New data from Cornwall Insight has projected the Australian National Electricity Market (NEM) will increase its solar, wind, and storage capacity by more than 150GW by 2043. According to Cornwall Insight’s NEM Benchmark Power Curve, the total installed capacity for these technologies is expected to rise from 52GW in 2025 to 208 GW by 2043, a 300% increase.
The increase will be led by solar, including rooftop PV, which is expected to add an impressive 78GW over the next two decades, with wind and storage forecast to increase by 39GW and 40GW1 respectively.
The rise in installed capacity will be driven by federal and state government policies. This includes the Capacity Investment Scheme, the national renewables auction designed to decrease risk for investors and encourage investment.
Additionally statewide auctions and policy incentives included in the Victorian Renewable Energy Target, the New South Wales Electricity Roadmap and the Queensland Renewable Energy Target are expected to encourage investment in renewables.
As more coal plants reach the end of their operating life, renewable build will become key to replacing this lost capacity. But can this new capacity be delivered on time?
Despite positive predictions, Cornwall Insight’s forecasts do differ from than those of the Australian Energy Market Operator (AEMO). While the AEMO forecasts strong growth in offshore wind, the sector remains nascent in Australia with project delivery assumptions still untested. Concerns around workforce shortages, and other factors, have also led Cornwall Insight to project a longer operating life for coal plants than the AEMO, as the necessary renewable infrastructure will not be built quickly enough to replace lost capacity.
NEM installed capacity forecasts – per financial year (GW)
Source: Cornwall Insight NEM Benchmark Power Curve
Source: Cornwall Insight NEM Benchmark Power Curve
*All figures rounded up to nearest decimal point
Thomas Fitzsimons, Cornwall Insight, Senior Modeller:
“Our forecasts show the NEM will go through a significant transformation over the next two decades, as both state and federal governments work towards their renewable energy targets. The projected increase in solar, wind and storage capacity across the NEM will see larger states follow South Australia’s lead (as highlighted last month in the International Energy Agency’s report, “Integrating Solar and Wind”) as pioneering, high-renewable penetration systems.”
“While our projections are positive, there are still a number of hurdles that need to be overcome if the energy transition is to go smoothly, not least workforce shortages. Labour constraints limit the rollout of the new technologies (including offshore wind) and the unglamourous but essential network reinforcement projects which Australia needs. We have to be realistic. That said, with robust government policies and well-structured investment frameworks to broaden the technologies on offer in the NEM, the path to a greener future will become clearer and more attainable.”
References:
- All figures rounded to nearest whole number
Notes to Editors
For more information, please contact: Verity Sinclair at v.sinclair@cornwall-insight.com To link to our website, please use: https://www.cornwall-insight.com/
Copyright disclaimer for commercial use of the press releases: The content of the press release, including but not limited to text, data, images, and graphics, is the sole property of Cornwall Insight and is protected by UK copyright law. Any redistribution or reproduction of part or all of the content in any form for commercial use is prohibited without the prior written consent of Cornwall Insight.
Media Use Exemption: The information included in this press release may be used by members of the media for news reporting purposes only. Any other commercial use of this information is prohibited without the prior written consent of Cornwall Insight. All non-media use is prohibited, including redistribution, reproduction, or modification of our content in any form for commercial purposes, and requires prior written consent. Please contact: enquiries@cornwall-insight.com
About the Cornwall Insight Group Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
While our projections are positive, there are still a number of hurdles that need to be overcome if the energy transition is to go smoothly, not least workforce shortages.
Thomas Fitzsimons Senior Modeller
