Australia’s electricity market reliability improves

In addition to the investment requirements to ensure supply can meet demand in all periods of the year, the report models reliability impacts from planned generation outages, gas shortfalls and drought conditions.

The Australian Energy Market Operator (AEMO) released a report outlining the 10-year outlook on investments needed to maintain national electricity market reliability.

Reflecting the positive investment momentum to meet growing demand and replace retiring energy generation, the 2025 Electricity Statement of Opportunities report shows improved reliability outlooks, reliant on all expected investments being delivered on time and in full.

The report assesses reliability against two development outlooks:

  • A government schemes and actionable developments reliability assessment, which reflects more than 50GW of new generation and storage capacity, including the capacity investment scheme as agreed through renewable energy transformation agreements with the states, state-based schemes and actionable transmission developments
  • A committed and anticipated developments reliability assessment that includes only those generation, storage and transmission projects that are sufficiently advanced to meet AEMO’s committed or anticipated criteria

AEMO’s latest forecasts show a 28% increase in operational electricity consumption, demand met by grid-scale generation, from 178TWh in 2024-25 to about 229TWh by FY35. This forecast growth is predominantly driven by the rapid expansion of data centres, accelerating business electrification and the broader inclusion of prospective industrial energy users.

FY25 saw a record 4.4GW of new generation and storage commissioned and, over the next five years, additional investment between 5.2GW to 10.1GW is expected to come online each year.

This upgraded capacity will help offset the notified retirement of 11GW of predominantly coal power stations over the next 10 years.

AEMO chief executive Daniel Westerman says that delivery of projects in the investment pipeline — generation, storage, transmission and enablement of consumer energy resources — are likely to meet reliability standards for the coming decade.

“The 10-year investment pipeline to manage energy reliability is healthy,” he said.

“Considering the large volume of generation retirements over the next decade, the timely delivery of new generation, storage and transmission, along with the operation of consumer energy resources to support reliability, remain critical.”

AEMO acknowledges system security challenges, critical to successful power system operation, and will publish its annual report identifying investments required to maintain power system security later this year.

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