Record clean energy build strengthens reliability outlook
A record pipeline of new generation and storage is putting Australia on a stronger path to maintain electricity reliability as ageing coal-fired power stations retire, according to latest National Electricity Market (NEM) Electricity Statement of Opportunities (ESOO) report, an annual 10-year reliability outlook published by the Australian Energy Market Operator (AEMO).
Previous ESOOs under the Coalition repeatedly forecast substantial reliability gaps as ageing coal generators retired. The 2026 ESOO shows the pipeline of generation and storage needed to maintain reliability has strengthened materially, backed by a strong rollout of new renewable generation, batteries, transmission and growing investment by households in rooftop solar and battery storage.
Around 40 GW of new generation and storage is now committed or anticipated, with a further 33 GW supported by government programs. For context, the entire NEM is 77 GW today. Around 9 GW of new capacity was added over the past year, a new yearly record, while 24 GW has moved into committed or anticipated status since last year’s ESOO.
Importantly, AEMO identifies no reliability gaps in 2027-28 or 2029-30, making clear continued investment and timely delivery will be needed as electricity demand grows and more ageing coal generation retires. AEMO says “ consumer and market investments are strengthening the pathway to maintain reliability ”, with the development pipeline having “strengthened materially” over the past year.
Minister for Climate Change and Energy Chris Bowen said the report showed Australia’s energy transformation was gathering pace. "This is what getting on with the energy transition looks like, with record amounts of new generation and storage being built and connected, strengthening reliability as ageing coal-fired power stations approach their scheduled retirement dates," Minister Bowen said.
"Our Capacity Investment Scheme, investment in long overdue transmission upgrades and rolling out over 500,000 Cheaper Home Batteries are just some of the things we’re doing to deliver the power Australia needs, keeping the lights on while putting downward pressure on energy costs. "There is more work to do and AEMO is clear we need to keep building, but this report shows the pipeline is strong and reliability is improving." The report also highlights the increasingly important contribution households are making to the grid through rooftop solar and batteries.
AEMO says household energy resources like home batteries are reducing demand on the grid and the amount of generation required in the evening. Electricity demand is forecast to grow over the coming decade as households and businesses electrify and new industries expand, including significant growth in data centres. AEMO forecasts data centre electricity consumption could grow from around 3 per cent of the National Energy Market today to almost 15 per cent over the next decade, reinforcing the need for large new energy users to provide the additional renewable generation and firming required to meet their demand with them.
We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture. We pay our respects to their Elders past, present and emerging.