Victoria is resilient to climate change and other future risks
Victoria can minimise the impact of adverse future events. Victoria’s greatest future risk is the impact of climate change, but it also faces risks of economic, technological, geopolitical, health or other environmental disasters and crises.
Victoria can prepare now for an uncertain future
Victorians want their communities and environments to be resilient. They recognise that climate change will affect their future. Stakeholders and community members told us they strongly support action on climate change.Many called for urgent measures to reduce greenhouse gas emissions and to adapt infrastructure for the new climate.They want infrastructure that protects people and nature from the impacts of climate change.
Victoria will change over the next 30 years. By 2055, extreme weather events will occur more often. The state will face more intense rainfall, more hot days, and higher sea levels. This will threaten Victoria’s infrastructure. Reducing greenhouse gas emissions and transitioning to renewable energy will help minimise the harms of climate change. But Victoria faces many risks in this transition.
Extreme weather events, crises and disasters disrupt daily life. They can destroy homes and challenge businesses. A single event can happen in a matter of hours but change communities forever. Victorians have experienced these disruptions already, from pandemics to bushfires, droughts and floods. Other risks could also affect Victoria, including economic volatility, ageing technologies, geopolitical instability, health crises and environmental disasters.
Victorians’ future health, safety and prosperity will be shaped by how governments and communities anticipate, mitigate and adapt to the impact of adverse events.
Victorians rely on services provided by essential infrastructure. This includes water, transport, healthcare, energy and communications.Disruptions to infrastructure can have serious consequences for communities, businesses and governments.
Climate change presents profound and far-reaching challenges for Victoria. It threatens infrastructure, including buildings, roads and power lines. Roads can be washed away during storm surges, flooded, or damaged by coastal erosion. This can cut communities off during disasters. Most of Victoria’s infrastructure was not designed for the changing climate. For example, rising sea levels will threaten coastal infrastructure. If governments take no action, Victoria’s infrastructure will fail more often, affecting communities and industries in every region.
Climate change can harm people and businesses. Households and businesses will face higher insurance costs as homes and commercial buildings will need more maintenance and repair.Some Victorians will be unable to afford these increases.Farms will also produce less and make fewer profits if they do not adapt.Wheat crop yields could fall by 14% in Victoria.
Victorians are already paying for climate impacts. Between 2007 and 2016, recovery from extreme weather events cost Victoria an average of $2.7 billion a year.Heatwaves alone cost the Victorian economy $87 million each year.This could grow to $179 million by 2030.
One study estimated that climate change damage could reach $150 billion by 2050. This includes costs from lower productivity, sea level rise and infrastructure damage. It does not include the impact of pollution, bushfires, floods and biodiversity loss. Some of these costs are unavoidable, but governments can avoid many future costs by acting now to reduce emissions and prepare for climate change.
As natural hazards become more frequent and intense, adapting and investing in more resilient infrastructure becomes more urgent.In the past, governments waited until infrastructure failed and then spent large amounts of money to fix it.This has high economic, social and environmental costs.Investing in infrastructure that can better withstand climate effects is often more cost-effective than repairing and rebuilding it after it fails.
Transitioning to renewable energy is critical to lowering emissions
Minimising the harms of climate change means acting to lower greenhouse gas emissions. Using fossil fuels such as oil, coal and gas is the main source of Victoria’s emissions.About half of energy sector emissions come from generating electricity (see Figure 18).
Transitioning away from fossil fuels is critical for reducing greenhouse gas emissions. But it is also a major challenge for Victoria and requires more rapid progress. The recommendations in this strategy do not cover all aspects of Victoria’s energy transition. There is significant work underway in Victoria and nationally. Our recommendations focus on the most urgent matters where more action is needed by the Victorian Government.
Figure 18: Victorian emissions by sector and energy subsector, 2022
Source: Infrastructure Victoria, adapted from Department of Energy, Environment and Climate Action, Victorian greenhouse gas emissions report 2022, State of Victoria, 2024, p 8, accessed 24 June 2025.
Victoria will need more renewable energy infrastructure to meet its target of net zero emissions by 2045. Victoria’s coal-fired power stations are also ageing and becoming less reliable. A balanced mix of renewable energy generation and storage can largely replace them as they are retired. The Victorian Government has set targets to generate 65% of electricity from renewables by 2030, increasing to 95% by 2035.It has also set storage and offshore wind targets.This can help make Victoria’s electricity system affordable, reliable and sustainable.
Shifting to renewable energy means upgrading and building new infrastructure. Some existing infrastructure, such as coal-fired power stations, will no longer be used. Gas network infrastructure will also need to change as Victoria moves away from fossil gas in some sectors while still meeting the needs of industry and energy system security.
Governments and the private sector are investing in new renewable electricity generation and storage, including offshore wind, to provide the energy Victoria needs.VicGrid is planning for transmission infrastructure to develop renewable energy zones, helping to connect new large-scale renewable electricity projects.In future decades, energy technologies which are emerging but not yet viable may also contribute to the transition.
The electricity sector's transition to renewables opens opportunities for the gas and transport sectors to decarbonise, as more Victorians switch to electric vehicles and energy-efficient electric appliances.As more homes, businesses and vehicles electrify, Victoria’s electricity use will increase by about 50% by 2036.
Building new infrastructure also creates more emissions, which makes the impacts of climate change worse. We recommend that Victoria reduces emissions from infrastructure in recommendation 25.
There are many risks to Victoria’s energy transition
Victoria’s emissions and energy targets help global efforts to reduce future climate change impacts. They are also important in guiding the pace of change towards a net zero emissions economy. But there are significant risks to meeting them. These include slow investment by private capital into large renewable energy projects and delays in major transmission and offshore wind projects.This could mean Victoria relies on ageing and unreliable coal-fired power stations for longer.Slow progress in electrifying homes, businesses and vehicles is also a risk. Victoria needs to act faster to meet its emissions and energy targets.
Many of these risks come from community concerns, technology limitations, supply chain issues and economic uncertainty. For example, some communities are worried about the impacts of energy projects on ecosystems and farmland. This can delay the delivery of major energy projects like transmission lines (see below section - Community engagement can build understanding and acceptance for energy projects).
The government may need to manage potential energy shortfalls. It released the Gas security statement to help manage gas supply. Long periods of cloud cover or low wind could lead to electricity shortfalls in the future. More people switching to electric vehicles and installing rooftop solar is leading to more variable demand for electricity. Victoria’s ageing coal-fired power stations will also become less reliable.Without the right policy and investments, communities face a higher risk of blackouts and power outages.Electricity prices might also rise.
An orderly transition to a lower emissions energy system is in the long-term interests of Victorians. Managing risks to Victoria’s energy transition requires ongoing coordinated policy and investments. The Victorian Government will need to work with Australian, state and local governments, energy market bodies and the private sector to bring about major change.
Households can also help with Victoria’s renewable energy transition by using less electricity during peak times to take pressure off the electricity network. Improving energy efficiency means Victorians will use less electricity to heat or cool their homes. It also makes homes more comfortable. Adding solar panels and batteries means that households can generate and store electricity as well.
Community engagement can build understanding and acceptance for energy projects
Developing energy projects like transmission lines, large-scale wind, solar and batteries requires engagement with local communities, farmers and Traditional Owners.
Many communities are unhappy with the way energy project developers engage with them.This includes concerns that there is a lack of timely and relevant information and fair compensation for land use. Community engagement is often perceived as too one-sided, technical and rushed.
Poor community engagement can lead to a distrust of developers and concerns about environmental impacts.It can increase opposition to energy projects and lead to costly delays.
Local communities need to be engaged early in the development of projects to ensure that they understand their role in the energy transition.They need enough resources, time and capacity to meaningfully engage at each stage of the development process.Community involvement in designing information resources and communication channels can help build trust.
Victoria’s energy transition will see renewable energy generation distributed across the state.A coordinated and consistent approach to consultation on energy projects will give communities confidence in the process. This means being open and honest with communities and landholders from the beginning. It also means involving the same people throughout the project to build trust and rapport over time.
Community benefit sharing schemes can help manage the cumulative impacts of energy infrastructure development on local communities.They can also build economic partnerships and retain workforce skills with local communities.
Guidelines are available to steer meaningful and inclusive community engagement. These include the Victorian Government’s draft Community engagement and social value guidelines for renewable energy and transmission projects, the National guidelines for community engagement and benefits for electricity transmission projects or the Clean Energy Council’s Best practice charter for renewable energy projects.The Australian Energy Infrastructure Commissioner provides best practice examples of community engagement.The First Nations clean energy strategy 2024–2030 provides practical steps to engage with Traditional Owners in the energy transition.
Explore the other strategy objectives
Victoria has a high productivity and circular economy
