AEMO has released its Draft 2025 Electricity Network Options Report, confirming a sharp rise in real costs for transmission infrastructure and flagging major new modelling inputs ahead of the 2026 Integrated System Plan (ISP).
The biennial report (PDF) outlines updated augmentation options and new distribution network opportunities aimed at enhancing system flexibility and integrating more renewable and consumer energy resources (CER) into the grid.
It also introduces – for the first time in the ISP’s history – distribution-level investment options, in line with new rule changes stemming from the 2024 ISP Review.
Real cost estimates for overhead transmission lines are up by 25 per cent to 55 per cent compared to the 2024 ISP, while substation project costs have risen between 10 per cent and 35 per cent.
These increases, based on updated cost forecasts from GHD and Amplitude, are attributed to persistent supply chain issues, labour shortages, project complexity, market competition, and social licence pressures.
“These updates will be factored into identifying an efficient Optimal Development Path that is in the long-term interests of electricity consumers,” AEMO stated.
To better reflect emerging challenges, the draft report expands the scope of network modelling beyond transmission.
It incorporates distribution augmentation costs for voltage management and export capacity, estimated at $0.4 million and $2.4 million per megawatt respectively.
This modelling aims to support the forecast growth in CER, including rooftop solar and community batteries.
The report also introduces updated land use analysis and embeds route adjustment costs to reflect potential social, environmental, agricultural or cultural sensitivities along transmission corridors.
While AEMO acknowledges the importance of community sentiment, it has opted not to embed evolving sentiment data directly into early-stage modelling due to a lack of granular reliability.
Other key changes include closer alignment with jurisdictional planning bodies and new integration of gas infrastructure cost components, supporting improved planning for gas-powered generation under the 2026 ISP.
Stakeholder feedback on the report is open until 23 June, ahead of the final report’s release in July.