Australia's electricity grid capacity must triple by 2050, says AEMO draft plan
Australia's main electricity grid capacity is projected to triple by 2050, driven by a fivefold expansion in large-scale wind, solar, and storage, according to the Australian Energy Market Operator's (AEMO) draft integrated system plan.
The optimal infrastructure path outlined by AEMO would cost approximately $128 billion in today's dollars. The plan emphasizes that any delay in the transition or failure to meet the 2030 renewable targets would increase costs and jeopardize system reliability.
Transmission infrastructure expansion is estimated to require about 6,000 km of new lines and $9 billion in investment. This expansion is expected to save consumers around $22 billion and reduce emissions by roughly $2 billion compared with scenarios without new transmission.
Rooftop solar is already present on over 4 million Australian homes and businesses. To meet future demand, the number of small solar systems needs to quadruple by 2050.
New gas-fired power plants will replace ageing generators and increase gas capacity by 25%. However, these plants will operate infrequently—about 7% of their annual potential—primarily serving as backup during winter and at night.
Two-thirds of the existing coal-fired power capacity is anticipated to be decommissioned within the next decade. The remainder is expected to be retired by 2049, following a Queensland government decision to extend the life of its coal fleet.
Coal plants are also expected to operate with increased ramping and flexibility to complement the dominance of solar generation during the daytime, with support from storage, gas, and upgraded networks.
Electricity demand is being driven by data centers and the broader electrification of industries, homes, and transport. Renewables accounted for about 43% of electricity generation last year and reached 50% in the previous month.
AEMO CEO Daniel Westerman stated that renewables, firmed with storage and backed by gas alongside upgraded networks, remain the least-cost option. He warned that delivering the required infrastructure swiftly is challenging and that slower progress would increase costs and risks to reliability.
David McElrea of the Smart Energy Council echoed these concerns, noting that delays in the transition would raise costs for consumers.
