Australia revises renewable energy forecasts for wind and transmissions

The announcement came as the Australian Energy Market Operator (AEMO) released a draft of its highly anticipated 2026 Integrated System Plan (ISP), in which it radically scaled back previous forecasts for wind generation and transmission line capacity.

Previously AEMO forecast that wind generation capacity should reach 42.6GW by the end of the decade. This has now been revised down to 26GW by 2030, 40GW by 2035 and 57GW by 2050. AEMO attributed the changes partly to elevated building costs, citing that solar was “somewhat cheaper and easier to build than wind” and “pairs well with storage”. The draft paper also highlights that offshore wind projects are approximately 40% more expensive to build and connect than onshore wind farms.

By contrast, AEMO now expects that 2GW of grid-scale solar will be needed by 2030 and 63GW by 2050, suggesting that solar will make a greater contribution to Australia’s energy mix in the coming years than previously thought. Additionally, AEMO has indicated that battery energy storage system (BESS) capacity will be 60% greater than previously forecast by 2030, with grid-scale operational BESS capacity being revised up from 15GW in the previous 2024 ISP, to 24GW.

The draft plan also revises AEMO’s previous forecasts for expanded transmission capacity. It estimates that a further 6,000km of transmission lines will need to be added to the existing 44,000km network by 2050, down from the previous estimate of 10,000km. The downgraded forecast is partly due to 365km of transmission lines having already been built and a further 2,800 km already committed or anticipated for other projects, as well as several projects having been abandoned. Delays to certain transmission project buildouts, and the decline in battery costs, have consequently meant BESS will serve as a buffer for slower transmission development. This means BESS will continue to serve as a central pillar of the National Energy Market (NEM) by providing system security such as frequency control, voltage stability and additional system strength.

The paper offers a roadmap for decarbonising Australia's electricity system and underscores that “renewable energy firmed with storage, backed up by gas and connected by upgraded networks, presents the least-cost way to supply secure and reliable electricity to consumers, while meeting government policies.”

By 2025, it estimates that Australia will need a total of 120GW of combined grid-scale wind and solar, 32GW grid-scale batteries, 14GW of flexible gas and 12GW of pumped hydro to meet its energy needs. AEMO expects that electricity consumption required for industry, business and transport will nearly double to 389Twh by 2050, partly fuelled by rising demand from new energy-intensive industries such as data centres.

Although, like other nations, Australia has been retiring coal-fired plants in line with net zero goals, the draft plan indicates that the country will still rely on coal-fired generators “to main grid security and stability” until 2049.

Leanne Olden, an expert in energy law at Pinsent Masons, said the revised forecasts would be particularly relevant to businesses involved in wind farm development and transmission networks. “It is significant that AEMO is now slashing its forecast for the amount of wind, as well as transmission, that will be required as this was an expected major source of investment,” she said. “Clients will want to be aware that not as many projects will need to be built as was previously anticipated, or that different technologies may be preferred.”

“The draft ISP does however demonstrate Australia’s ongoing commitment to the transition to renewable energy, which should give comfort to those looking to invest in the country,” she added.

The AEMO has also launched a consultation seeking further industry feedback on its roadmap until 13 February 2026 ahead of publishing the final ISP in June next year.