AEMO's Reliability Outlook Improves on Record Pipeline, But Australia's Investment Gap Leaves Grid Exposed
A 70 GW project pipeline lifted AEMO's 10-year reliability outlook, but utility-scale investment fell 50% in 2025 and coal outages continue to pressure NEM spot prices.
Australia's electricity grid operator improved its 10-year reliability outlook on Monday (2026-08-24), when AEMO published its annual Electricity Statement of Opportunities citing a record pipeline of new generation and storage capacity as the main support for NEM reliability as ageing coal stations wind down.5
That pipeline has expanded sharply. Accredited, committed and probable clean energy projects now total nearly 70 GW across the NEM, according to Bloomberg data compiled from Australian government sources. Among probable projects alone, the pool jumped about 30% to 32.3 GW, the biggest single surge on record, after the federal government awarded tenders for close to 10 GW of new renewable capacity. Capacity Investment Scheme Tender 7 contributed 7.8 GW of renewable generation and 7.9 GWh of battery storage across 19 projects, Bloomberg reported on Thursday (2026-06-18).3
Pipeline size and financial close are different things. Utility-scale commitments fell 46% in 2025, with only 2.3 GW of new renewable generation reaching financial close across the full year. Tony Wood, senior fellow in energy and climate change at the Grattan Institute, said that figure is roughly half the annual build rate needed to meet federal government targets. Onshore wind took the sharpest hit: commitments there dropped 57% in 2025. The Clean Energy Council's 2026 annual report put total new generation investment at A$4.4 billion for 2025, down 50% year-on-year.2,3
Operational output has outrun investment flows in the near term. Renewables generated 43% of Australia's electricity in 2025 and pushed to 46.5% of NEM generation in the first quarter of 2026, the highest Q1 share on record, driven by increased wind and solar output, with batteries playing a larger balancing role across the quarter.2,3
That operational performance rests on a thermal fleet that has already shown serious unreliability. Ninety unscheduled coal outages across summer 2025-26 (December 2025 through February 2026) left roughly 25% of coal capacity offline at any given time across Queensland, New South Wales and Victoria, according to the Clean Energy Council. South Australia's day-ahead power spot price stood at A$230.81 per MWh on Wednesday (2026-08-26).2
Demand is also climbing. Under AEMO's Step Change scenario, data centre electricity consumption triples by 2030 to account for 6% of NEM electricity. Australia's total power market consumed 285.7 TWh in 2025 and is projected to reach 385.5 TWh by 2034, a compound annual growth rate of 2.98% across that period.2,1
AEMO's 2026 Integrated System Plan, published in June, set the longer-term scale: roughly 120 GW of utility-scale wind and solar by 2050, approximately five times the current installed level of around 23 GW. The operator described that as the least-cost pathway for NEM decarbonisation.4
Behind the meter, households have stepped in where institutional capital has not. Private households spent close to A$10 billion over 11 months deploying more than 400,000 home battery systems, putting Australia in third place globally for utility-scale battery market size, according to the Clean Energy Council. That distributed investment provides system flexibility but does not replace the large dispatchable capacity the grid needs as coal exits.2
For NEM traders, the number worth tracking is how many of the 32.3 GW in probable projects convert to financial close during the next CIS tender round, before the Australian summer starting December 2026 tests what an ageing and under-resourced coal fleet can actually deliver.2,5