
The Australian Energy Market Operator (AEMO) states that a record 9.1GW of new renewable energy and storage capacity connected to the National Electricity Market (NEM) in FY26, but its annual report makes clear that reliability depends on the investment pipeline delivering on time.
AEMO is the independent system and market operator for Australia’s electricity and gas systems, running real-time operations for the National Electricity Market (NEM), the Wholesale Electricity Market (WEM) in Western Australia and Victoria’s Declared Transmission System, while also providing the forecasting, planning and advice that guides investment decisions across the sector.
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As detailed in its FY26 report, 9.1 GW of new generation and storage capacity reached full output in the NEM during FY26, more than double the volume achieved in FY25.
Registration and application approvals reached 7.4GW and 14.2GW, respectively, while the broader connections pipeline grew 42% over the year, from 53GW to 75.4GW.
Capacity in the application stage more than doubled, and the developer-led implementation stage, which sits outside AEMO’s role in the connections process, grew by 30%.
Efficiency gains accompanied that volume. The average duration for an AEMO application review improved by 9% to 8.6 months, while commissioning reforms delivered a 10% reduction in commissioning time, to 4.5 months.
The report notes the WEM saw its own record volume of connections, with 835MW of new capacity commissioned during the year, including three new grid-scale battery storage projects, and 1.4GW of installed grid-scale battery capacity across the market.
Across the NEM, renewable energy generation, including rooftop solar, accounted for 46% of total generation over the year, exceeding 50% in Q2 of FY26 and setting a new instantaneous renewable energy contribution record of almost 80% for a half-hour period on 11 October 2025.
In the WEM, renewable energy generation accounted for 40.8% of total generation and reached an instantaneous record of 91% on 20 December 2025.
The report states that the expanding capacity of battery storage, both grid-scale and residential, is shifting excess renewable energy generated during the day into evening peak periods, reducing reliance on coal and gas-fired generation while providing essential system services.
Gas-fired generation on the east coast reached historically low levels during the first half of 2026, with the growing role of batteries in meeting evening peak demand cited as a key factor behind lower wholesale electricity prices and reduced price volatility.
AEMO’s FY26 capital investment programme, its largest to date at AU$216.6 million (US$151 million), directed AU$84.4 million toward reform initiatives to implement complex rule and policy changes, with the balance spent on modernising operational and business systems across the NEM, WEM and gas markets.
Through its subsidiary AusEnergy Services Limited (ASL), which delivers government-backed procurement schemes including the federal Capacity Investment Scheme (CIS), AEMO had by 30 June completed 17 tenders across three government schemes, supporting 142 projects representing around 25GW of generation and 100GWh of storage, with a further four tenders underway.
Within FY26 specifically, ASL completed seven CIS tender rounds across the NEM and WEM, five for renewable energy generation and two for dispatchable capacity, implementing a streamlined single-stage tender process intended to accelerate outcomes.
AEMO’s 2026 Electricity Statement of Opportunities, published separately in August, found a clearer pathway to maintaining reliable supply over the coming decade, while warning that continued investment in system security services would be needed as inverter-based resources grow.
AEMO chief executive Daniel Westerman said at the time that “beyond 2030, the next wave of investment will be critical to maintaining reliability.”
The annual report identifies data centres as one of the fastest-growing sources of electricity demand across Australia’s energy systems, now treated as a distinct category in AEMO’s planning and forecasting.
Data centre electricity consumption is forecast to grow from around 3% of NEM operational consumption today to approximately 8% by 2030, with 17 proposed data centre projects representing a combined maximum connection capacity of 9GW progressing through the transmission connection process as at 30 June.
To read the full article, please visit Energy-Storage.news.