Instead of jostling for land near VicGrid’s proposed substation at Truganina scheduled for 2033, the worthwhile place to look in Victoria is closer to the generation source and upstream of the substations in West Melbourne.
To date, Melbourne’s west is where the land has been bought and permits lodged with Department of Transport and Planning. It is however, not where the network is being reinforced this decade. The Truganina Terminal Station that the land banking is implicitly waiting on carries a 2033 date, a $410 million estimate, and — in VicGrid’s own words — a location still to be determined.
That five-year gap is the opportunity in Victoria and we believe it can be found upstream, closer to the generation.
What VicGrid actually funds west of Melbourne
The 2025 Victorian Transmission Plan’s Western Victoria Reinforcement program is the only set of works with a delivery date this decade.
Data centres have been investigating with great interest and buying land nearby the proposed Truganina Terminal Station and its interactions with the existing Deer Park Terminal Station and the substation built for the Melbourne Renewable Energy Hub in Plumpton, just up the road.
The projects in table 2 below are what everyone in the market is circling and the authority is sitting with VicGrid to coordinate and manage.
The marginal loss factor points a data centre further west
Everyone in the NEM buys and sells at one price per region – the regional reference node. In Victoria, that RRN is Thomastown 66 kV. AEMO calculates, for every connection point in the network, how much the next megawatt flowing between that point and the reference node changes total system losses. That number is the marginal loss factor.
An MLF below 1 at a connection point is usually AEMO saying there is already more generation than load.
If you are a generator at that node, there is likely a decrease in revenue. If you are a load at that same node, you are a solution. Every megawatt you consume there is a megawatt that no longer has to travel to Melbourne.
MLF measures marginal transmission losses between a connection point and the reference node. It does not measure thermal headroom, transformer capacity or fault level. It shows where the network is straining to push power east to Melbourne.
So for Deer Park in metropolitan Melbourne, energy has to be pushed to you and a data centre is paying a premium on every megawatt hour for locating at that existing substation.
For Geelong and Ballarat, it is receiving less expensive energy trying to push eastwards.
AEMO’s marginal loss factor for FY2026-27 at the following load connection points:
Deer Park 66 kV: 1.0097
Altona 66 kV: 1.0068
Brooklyn 220 kV: 1.0023
Keilor 66 kV: 1.0021
Thomastown 66 kV: 1.0000
Geelong 66 kV: 0.9963
Ballarat 66 kV: 0.9791
The loss factor does not prove you can connect. What it does is map where the network is straining to move power east, providing a signal for where a large, flat load such as a data centre would be useful and rather welcomed. It shows where to lodge the connection enquiry to get a clear answer on capacity.
By way of example, a 500 MW data centre should be looking at Geelong or Ballarat in the first instance, not near the Melbourne Airport.
What sits behind a further west location is very interesting. There is the Golden Plains Wind Farm, with more than 1,330 MW installed across two stages at Rokewood, there is a 150 MW / 600 MWh battery currently under construction, and stage 3 for 700-1000 MW with construction expected to start in late 2028 if approved. There is the Victorian Big Battery and the Central Highlands Renewable Energy Zone declared by ministerial order on 29 May 2026.
Applying FTB’s rule of thumb of three megawatts of new in-jurisdiction generation for every megawatt of load; a 500 MW campus in Victoria requires 1,500 MW. Victoria financially committed 391 MW across three projects in 2025. Golden Plains Stage 3 is the only single Victorian project capable of moving that number and it is inside the declared REZ.
For a 500 MW data centre looking to find capacity before substantial electricity network infrastructure is built, we would be going straight to Moorabool Terminal Station, Cressy Terminal Station and Golden Plains Terminal Station, or building your own substation near Geelong.
What this means for investors
Forget Deer Park and Truganina, that is a crowded trade. Look instead to Moorabool, Geelong, Ballarat. The MLF is an indicator so lodge a pre-feasibility connection enquiry with VicGrid to get the definitive capacity answer at these locations.
Yes you could engage with VicGrid and work to their timelines and agenda or you could create a bespoke project using what capacity remains before Western Renewables Link and VNI West are delivered – which will be years away, or if at all.
If you want to discuss this analysis or stress-test a site in Victoria, contact us on info@followthebottleneck.com
Not investment advice. This article uses public information only and its content is general in nature.