Formation and early operations AEMO commenced operations on 1 July 2009, superseding several state-based and cross-state organisations. These included the National Electricity Market Management Company Limited (NEMMCO), the
Victorian Energy Networks Corporation (responsible for the operation of gas and electricity industries in Victoria), the
Electricity Supply Industry Planning Council (responsible for the operation of the electricity industry in South Australia), the South Australian operations of Retail Energy Market Company, Gas Market Company, and Gas Retail Market Operator. In 2015, AEMO became the market and independent power system operator for the Wholesale Electricity Market (WEM) in Western Australia.
Coal plant closures and system security In March 2017, AEMO sought to reassure the public that the closure of the
Hazelwood Power Station, which has a capacity of 1600 megawatts, would be offset by the availability of three mothballed gas-fired stations, which have a combined capacity of 830 megawatts, and large industrial businesses agreeing to time-shift their electricity use in the event of an emergency. The additional capacity would be provided by the
Pelican Point Power Station in South Australia,
Tamar Valley Power Station in Tasmania and
Swanbank Power Station in Queensland. In 2017,
AGL Energy reaffirmed that it intends to close the
Liddell Power Station in 2022. The closure of this and other coal-burning power stations in Australia led former
Prime Minister of Australia Malcolm Turnbull to seek advice from AEMO on extending the life of a number of them, to head off future power shortages. Turnbull said the government had been advised that if the Liddell plant were to close in 2022, there would be a 1000 MW gap in
base load,
dispatchable power generation. In order to simplify operations of the electricity market, AEMO suspended the
spot market for wholesale electricity across the country in June 2022. That move came after AEMO issued warnings for possible power interruptions amid supply shortfalls and significant price rises. In June 2023, AEMO sounded an alarm over the country's transition to renewable energy. Daniel Westerman was concerned that investment in renewables wasn't happening fast enough as two-thirds of
coal-fired power stations were expected to shut down by 2030.
Recent developments (2024–2025) In July 2024, the
Australian Renewable Energy Agency (ARENA) provided up to $15 million to AEMO to accelerate delivery of AEMO's Engineering Roadmap, aimed at advancing operational capacity for renewable generation in the National Electricity Market. The funding supports accelerating operational readiness for major power system changes, foundational enablers for energy transition, and providing long-range visibility to investors on emerging power system requirements. In August 2024, AEMO downgraded its warnings about power shortage risks in coming years, citing an improved outlook due to 5.7 gigawatts of new generation and storage developments. These included 3.9 gigawatts of batteries, 1.2 gigawatts of large-scale solar and about 400 megawatts of wind power. The improved outlook was also attributed to the decision to extend the life of the 2.9-gigawatt
Eraring Power Station north of Sydney. However, CEO Daniel Westerman emphasised it remained "critical" that new generation and transmission projects be delivered on time. In October 2024, the
Australian Energy Market Commission initiated an expedited rule change process following a request from
Delta Electricity to allow AEMO to accept cash as credit support from market participants. This addressed difficulties some generators faced in obtaining traditional bank guarantees due to evolving environmental, social, and governance policies among financial institutions. In December 2024, AEMO received $728.1 million in federal funding over five years to upgrade its core digital systems, as announced in the Mid-Year Economic and Fiscal Outlook budget update. The funding aims to "enhance energy security and reliability" and includes upgrades to operational digital systems and strengthening of AEMO's cybersecurity posture. In the 2024–25 financial year, AEMO reported a record-breaking surge in new renewable energy projects, with 29 projects totalling 4.4 gigawatts reaching full operation—double the previous year's total. ==See also==