Approach and requirements for assessing reliability

The 2026 Electricity Statement of Opportunities (ESOO) provides technical and market data for the National Electricity Market (NEM) over a 10-year forecast period from 2026-27 to 2035-36. The report assesses reliability by calculating expected unserved energy (USE) per region, which represents the proportion of forecast consumer demand that cannot be supplied due to available resources and infrastructure being insufficient. This 2026 edition incorporates updated demand forecasts reflecting population growth, electrification, and emerging data centre developments. It also enhances consideration of energy adequacy by including station-level generator energy limits and hydro weather reference year inflows to better reflect the operational realities of a transitioning power system.

Reliability assessment framework and interpretation

Reliability outcomes are evaluated against two key thresholds: the Interim Reliability Measure (IRM) of 0.0006% expected USE and the reliability standard of 0.002% expected USE. The analysis utilizes three scenarios—Slower Growth, Step Change, and Accelerated Transition—to identify investment needs. The Step Change scenario is considered the most likely outlook and is used for all core reliability assessments. Two primary assessments are conducted: the Committed and Anticipated Developments assessment, which serves as the basis for regulatory forecasts, and the Government Schemes and Actionable Developments assessment, which provides a forward-looking view of how reliability may evolve if additional policy-supported projects are delivered as planned.

Forecast electricity demand, and the infrastructure to supply it

Electricity consumption and peak demand are forecast to grow significantly. Under the Step Change scenario, underlying electricity consumption across the NEM is projected to increase from 204.2 TWh in 2025-26 to 308.4 TWh in 2035-36. This growth is driven by the electrification of transport and residential heating, alongside rapid expansion in data centres. Data centre usage is projected to increase seven-fold, growing from 5 TWh to approximately 34 TWh, or 13% of operational demand, by 2035-36. Consumer energy resources (CER) are also increasing; for example, the federal Cheaper Home Batteries Program has added 2.4 GW/7.4 GWh of household batteries since July 2025. Conversely, energy efficiency improvements are forecast to avoid more than 20 TWh of consumption by 2035-36.

The generation mix is changing fundamentally as 13.0 GW of coal-fired generation is announced to retire by 2035. This includes major plants such as Yallourn W (2028), Eraring (2029), and Gladstone (2029). To replace this capacity, approximately 40 GW of committed and anticipated projects are in the pipeline. Transmission expansion is also essential to support these new connections. The Committed and Anticipated Developments assessment includes over 3,000 kilometres of new transmission, while the Government Schemes assessment considers approximately 5,000 kilometres, including actionable projects like VNI West and Marinus Link Stage 2.

Assessing future reliability and resource adequacy

Supply scarcity risks are currently projected to be within the IRM for the upcoming 2026-27 summer in all regions. However, risks increase beyond the first half of the outlook as coal generators retire. Under the Committed and Anticipated Developments assessment, the reliability standard is forecast to be exceeded from 2030-31 in New South Wales and Victoria, 2031-32 in South Australia, 2032-33 in Queensland, and 2033-34 in Tasmania. If government-supported schemes proceed to schedule, these gaps are significantly delayed. In that assessment, reliability is maintained within the standard until 2033-34 in New South Wales, South Australia, and Victoria, and until 2034-35 in Tasmania. A Committed Only sensitivity demonstrates that without anticipated projects, reliability gaps would emerge as early as 2029-30 in New South Wales and Queensland.

Maintaining a reliable and secure power system

The nature of reliability risk is shifting from short-duration summer peak events to longer-duration shortages, particularly during winter as heating loads are electrified. In Victoria, supply scarcity risk is expected to shift from summer-dominant to winter-dominant by the middle of the outlook period. Maintaining system security is also critical, requiring timely investment in system strength, inertia, and voltage control. System strength deficits have been confirmed in New South Wales from 2027-28 and in Victoria from 2028-29, largely associated with planned coal retirements. TNSPs are expediting solutions, such as the procurement of synchronous condensers, to address these needs.

Regional outlook

New South Wales expects USE to exceed the reliability standard from 2030-31 in the central assessment, with Sydney’s data centre growth being a major contributor. Queensland accounts for nearly 30% of large industrial load in the NEM; while its reliability gaps emerge by 2032-33 under the central assessment, no exceedance of the standard is expected if developments supported by government schemes proceed. South Australia’s industrial consumption is forecast to more than double by 2035-36, while net delivered residential consumption is forecast to become negative due to high rooftop PV penetration. Tasmania remains winter-peaking, with reliability increasingly dependent on energy availability from Victoria. Victoria’s maximum demand outlook is higher than previously forecast, reflecting stronger residential demand growth and increased temperature sensitivity.