​AEMO released its draft 2026 Integrated System Plan (ISP) on 10 December 2025. The document outlines future capacity and transmission buildout for the NEM based on least-cost modelling, in three different scenarios, and forms a key role in government planning. The ISP is now open for consultation, with responses closing on 13 February 2026.

While we take our time to fully read through all published documents, the draft clearly outlines a significantly expanded role for grid-scale battery energy storage in the NEM. Here are five charts that illustrate how the ISP reshapes expectations for BESS - and why.

1. Draft 2026 ISP lifts BESS capacity by by 60% in 2030

• Grid-scale battery energy storage reaches 24 GW by 2030, around 9 GW higher than in the 2024 ISP.
• This is also 6 GW above our latest Central Scenario forecast, which otherwise aligns with AEMO’s trajectory to 2028.
• Achieving this build-out will depend on strong pipelines through the CIS, LTESA processes and the launch of ESEM. For more on the ESEM, listen to our interview on NEM reform with Tim Nelson.
• Importantly, AEMO maintains a central role for grid-scale BESS well into the 2040s, rather than shifting to other technologies as in the previous ISP.

2. NSW is the core growth market for utility-scale batteries

• The state reaches 8 GW of BESS in 2030, climbing to 10 GW in 2034. This reflects the exit of coal generation and rising demand.
• Other mainland states grow strongly from 2028 to 2029 but then stabilise until late-2040s increases in Queensland.
• Tasmania continues to rely on flexible hydro capacity and shows no BESS build-out in the draft ISP.

3. AEMO reduces its expectations for consumer energy resource storage

• CER storage falls by 9 GW relative to the 2024 ISP in the late 2030s and 2040s.
• The key factor is a decline in coordinated CER, with participation in VPPs remaining lower than expected.
• This reduction occurs despite high demand for household batteries under the federal subsidy scheme, which is now facing calls for reform.

4. BESS serves as a buffer for slower transmission development

• All major transmission projects have been delayed relative to the 2024 ISP, reflecting the slow pace of progress so far.
• This shifts the peak in transmission construction to 2030, two years later than previously expected.
• With some 2040s projects removed from the ISP, AEMO offsets these gaps with higher BESS capacity throughout the 2030s and 2040s.

5. BESS becomes the primary source of dispatchable capacity

• Grid-scale batteries emerge as the largest contributor to dispatchable capacity throughout the transition.
• CER storage grows steadily and overtakes BESS in the late 2040s.
• New pumped hydro plants Snowy 2.0 and Borumba later add more than 400 GWh of long-duration storage, providing depth during sustained periods of low renewable output.

Overall, the draft ISP positions grid-scale BESS as a central pillar of the future NEM. While reduced Capex is a significant factor, so are changing fortunes for alternative technologies.

Coordinated CER storage through VPPs takes a big hit in particular as consumer take up remains slow. Transmission remains critical, but slower delivery schedules mean storage will provide a larger share of system flexibility and reliability through the 2030s.

For developers and investors, the ISP reinforces the importance of revenue-support mechanisms as the NEM transitions into a storage-led system.