The problem not only exists in Victoria. There are cases in Queensland where the cost of connection to the main grid are prohibitive when compared to the operating revenue of the generator.
As the grids is a user pays system, the generators are responsible for the costs of connection to the low voltage distribution/high voltage transmission networks. If this was not the case, the community would pay a high price to have questionable generation in remote areas connected to the grid, putting substantial upward pressure on network charges for all.
The electricity network has suffered from market failure. The market tends to over-invest where it’s most profitable. In the past that’s led to so called “gold-plating” in places, while the network is inadequate in others. “The market” is not infallible.
Indeed. The cost is comparatively trivial.
These things do need planning though. Energy markets are in major transformation. A great deal of investment is needed in the transmission network. We need to plan nationally and decades ahead. The private sector rarely thinks broadly enough or far enough ahead (if ever).