{"id":101117,"date":"2026-08-19T12:22:40","date_gmt":"2026-08-19T02:52:40","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=101117"},"modified":"2026-08-19T12:22:40","modified_gmt":"2026-08-19T02:52:40","slug":"aemo-cautious-planning-costing-money","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/aemo-cautious-planning-costing-money\/","title":{"rendered":"Could AEMO\u2019s Cautious Grid Planning Be Costing You Money?"},"content":{"rendered":"

\"AEMO<\/p>\n

Australia\u2019s electricity market operator has been warned that an overly cautious approach to planning the grid could leave consumers paying more than necessary.<\/p>\n

That\u2019s one of the findings of an independent review of the Australian Energy Market Operator<\/a> (AEMO), which has also raised concerns about potential conflicts between some of the organisation\u2019s expanding responsibilities.<\/p>\n

Energy ministers have agreed to reforms aimed at addressing both issues.<\/p>\n

Why Could Caution Cost Consumers?<\/h2>\n

Keeping the lights on is AEMO\u2019s day job, so being cautious about the future electricity system might sound like a good thing.<\/p>\n

The problem is that caution can be expensive.<\/p>\n

AEMO develops the Integrated System Plan (ISP), which maps out the generation, storage and transmission infrastructure needed as Australia\u2019s electricity system changes.<\/p>\n

The review, led by former senior Treasury official Nigel Ray, found AEMO\u2019s responsibility for maintaining system reliability and security gives it a naturally conservative approach to risk.<\/p>\n

But it warned:<\/p>\n

\u201cThis approach has cost consequences for consumers if that caution brings forward investment or overstates required intervention.\u201d<\/p><\/blockquote>\n

That matters because the ISP can identify major transmission projects as \u201cactionable\u201d. The review says that status is difficult to unwind and can commit consumers to significant, long-lived regulated expenditure.<\/p>\n

Those network costs are ultimately recovered from electricity consumers.<\/p>\n

The review does not conclude AEMO has been unnecessarily building infrastructure or wasting consumers\u2019 money. Instead, it identifies a risk in the way planning decisions are made.<\/p>\n

Could Solar And Batteries Help Keep Grid Costs Down?<\/h2>\n
\"A

Regulators are looking at how home batteries can better support the grid.<\/p><\/div>\n

Rather than taking long-term planning away from AEMO, the review wants changes to the rules governing the ISP.<\/p>\n

Among them is greater consideration of the demand side \u2013 how electricity consumers and resources connected to distribution networks can help meet the needs of the system.<\/p>\n

The review says greater innovation, including on the demand side and at distribution level, could reduce reliance on costly and time-consuming grid-scale infrastructure and minimise the overall cost of the energy transition.<\/p>\n

That potentially includes the growing fleet of rooftop solar systems, home and community batteries, electric vehicles and flexible loads.<\/p>\n

Energy ministers have agreed, with the ISP rules now under review<\/a>.<\/p>\n

And Then There\u2019s A Potential Conflict Of Interest<\/h2>\n

Consumer costs weren’t the only concern to emerge from the review.<\/p>\n

AEMO also controls AusEnergy Services Limited (ASL), which carries out energy investment procurement work for governments.<\/p>\n

That creates an unusual arrangement. AEMO operates the electricity system and helps determine through its planning what the future system needs, while its subsidiary is involved in procuring energy investment.<\/p>\n

The review found ASL\u2019s investment procurement role did not align with AEMO\u2019s core functions, creating differing mandates and \u201cperceived conflicts of interest\u201d.<\/p>\n

The proposed solution is simple: separate them.<\/p>\n

Energy ministers have agreed ASL should be spun out as a standalone organisation.<\/p>\n

That hasn’t happened yet. Senior officials still need to work out the implementation and timing, in consultation with ASL, its existing members and potential future members.<\/p>\n

Who\u2019s Watching AEMO\u2019s Own Spending?<\/h2>\n

The review also turned its attention to what AEMO itself costs to run.<\/p>\n

Its budget has nearly tripled over five years, although AEMO estimates its NEM functions currently add only around $16 a year to an average residential electricity bill.<\/p>\n

The bigger governance problem identified by the review is the lack of binding independent external scrutiny of whether AEMO\u2019s expenditure is efficient.<\/p>\n

Energy ministers have agreed in principle to give the Australian Energy Regulator a new role overseeing AEMO\u2019s annual budget.<\/p>\n

AEMO has welcomed the review and begun work on the recommendations that fall within its control.<\/p>\n

For households, however, the more consequential reform may be changes to the way AEMO decides what future grid infrastructure is needed.<\/p>\n

Australia needs enormous investment in its electricity system over the coming decades. The review isn’t arguing against that investment. It’s asking whether consumers can be better protected from paying for infrastructure earlier than necessary \u2013 or when a cheaper solution could do the job.<\/p>\n

And with more solar, batteries and flexible loads appearing behind the meter, what consumers can contribute to the grid may increasingly matter just as much as what gets built in front of it. AEMO’s recent analysis of 20,000 Australian homes<\/a> shows just how much difference home batteries are already making to when households rely on the grid.<\/p>\n","protected":false},"excerpt":{"rendered":"

Australia\u2019s electricity market operator has been warned that an overly cautious approach to planning the grid could leave consumers paying more than necessary. That\u2019s one of the findings of an independent review of the Australian Energy Market Operator (AEMO), which has also raised concerns about potential conflicts between some of the organisation\u2019s expanding responsibilities.<\/p>\n","protected":false},"author":29,"featured_media":101119,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[551],"tags":[],"class_list":["post-101117","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-battery-storage","entry"],"acf":[],"yoast_head":"\nCould AEMO\u2019s Cautious Grid Planning Be Costing You Money?<\/title>\n<meta name=\"description\" content=\"Could AEMO\u2019s grid planning be costing consumers more? 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He enjoys translating complex aspects of the solar industry into content that the layperson can understand and digest. He spends his time reading about renewable energy and sustainability, while simultaneously juggling teaching and performing guitar music around various parts of Australia. Read Kim's full bio.","url":"https:\/\/www.solarquotes.com.au\/blog\/author\/kimwainwright\/"}]}},"jetpack_shortlink":"https:\/\/wp.me\/p2FF2s-qiV","jetpack-related-posts":[{"id":100394,"url":"https:\/\/www.solarquotes.com.au\/blog\/home-battery-helping-keep-lights-on\/","url_meta":{"origin":101117,"position":0},"title":"Is A Neighbour’s Home Battery Keeping Your Lights On?","author":"Kim Wainwright","date":"July 15, 2026","format":false,"excerpt":"Home batteries are often promoted as a way to keep the lights on when the grid goes down. But according to a new report from the Australian Energy Market Operator (AEMO), they may increasingly be helping keep the grid up in the first place. WA's latest Electricity Statement of Opportunities\u2026","rel":"","context":"In "Battery Storage"","block_context":{"text":"Battery Storage","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/battery-storage\/"},"img":{"alt_text":"AEMO ESOO report 2026","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-wa-report-2026.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-wa-report-2026.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-wa-report-2026.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-wa-report-2026.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-wa-report-2026.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":100850,"url":"https:\/\/www.solarquotes.com.au\/blog\/20000-homes-home-batteries\/","url_meta":{"origin":101117,"position":1},"title":"What 20,000 Homes Reveal About Solar Batteries","author":"Kim Wainwright","date":"July 30, 2026","format":false,"excerpt":"If you've ever wondered what difference a home battery actually makes to the way your home interacts with the grid, the Australian Energy Market Operator (AEMO) has some new real-world data. Buried in the latest Quarterly Energy Dynamics report is a comparison of 20,000 Australian homes that examines how households\u2026","rel":"","context":"In "Battery Storage"","block_context":{"text":"Battery Storage","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/battery-storage\/"},"img":{"alt_text":"AEMO imports exports report 2026","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-imports-exports-2026-report.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-imports-exports-2026-report.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-imports-exports-2026-report.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-imports-exports-2026-report.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2026\/07\/aemo-imports-exports-2026-report.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":38560,"url":"https:\/\/www.solarquotes.com.au\/blog\/aemo-report-vpp\/","url_meta":{"origin":101117,"position":2},"title":"AEMO Judgement On SA VPPs: Yes, They Help The Grid And Turn A Profit","author":"Richard Chirgwin","date":"March 30, 2020","format":false,"excerpt":"South Australia\u2019s Virtual Power Plant isn\u2019t just delivering electricity to consumers in that state - it\u2019s also proven successful at helping the SA grid respond to grid-scale events. And that grid-response is a profitable sideline for the VPP. That\u2019s the conclusion offered in this AEMO paper, an analysis of the\u2026","rel":"","context":"In "Battery Storage"","block_context":{"text":"Battery Storage","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/battery-storage\/"},"img":{"alt_text":"South Australia VPP - tesla powerwall 2","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/03\/tesla-vpp-battery.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/03\/tesla-vpp-battery.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/03\/tesla-vpp-battery.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/03\/tesla-vpp-battery.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2020\/03\/tesla-vpp-battery.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":47530,"url":"https:\/\/www.solarquotes.com.au\/blog\/aemo-vpp-report-mb1877\/","url_meta":{"origin":101117,"position":3},"title":"AEMO Virtual Power Plant Reports Released","author":"Michael Bloch","date":"February 12, 2021","format":false,"excerpt":"The Australian Energy Market Operator has published its latest Virtual Power Plant (VPP) Knowledge Sharing Report and VPP Consumer Insights Interim Report. What Is A Virtual Power Plant? 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We're living in interesting times; times that Leader of the Opposition Peter Dutton is already blaming on Labor. Some (many) would argue it was\u2026","rel":"","context":"In "General Solar & Storage News"","block_context":{"text":"General Solar & Storage News","link":"https:\/\/www.solarquotes.com.au\/blog\/category\/solar-battery-news\/"},"img":{"alt_text":"Australia's electricity system - lack of reserve","src":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/lack-of-reserve.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/lack-of-reserve.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/lack-of-reserve.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/lack-of-reserve.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.solarquotes.com.au\/blog\/wp-content\/uploads\/2022\/06\/lack-of-reserve.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":22897,"url":"https:\/\/www.solarquotes.com.au\/blog\/aemo-integrated-system-plan-mb671\/","url_meta":{"origin":101117,"position":5},"title":"AEMO Releases Integrated System Plan For National Electricity Market","author":"Michael Bloch","date":"July 18, 2018","format":false,"excerpt":"While some are seeing an important AEMO report as a big win for coal - it's anything but. However, what it envisions still leaves us with coal power capacity hanging around for a long time; albeit continually dwindling. 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