Australia's Grid Needs $128 Billion — And Coal Isn't Going Anywhere Until 2049
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The energy market operator just dropped its 25-year blueprint. Renewables are still the cheapest path. But coal’s sticking around way longer than planned — and your bills are going up either way.
TL;DR:
What happened: AEMO released Draft 2026 ISP on Dec 10 — same day as social media ban
Who’s in conflict: Labor (renewables path) vs Coalition/One Nation (nuclear, coal, slower transition)
Gen Z stake: 45% of businesses under energy stress; power costs flow through to rent, jobs, groceries
What’s next: Public consultation until Feb 2026; final plan in June
The Background
On December 10, 2025 — the same day Australia’s social media ban kicked in — AEMO quietly dropped one of the most significant energy documents in years.
The Draft 2026 Integrated System Plan is a 25-year blueprint for how Australia powers homes and businesses. It’s not a wish list; it’s the plan that guides where billions of dollars in infrastructure investment goes.
The headline numbers:
MetricFigureCapital investment needed (to 2050)$128 billionTransmission lines needed (next decade)5,000 kmRenewable generation requiredTriple current capacityDispatchable storage (batteries, hydro)Double current capacityCoal closure timeline90% gone by 2035; last plant ~2049
The key finding? Renewables backed by batteries and gas remain the lowest-cost pathway to replace retiring coal. But the transition is slower than hoped.
AEMO CEO Daniel Westerman put it bluntly: “Australia’s coal-fired power stations are old, they’re retiring, and the demand needs of Australians are growing.”
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The Conflict
The Government’s position (Labor):
Energy Minister Chris Bowen has built his political brand on the renewables transition. The government’s target is 82% renewable electricity by 2030 and net zero by 2050.
AEMO’s report supports this path as cheapest. But it also acknowledges coal will stick around longer than Labor would like — and that investment isn’t happening fast enough.
The Opposition’s position (Coalition + One Nation):
The Coalition is pushing nuclear power as part of the mix. One Nation wants new coal-fired power stations — one each in Queensland, NSW, and South Australia — plus nuclear.
One Nation leader Pauline Hanson claimed vindication: “We have said stick with coal. AEMO are saying coal has to see us through for a lot longer yet.”
She pointed to Snowy 2.0 as evidence renewables aren’t delivering: “$20 billion and two years late.”
The wildcard: Snowy 2.0
The pumped hydro project was supposed to be the centrepiece of Australia’s energy storage. Original cost: $2 billion. Current estimate: $20 billion+. Original completion: 2025. Current estimate: 2027 or later.
Critics say it proves big government projects can’t deliver. Supporters say it’s still essential for grid stability.
What the report actually says:
The Draft 2026 ISP uses a “Step Change” scenario — rapid but orderly transition to renewables — as its base case. Under this scenario:
Coal closes faster than generator announcements suggest
Gas plays a “backstop” role for reliability
Home batteries and rooftop solar are “crucial” — if well-coordinated, they could save $4.1 billion in avoided grid investment
Nuclear is not modelled because it’s not legal under current law. AEMO’s separate GenCost report (with CSIRO) finds nuclear is higher-cost with longer lead times than renewables-plus-storage.
Who’s feeling the squeeze:
130,000 Australians are in energy poverty (spending >10% of income on power)
45% of businesses are under energy stress
1,400 industries have closed or relocated due to energy costs
Tomago Aluminium (NSW) may be next — it uses ~10% of NSW’s electricity
Why It Matters To You
45% of businesses are already under energy stress. If you work in hospitality, retail, or manufacturing, your job depends on power prices. If you’re renting, working in hospitality or manufacturing, or just trying to keep the lights on while you study, this affects you:
Rent: Landlords pass energy costs through. Higher power = higher rent.
Jobs: Businesses under energy stress cut staff or close.
Climate: Coal until 2049 means higher emissions for longer.
Opportunity: The transition needs workers — in solar, batteries, transmission. That’s where jobs are growing.
Bias Explanation: This coverage leans centrist-liberal because it frames the energy transition as a technocratic cost-optimisation problem (not a climate crisis or coal industry collapse) and centres official expert voices. Progressive and right-wing perspectives appear but don’t dominate the framing.
Bias comparisons derive from an AI-assisted evaluation of content sources and are protected by copyright held by Mencari News. Please share any feedback to newsdesk@readmencari.com
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