The Australian Energy Market Operator (AEMO) released its 2025 Electricity Statement of Opportunities (ESOO) - a 10-year outlook for the National Electricity Market (NEM). The report charts the progress of Australia’s energy transition while highlighting the risks that must be managed to keep the system reliable and secure.

Coal Retirements Reshape the Outlook

Several major coal stations are due to retire before 2030 - including Eraring in NSW (2027) and Yallourn in Victoria (2028). Ensuring that new renewables, storage, and transmission projects are delivered ahead of these closures is essential to avoid reliability gaps.

Short-Term Risks in QLD & SA

The ESOO points to reliability risks emerging as soon as this summer:

• Queensland: an 80 MW shortfall in 2025–26
• South Australia: a 390 MW gap in 2026–27 if Torrens Island B retires and EnergyConnect is not yet complete.

Extensions to existing assets could ease these risks, but only as a temporary measure.

Demand Growth Driven by Data Centres & Electrification

Electricity consumption is now forecast to grow faster than in the 2024 ESOO. The expansion of data centres in Sydney and Melbourne is a key driver, alongside accelerating electrification in transport and industry.

An Accelerating Investment Pipeline

The NEM added a record 4.4 GW of new capacity in 2024–25. Over the next five years, between 5 GW and 10 GW per year is expected. Delivery risks, however, remain significant given supply chain pressures and project delays.

The Rising Role of Consumer Energy Resources

Rooftop solar, batteries, EVs, and demand flexibility are no longer side stories. If well-coordinated, these consumer resources can reduce the need for grid-scale investment and improve reliability.

Beyond Reliability: System Security

Even if there is enough generation to meet demand, the ESOO warns the grid could still face stability issues. These include keeping voltage steady, managing sudden changes, and ensuring the system runs smoothly as coal and other traditional plants retire

The Takeaway

The 2025 ESOO shows that the NEM can remain reliable through the transition, but only if projects are delivered on time, at scale, and integrated effectively. The challenge ahead is not ambition, it’s execution.

Talk to our expert energy consultants about how the ESOO insights could shape your next energy decision.