It needs to be more than big batteries: The triumphs and failures of Australia’s green energy transition

The latest Connections Scorecard released by the Australian Energy Market Operator points to multiple records – in the amount of capacity that has reached full output on the main grid in the past year, and the growing pipeline of projects waiting to be developed.

But it also points to the triumphs and failures of Australia’s green transition in the past year: In short, battery storage is going gangbusters, solar-battery hybrids are new and exciting, but not nearly enough new wind and solar capacity is being built to meet the 2030 renewable targets, or to ensure that coal generators can be closed as scheduled.

AEMO says that 9.1 gigawatts of new generation and storage capacity reached full output in the 2025/26 financial year, which it says is a record and more than double the number of the previous year.

That’s good news. But more than half of this, just over 5 gigawatts (GW), is in the form of big battery capacity. That’s a welcome addition, but the less than 4 GW of new wind and solar capacity is way short of what is needed to meet the federal government target of 82 per cent renewables by 2030.

There is hope. Investment in wind, the problem child of Australia’s energy transition in recent years because of rising costs, planning issues, transmission capacity and social licence, has improved.

According to AEMO’s general manager, Onboarding and Connections, Margarida Pimentel, AEMO received a record 12 wind project applications in the year, totalling a record 5.2 GW.

Overall capacity in the application stage more than doubled over the previous year and the broader connections pipeline continued to expand, growing 42 per cent from 53 GW to 75.4 GW.

But at the same time total registration and application approvals were lower than last year, at 7.4 GW and 14.2 GW respectively, and once again were dominated by battery storage, with wind and solar still falling well short of the required numbers.

A few years ago, project delays would likely be attributed to the connections process, but AEMO’s Pimentel says that project changes are now key contributors to delays in commencing registration.

“Design changes and equipment substitutions can require additional assessment and rework, while the sale of projects, extended financing and commercial readiness activities are also contributing factors,” she said in a statement.

Planning issues and congested supply chains still loom large, but energy market analysts say the biggest roadblock has been in landing firm contracts, with few utilities or corporate buyers coming to the market.

The underwriting agreements offered federally in the Capacity Investment Scheme, and in states like NSW, are not enough to get the projects over the line, and were never really designed to do so without corporate or utility buyers.

The big utilities have little incentive to do so because it is their coal fired generators that will likely get paid to stay open longer if there is insufficient new capacity to allow them to close.

There is hope that data centres can provide some buying power, but that is still uncertain. In the meantime, key renewable tenders are being tweaked to make them more attractive to project developers and provide enough financial certainty to reach financial close without having to have a firm buyer.

See: “We cannot wait:” Changes made to renewable tenders to ensure wind and solar projects actually get built

Back on the Connections Scorecard, AEMO says that across FY26, the median duration of the proponent implementation phase increased from 14 to 18 months, with one third of projects having remained in this stage for more than two years.

“Battery projects continued to dominate the pipeline, accounting for 52% of total capacity and were also the fastest mover through the process,” the statement said.

AEMO noted solar and battery hybrid projects are an increasingly significant component of the development pipeline with 4.3 GW of applications received during FY26.

In addition, 2.4 GW of solar projects commenced or completed processes to add a battery energy storage system (BESS), reflecting industry’s growing interest in combining low-cost renewable generation with flexible storage.

“Together, these technologies will play an important role in delivering the diverse mix of resources needed to support Australia’s energy transition,” Pimentel said.

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