The Australian Energy Market Operator has tweaked and renamed the scenarios it uses for its multi-decade planning document, with the most obvious changes being in the uptake of electric vehicles, the setbacks for green hydrogen and uncertainty around the way household batteries will be used.
But there are also other key changes in its newly released IASR document, including what will be a welcome change in the assumptions around the wind energy and solar resource in key renewable energy zones.
This includes the south-west of NSW, where an error has been blamed for the gross-undersizing of grid capacity in the new renewable zone and the transmission link that forms its backbone.
The Inputs Assumptions and Scenarios Report (IASR) is one of a number of key documents released by AEMO this week as it reaches the half way mark of its work on the next iteration of its Integrated System Plan, which acts as its roadmap.
The others documents released on Thursday include the Electricity Network Options Report, and the Gas Infrastructure Options Report. There is a lot to unpack – the IASR alone is 250 pages and there are also at least another dozen separate reference documents, all totalling several thousand pages.
The standout changes in the IASR documents are the tweaks to the scenario modelling, and the new scenario names that reflect some of the big changes in technology assumptions that have emerged over the past 12 to 18 months.
The central scenario Step Change retains the same name, and is aligned with a below 2°C climate scenario (actually 1.8°C) where a decarbonised grid forms the foundation of emissions cuts elsewhere in the economy.
However, Progressive Change morphs into Slow Growth ( 2.6°C) and takes into account a weaker economy and smaller industrial loads, and Green Energy Exports becomes Accelerated Transition (1.5°C), and accepts the reality that hydrogen exports are not happening anytime soon, and focuses on strong uptake of consumer energy resources.
The best summary of these changed assumptions for 2040 is this table below.
Focusing on the main Step Change scenario, the big changes since 2023 are in the forecasts for EV uptake (now 43 per cent of the total fleet instead of 60 per cent), residential electrification (6 terawatt hours instead of 9 TWh), and a near halving of green hydrogen consumption to 15 TWh down from 28 TWh.
Business electrification is now expected to account for 34 TWh rather than 25 TWh, and energy efficiency savings are now estimated at 41 TWh rather than 36 TWh.
AEMO’s executive general manager of system design, Merryn York, who leads the team putting together the ISP, says that more than 1,100 stakeholders had contributed input and feedback, and there were more than 240 individual submissions.
“This high level of engagement is critical to preparing a well understood and robust ISP,” York said in a statement. “With these key inputs now finalised, AEMO will commence modelling with the best available information to inform the Draft 2026 Integrated System Plan, due for public consultation in December 2025,” she said.
But it is some of the other perhaps more obscure details that will garner most interest. One of them is the capacity factor ratings in various renewable energy zones, which are key to estimating the size and scale of the transmission infrastructure in those regions.
“Following stakeholder feedback … AEMO has revised the approach used to calculate REZ capacity factors estimates to reflect alternative data considered more appropriate for new project developments,” it says.
Those changes include the adoption of new datasets from the Bureau of Meteorology which provide improved spatial granularity and representation of VRE potential across Australia, and an increase of the assumed hub height for wind generators to 150 metres.
One of the key areas is in the south-west REZ in NSW, where the capacity factor rating of various wind projects has been lifted to 37 per cent from 29 per cent.
It’s not the only region to benefit from a re-rating – but it is topical given the number of huge wind and battery projects proposed for the region, including by the likes of Squadron, Windlab, Engie and others and who are calling for added infrastructure to built to accommodate the projects.
It is one of the best regions for wind and solar in the country, with the added advantage of a relatively flat landscape that makes logistics easier, and a sparse and mostly supportive local population.
In the recent NSW tender for access rights to the local grid, only 3.5 GW out of an estimated 19 GW of proposed capacity were granted access, meaning some key projects were left stranded, including one of the winning projects in the federal government’s Capacity Investment Scheme.
