The Australian Energy Market Operator’s 2025 Electricity Statement of Opportunities report shows improved reliability outlooks for the National Electricity Market (NEM), hinging on all expected investments being delivered on time and in full.
The Electricity Statement of Opportunities is a 10-year outlook on the investments needed to maintain reliability in the National Electricity Market (NEM).
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This year’s report assesses reliability against two development outlooks:
- A Government Schemes and Actionable Developments reliability assessment, which reflects more than 50 gigawatts (GW) of new generation and storage capacity, including the Capacity Investment Scheme as agreed through Renewable Energy Transformation Agreements with the states, and state-based schemes, and actionable transmission developments; and
- 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 CEO Daniel Westerman said 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,” Westerman 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,” he said.
AEMO’s latest forecasts show a 21% increase in operational electricity consumption (demand met by grid-scale generation) from 178TWh in 2024-25 to around 229TWh by 2034-35. 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.
Last financial year saw a record 4.4GW of new generation and storage commissioned. Over the next five years, additional investment between 5.2GW to 10.1GW is expected to come online annually, often supported by government schemes.
This new capacity will help offset the notified retirement of 11GW of predominantly coal power stations over the next 10 years, including Eraring, Bayswater and Vales Point (NSW), Yallourn (VIC) and Callide B (QLD).
Under the broader Government Schemes and Actionable Developments assessment, a minor reliability gap is identified in South Australia in 2026-27 (25MW) when Torrens Island B is advised to retire and Project EnergyConnect (Stage 2) is not yet fully commissioned.
Considering only the Committed and Anticipated Developments assessment, a small reliability gap (80MW) is forecast in Queensland in 2025-26 due to reduced generator availability, higher forecasts of maximum demand and delayed project commissioning. A reliability gap is forecast in South Australia in 2026-27 (390MW) when the Torrens Island B Power Station (800MW) is advised to retire.
This modelling did not consider AGL’s recent in-principle agreement with the South Australian Government to potentially extend Torrens Island B for two years. Should such an extension become formalised, no reliability gap would be forecast in these years.
Following the initial years of the 10-year outlook, reliability gaps are forecast in all mainland NEM regions, which have the potential to be managed as further projects progress towards meeting AEMO’s commitment criteria.
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Due to the reliability gap identified in South Australia, AEMO will request the Australian Energy Regulator to consider an obligation on retailers and liable entities to enter sufficient contracts through the retailer reliability obligation (RRO) for South Australia in 2026-27.
As part of AEMO’s summer preparations, it has a panel of providers to procure additional reserves when reliability is at risk across the NEM.
Read the full 2025 Electricity Statement of Opportunities report here.
