Latest AEMO plan highlights need for new renewable energy and transmission projects in Australia

The recently released 2024 Integrated System Plan (92-page / 4.1MB PDF) is AEMO’s roadmap for the transition of the National Electricity Market and sets out the ‘optimal development path’ for the required infrastructure – including renewable energy generation, storage and transmission projects - to transition to net zero carbon emissions by 2050.

The plan leans on solar and wind projects – for over 90 percent of the generation required – as well as battery storage projects, hydro and green hydrogen power plants. According to the AEMO, at least 6GW of new renewable energy capacity will be required every year until 2050 to meet Australia’s decarbonisation goals.

Leanne Olden, an energy and infrastructure law expert at Pinsent Masons, said the ISP should help put to rest any new concerns investors may have about the potential for nuclear energy to replace renewable energy as the optimal path in Australia’s energy transition.

“The ISP confirms the need for significant and urgent investment in the development of additional renewable energy and storage projects in Australia in order to ensure a smooth transition away from coal,” Olden said.

“The recent discussions around nuclear power in Australia may have created some uncertainty for investors in the renewable energy and storage sector. However, notwithstanding that the ISP cannot assess the impact of nuclear as it is not current policy, the ISP should give stakeholders comfort that AEMO sees renewable energy, backed by gas powered generation, as the path forward.”

Lee Jamali, an infrastructure and construction law expert at Pinsent Masons, said the plan also confirmed the key role transmission projects will play in Australia’s energy transition.

“The ISP confirms the need for 10,000km of new transmission lines to support and encourage investment in new renewable generation, with the net market benefit of these new transmission assets calculated by AEMO as being AU$22 billion (US$14.6 billion). Stakeholders in the transmission sector should be encouraged by these findings,” Jamali said.