🔄 AEMO Updates Future Energy Plans: EVs, Hydrogen, and Households Reshaped
Jul 31
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Australia’s energy future just got a major revision. The Australian Energy Market Operator (AEMO) has updated its key planning scenarios for the nation's electricity system, with big changes in electric vehicles (EVs), green hydrogen, and how households use and store power.
These changes come from the newly released Inputs Assumptions and Scenarios Report (IASR) — a foundational document that will shape the next Integrated System Plan (ISP), due in draft form by December 2025.
🧩 Scenario Shake-Up: What’s In, What’s Out
AEMO uses different "scenarios" to plan for a range of possible futures. Here’s what’s new:
Step Change: Still the central scenario, aiming for net zero and limiting climate change to 1.8°C.
Progressive Change → Slow Growth: Now assumes a weaker economy, less industrial activity, and slower tech uptake (aligned with a 2.6°C pathway).
Green Energy Exports → Accelerated Transition: Now reflects that hydrogen exports are unlikely to boom soon, shifting focus to strong consumer energy resource (CER) growth like rooftop solar and batteries.
📉 EV Uptake & Hydrogen Use Slashed
The Step Change scenario still expects major clean energy growth, but expectations have been reined in:
🚗 EV penetration reduced from 60% to 43% of Australia’s fleet
🏡 Residential electrification cut from 9 TWh to 6 TWh
💧 Green hydrogen demand halved from 28 TWh to 15 TWh
However, there are also positives:
🏢 Business electrification increased from 25 TWh to 34 TWh
💡 Energy efficiency savings upgraded from 36 TWh to 41 TWh
More than 1,100 stakeholders contributed to shaping these updates, showing growing collaboration across the energy sector.
🌬️ South-West NSW: Wind Capacity Upgraded
One of the most important technical corrections came in the wind energy assumptions — especially in the south-west Renewable Energy Zone (REZ) in NSW. A previous error had underestimated the wind resource, which now has been corrected:
✅ Wind capacity factor upgraded from 29% to 37%
📈 Better Bureau of Meteorology datasets and taller turbines (150m hub height) now included
Why it matters: this change could unlock billions in new renewable investment in one of Australia’s best regions for wind and solar. Companies like Squadron Energy, Windlab, and Engie are ready to build, but need grid infrastructure to connect.
Despite this potential, a recent NSW tender only approved 3.5 GW out of 19 GW of proposed capacity — leaving major projects in limbo, including those that had already won federal support.
🏠 Households and Distribution Grids in the Spotlight
One subtle but critical shift in AEMO's approach: more attention on household energy systems and the role of distribution networks.
With the rise of rooftop solar, batteries, and electric appliances, the power grid is becoming more decentralized. These updates show AEMO is now planning a future where millions of homes become part of the energy solution, not just consumers.
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