities had been treated with “appalling disrespect”.
“Labor has spent years bulldozing through the concerns of regional communities to force VNI West onto farmers,” Mr O’Brien said.
“An elected Liberal and Nationals Government will scrap VNI West, repeal Labor’s compulsory acquisition powers, and end the fines Labor has threatened and issued against farmers who just want the right to protect their own private property.”
The Coalition’s attack has been strengthened by the dramatic increase in VNI West’s estimated cost.
The figure used in AEMO planning for the project was around $3.6 billion, but updated estimates released in 2025 put the combined Victorian and NSW project at about $7.6 billion, with the uncertainty range extending as high as approximately $11.4 billion.
The Victorian component alone was subsequently estimated at approximately $3.87 billion, while the NSW section was estimated at about $3.7 billion.
The project has also slipped behind its earlier timetable.
Its expected completion date was shifted from 2028 to late 2030, with Transgrid currently listing November 2030 as the expected completion date.
That delay is politically important because EnergyAustralia’s Yallourn coal-fired power station is scheduled to close on 1 July 2028.
The 1,480-megawatt Yallourn plant remains one of Victoria’s major sources of dispatchable electricity, and its retirement will remove a substantial amount of coal-fired capacity from the system.
The Coalition argues it makes little sense to justify VNI West partly on the basis of helping replace retiring coal when the interconnector itself will not be completed until more than two years after Yallourn shuts.
Shadow Energy and Emissions Reduction Minister David Davis said Victoria could not afford to wait for delayed transmission projects.
“Victorians can’t afford to wait for delayed, over-budget transmission projects while Labor gambles with our energy security,” Mr Davis said.
“Our priority is making sure the lights stay on.”
The Coalition says its answer would be an Energy Security Requirement, under which the government would seek new firm electricity capacity through competitive processes similar to schemes used in other states.
While the Coalition says the process would be technology-neutral, Mr Davis has indicated gas-fired generation would probably provide a substantial share of the capacity.
Gas plants can start generation relatively quickly when electricity demand rises or renewable output falls, making them useful as firming capacity in systems with increasing wind and solar generation.
Importantly, Labor’s own electricity strategy also envisages a continuing role for gas.
The Victorian Government’s electricity plan says about 6.3GW of new short- and long-duration storage is expected by 2035, supported by “targeted gas-fired power generation” during periods of high demand or low wind and solar output.
The dispute is therefore less about whether gas will play any role and more about how large that role should be, where new gas will come from and how much transmission Victoria should build.
The Coalition has also vowed to “scrap Labor’s gas ban”.
That description refers principally to Victoria’s electrification rules rather than a blanket prohibition on existing Victorians using gas.
From January 2027, new homes and most new commercial buildings in Victoria are required to be all-electric, including commercial kitchens. Existing homes are not subject to an immediate blanket prohibition on continuing to use existing gas appliances.
Labor argues electrification reduces household energy costs and lowers pressure on Victoria’s declining conventional gas supplies.
The Government estimates an existing Victorian home switching to efficient electric appliances could save around $1,900 a year without solar and approximately $2,230 when paired with existing rooftop solar, although actual savings depend on household circumstances, appliance choices and energy use.
The Coalition says consumers should retain the choice to connect new homes and businesses to gas and wants to encourage additional conventional gas development.
That comes as AEMO continues to warn about tightening gas supply on Australia’s east coast.
Victoria’s own Gas Substitution Roadmap acknowledges gas production from existing fields is declining and says fossil gas supplies must remain reliable while the economy transitions. The Government has been examining offshore supply, storage, pipeline upgrades and gas import infrastructure as interim measures.
AEMO’s 2026 Victorian Gas Planning Report also factors in the looming closure of Yallourn, because losing coal-fired generation can increase the need for gas-powered electricity during periods of tight supply.
But the biggest dispute remains whether cancelling VNI West would reduce or increase electricity costs.
The Coalition says VNI West and other planned transmission infrastructure could add more than $600 a year to an average household’s electricity costs.
That figure is based on modelling cited by the Coalition from the Policy Institute of Australia and is not an official estimate from AEMO, VicGrid or the Essential Services Commission.
Labor and energy planners argue the opposite: that while consumers ultimately pay much of the cost of new transmission infrastructure, those networks enable cheaper generation to enter the electricity market and reduce wholesale costs over time.
VicGrid’s 2025 Victorian Transmission Plan estimated the broader transmission development pathway would have a net economic cost of about $6.6 billion, or approximately $4.2 billion in present-value terms after adjustments, but argued the investments would allow cheaper renewable generation to enter the market and strengthen security as coal plants retire.
The Victorian Government has said failing to implement its transmission plan would prevent new generation connecting to the grid, increase energy prices, weaken energy security and cost the Victorian economy an estimated $9.6 billion over 30 years.
AEMO has also continued to back VNI West despite the project’s higher cost.
Its 2026 Integrated System Plan, released in June, retained VNI West in the optimal development pathway for the National Electricity Market.
AEMO’s cost-benefit modelling tested what would happen if VNI West ceased to be treated as an actionable project and found delaying it beyond its actionable window increased the risk of inefficient investment across all three major scenarios.
The Clean Energy Council has responded sharply to the Coalition’s latest move, warning that abandoning VNI West would leave Victoria with a weaker electricity system at precisely the time ageing coal generation is disappearing.
The council said VNI West and the Western Renewables Link were needed to bring new large-scale generation into the market and warned rooftop solar alone could not replace the 1,480MW of dispatchable capacity being lost when Yallourn closes.
“Victoria needs more electricity, not less of it,” the Clean Energy Council said.
It argued that new large-scale renewable generation required transmission infrastructure to move electricity from where it was generated to major population and industrial centres.
The Coalition rejects the suggestion that cancelling VNI West means abandoning renewable energy.
Alongside additional gas generation, it wants to establish urban solar parks, encouraging businesses and industrial facilities to install solar panels and batteries on large metropolitan rooftops.
The Opposition also says it is prepared to examine alternatives that make greater use of existing transmission corridors rather than building entirely new easements across farmland.
VNI West’s cancellation would have consequences beyond Victoria.
The project is designed as a single interstate connection, so a Victorian decision to abandon its section would undermine the case for Transgrid proceeding with the roughly 235-kilometre NSW component.
It could also affect renewable projects being planned on the assumption that VNI West will provide sufficient grid capacity to connect them.
The Coalition has stopped short of giving the Western Renewables Link the same definitive death sentence.
Mr Davis has said the project would be assessed against value for money and its role within a broader review of Victoria’s transmission strategy, while VNI West would be cancelled outright.
That distinction marks a further evolution of Coalition policy.
In May, the Liberals and Nationals promised to pause and review both VNI West and the Western Renewables Link if elected. Three months later, the Opposition has hardened its position on VNI West from review to cancellation.
The shift puts energy infrastructure, gas policy and regional property rights firmly at the centre of Victoria’s election campaign.
Labor is effectively asking Victorians to accept substantial new transmission construction as the price of replacing ageing coal-fired generation with renewable energy and storage.
The Coalition is offering a different bet: less new long-distance transmission, more conventional gas, more firm generation, greater use of existing infrastructure and more solar and battery capacity closer to where electricity is consumed.
Ms Wilson says that approach would protect both household energy security and farmers whose properties sit in the path of new transmission.
“Regional communities need to know that I have their back, that my Liberal and Nationals team have their back and that we reject Labor’s plans to decimate agriculture and private property rights in this state,” she said.
The competing claims about bills will now face intense scrutiny.
The Coalition must demonstrate that enough new gas generation and alternative transmission capacity could be delivered quickly and cheaply enough to replace Yallourn and meet Victoria’s growing electricity demand.
Labor, meanwhile, must convince voters that a transmission project now costing billions more than earlier forecasts and arriving two years later than once planned still represents value for money.
With Yallourn’s 2028 closure approaching and VNI West not expected before late 2030, Victoria’s energy debate is no longer simply about renewable versus fossil fuel generation.
It is increasingly about which combination of gas, renewables, storage and transmission can keep the lights on at the lowest cost — and how much regional Victoria should be asked to sacrifice to build it.
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