In just two years, plans for expanding Australia’s power grid blueprint have been cut back as rising transmission costs and a surge in big batteries forces a rethink of how much new network is required.
New modelling from the Australian Energy Market Operator (AEMO) shows the country can meet emission targets and future power demand with fewer transmission lines than previously planned, as energy storage and smarter project placement take pressure off the grid.
The latest Integrated System Plan (ISP) trims about 85km from earlier transmission forecasts. More broadly, planned build-out has been cut by roughly 1,435km since 2024, signalling a meaningful scale back of transmission requirements.
“AEMO’s 2026 ISP shows how quickly the transmission outlook can change when battery investment accelerates and generation moves closer to demand,” said John Oh, Associate Director of Sustainable Economics at CBA.
That doesn’t mean the build is small.
Around 6,000km of new lines are still needed by 2050, which is about a 14% expansion of today’s network. But the plan is getting more targeted, as less transmission is needed to deliver the same outcome, CBA's Oh said.
What's changed? For starters, the price tag. Transmission projects have become significantly more expensive, with overhead line costs rising as much as 55% and substations up to 35%, forcing tougher calls on which projects deliver value.
At the same time, batteries are changing the game. Cheaper storage, backed by policy incentives, is allowing more power to be generated and stored closer to where it’s used, reducing the need to send electricity across long distances. That improves reliability while lowering the case for some large-scale transmission builds.
“Well-located batteries and generation don’t eliminate the need for transmission. But the closer the closer electricity generation and storage are to places of demand, the less benefit you get from additional transmission lines,” CBA’s Oh said.
The result is a more targeted network and fewer projects making the cut. Most of the reductions come from lower-priority projects scheduled for the 2030s across Queensland and the southern states. Notably, a $3.3 billion transmission expansion of Central to Southern Queensland that was once considered a priority has now been dropped from the plan.
The takeaway: Australia isn’t backing away from its grid overhaul. But as costs rise and technology improves, the plan is evolving — delivering the same end goal with less steel in the ground.
