The Australian Energy Market Operator (AEMO) has released a comprehensive 25-year plan to transition the National Electricity Market (NEM) to net zero emissions by 2050.
The 2024 Integrated System Plan (ISP), developed over two years with extensive stakeholder consultation, outlines a $122 billion investment strategy to reshape Australia’s energy landscape.
AEMO CEO Daniel Westerman emphasised the urgency of the transition, noting that 90 per cent of Australia’s current coal-fired power capacity is projected to close by 2035, with complete closure expected before 2040.
The ISP presents a least-cost path to meet federal and state government emissions reduction policies while ensuring a reliable electricity supply.
Key highlights of the plan include:
- A target of 82 per cent renewable energy generation by 2030, up from the current 40 per cent
- Nearly 10,000 kilometres of new transmission lines are required by 2050, with 2,500 kilometres already underway
- A significant role for rooftop solar, home batteries, and electric vehicles in the energy transition
- Continued importance of gas as a backup power source during periods of low renewable generation
The ISP forecasts that the proposed transmission projects, costing $16 billion, will save consumers $18.5 billion in avoided energy costs and deliver emissions reductions valued at $3.3 billion.
Additionally, the plan is expected to support over 60,000 energy jobs in building and maintaining infrastructure over the next two decades.
Industry experts have welcomed the plan but stress the need for swift action. Andrew Bray, National Director of RE-Alliance, stated: “The longer we wait, the more we’ll pay through our power bills because we need inexpensive renewables to put downward pressure on power bills.”
Climate Councillor Greg Bourne emphasised the urgency, saying: “We have no time to waste. Getting more clean energy to more households and businesses is the only way to slash climate pollution while preventing price volatility in the years ahead.”
However, the ISP also highlights significant challenges, including approval process delays, investment uncertainties, cost pressures, social licence issues, supply chain disruptions, and workforce shortages.
AEMO recognises the importance of early community engagement and effective consultation on transmission projects.
As Australia moves towards its next federal election, the Climate Council is calling for increased investment and policies to boost rooftop solar, community storage, and grid infrastructure to fully realise the country’s potential as a renewable energy and clean export superpower.
The 2024 ISP serves as a critical roadmap for Australia’s energy transition, balancing the need for reliable, affordable electricity with ambitious climate goals.
As the plan unfolds, it will require coordinated efforts from government, industry, and communities to overcome challenges and seize the opportunities presented by this transformative shift in the nation’s energy landscape.
