A controversial transmission line project is a step closer after a minister signed off on an order to progress its development.
Energy and Resources Minister Lily D'Ambrosio on Saturday confirmed she signed an order to progress the Australian Energy Market Operator's preferred route for the Victoria-to-New South Wales Interconnector West (VNI West).
The operator is working to finalise the route, which would connect the VNI West to the planned Western Renewables Link at a terminal station at Bulgana in Victoria's west, then link up with a station near Kerang in north central Victoria before it crosses the Murray River north of Kerang, the government said.
The market operator would continue talks with the community as it refined the route, with a focus on minimising impacts on landholders, the environment and farming, Ms D'Ambrosio said.
"Progressing critical transmission projects like VNI West is necessary to deliver cheaper, more reliable renewable energy to Victorian homes and businesses," the minister said in a statement.
"There can be no energy transition without new transmission infrastructure - as Victoria moves towards 95 per cent renewables by 2035, we have a duty to modernise our electricity network."
Farmers have rallied against the project, which would result in hundreds of kilometres of powerlines over their properties.
They are concerned about disruptions during construction and ongoing risks for machinery and bushfires once the lines, which will reach up to 85 metres high, are built.
State government plans to pay farmers $8000 a year for 25 years for transmission easements on their land received a lukewarm reaction in February.
Farmers will also be entitled to compensation for any loss in land value, and landholders set to host transmission lines will be allocated a land liaison officer once the operator settles on the VNI West's route.
The project will still need relevant planning and environmental approvals, meaning more opportunities for the community and traditional owners to have their say, the government noted.
The VNI West will connect the Victorian and NSW grids in a bid to shore up reliable electricity during periods of high demand, the government said.