ARENA provides AUS$15 million to enhance operational capacity of NEM in Australia

Facebook
Twitter
LinkedIn
Reddit
Email
The NEM connects the states of Victoria, South Australia, New South Wales and Queensland, alongside the Australian Capital Territory and Tasmania. Image: Queensland Department of Energy and Public Works.

The Australian Renewable Energy Agency (ARENA) has provided AUS$15 million (US$9.7 million) in funding to the Australian Electricity Market Operator (AEMO) to enhance the operational capacity of the National Electricity Market (NEM).

This funding will aid solar energy and other renewable energy generation technologies like hydro and wind. It will also support energy storage, often regarded as a vital cog in developing a renewable energy-based grid.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

ARENA confirmed that the funding will help accelerate operational readiness for major power system changes in the next two years – enabling reduced reliance on fossil-fuelled generators to support system stability.

This initiative will assist AEMO in developing essential resources for the energy transition. These resources will encompass governance frameworks, systems, and processes to facilitate consumers’ growing adoption of rooftop solar, batteries, and electric vehicles (EVs).

Additionally, it will offer investors better visibility into the power system’s evolving needs and the potential for various technologies to address these needs.

Investment welcome with coal-fired withdrawal on the horizon

The AEMO will welcome news of this new allocation. The organisation recently said that the NEM, which interconnects southern and eastern Australia, must invest around AUS$16 billion into its grid infrastructure to achieve net zero.

Transmission projects must be rolled out to facilitate new renewable energy, with AEMO predicting that around 10,000km will be needed.

AEMO CEO Daniel Westerman believes the funding will be crucial in bolstering the NEM via increasing its operational capacity, which could prove critical as coal-fired generation starts to be withdrawn from the country – AEMO predicts this will occur by 2038.

“This will in-turn help make efficient use of available renewable energy resources, alleviate future system security management challenges, and reduce future reliance on fossil-fuel generation. ARENA’s grant funding will accelerate this critical work, enabling the deployment of innovative and timely solutions to support our future power system.”

NEM sees renewable energy generation increase year-on-year

Increasing the operational capacity of the NEM also will be critical in ensuring that the growth witnessed in renewable energy generation, such as solar, maintains its strong performance in the electricity mix.

Indeed, coverage by PV Tech last week (24 July) showed that grid-scale solar generated an average of over 1.4GW in Q2 2024, a 132MW increase year-on-year (YoY). The commissioning of new facilities in New South Wales was a particular driver of this change.

AEMO’s report also outlined that 43GW of new capacity is progressing through the end-to-end connection process from application to commissioning, showcasing why grid infrastructure investment is required.

Earlier this week (30 July), it was revealed that projects seeking to connect to the NEM rose to 43GW in June 2024, representing a 43% year-on-year increase. With this figure expected to rise for the foreseeable future, ensuring these projects can connect will be critical to ensuring no delays are witnessed, particularly with impending 2030 decarbonisation targets.

Read Next

June 30, 2025
Australian module manufacturer Tindo Solar has secured a 30MW solar module supply agreement to power Australia's first "net zero pipeline”.
June 27, 2025
Indian solar manufacturer Premier Energies has commissioned its 1.2GW TOPCon solar cell manufacturing line at Fab City, Hyderabad, Telangana.
June 27, 2025
The UK government has decided it will not sign a Contract for Difference (CfD) with Xlinks for the 11.5GW Morroco-UK interconnector project.
June 27, 2025
Renewables investment platform Nexwell Power has signed a round of power purchase agreements (PPAs) with “one of the largest” US tech companies for solar PV capacity to be built in Spain.
June 26, 2025
A group of minority shareholders in Norwegian silicon firm REC Silicon has triggered an investigation into the circumstances surrounding the closure of the company’s US polysilicon production site.
June 26, 2025
Nextracker will supply solar tracker systems to a 550MW solar PV project in the Greek province of Western Macedonia, owned by Greek renewables developer PPC Renewables.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
June 30, 2025
10am PST / 6pm BST
Solar Media Events
July 1, 2025
London, UK
Solar Media Events
July 1, 2025
London, UK
Media Partners, Solar Media Events
July 2, 2025
Bangkok, Thailand
Media Partners, Solar Media Events
September 2, 2025
Mexico City, Mexico