Australian renewables hit record 80.4% NEM share as solar and storage expand

Renewable and storage generation reached a record 80.4% of the National Electricity Market on 19 September 2026, according to the Australian Energy Market Operator’s Quarterly Demand Report. This figure was 3.2 percentage points higher than the same period in 2025 and 1.8 percentage points above the previous record set in October 2025.

The data highlights the expanding role of distributed solar in the grid. At the Q3 2026 peak, distributed solar supplied 51.8% of total generation. These figures illustrate the current scale of renewable integration within the NEM, with storage and solar assets contributing significantly to daily demand.

Distributed Solar Expansion

The National Electricity Market now hosts 27 GW of distributed solar capacity across 3.9 million installations, a 12% increase year-on-year, according to the AEMO Quarterly Demand Report. This network of small-scale systems, typically rooftop panels, generated an average of 3,203 MW during Q3 2026, up 13% from the prior year. The sector’s scale is most visible at peak times, when distributed assets produced 16,992 MW on 20 September 2026.

State	Distributed Solar Capacity (GW)
New South Wales	9.3
Queensland	8.3
Victoria	6.1
South Australia	3.1
Tasmania	0.4

Regional distribution shows New South Wales and Queensland leading with 9.3 GW and 8.3 GW respectively, while Victoria follows at 6.1 GW. South Australia holds 3.1 GW, and Tasmania contributes 0.4 GW. These figures reflect the geographic spread of residential and small commercial adoption, with the two largest states accounting for the majority of installed capacity. The year-on-year growth in both capacity and average output indicates a steady expansion of this decentralized generation source within the NEM.

Grid-Scale Solar Performance

According to the AEMO Quarterly Demand Report, grid-scale solar facilities accounted for 16.4% of total electricity generation during the Q3 2026 peak. These large-scale installations produced an average of 2,211 MW over the quarter, marking a year-on-year growth of 512 MW, which equates to a 30% increase. Their contribution to overall generation rose to 8.5%, a 1.9 percentage point jump from the prior year.

The sector's strong performance is highlighted by its peak outputs. On 27 August 2026, grid-scale solar reached a maximum of 8,290 MW. This peak was 112 MW, or 1.4%, higher than the Q1 2026 record. Violette Mouchaileh, AEMO’s Executive General Manager for Policy and Corporate Affairs, observed that while electricity demand keeps rising, the expansion of solar and storage is altering the timing of energy production, grid consumption, and daily shifts in supply.

Curtailment and Grid Constraints

Curtailment, the deliberate reduction of generation to maintain grid stability, has risen alongside the rapid expansion of solar capacity in the National Electricity Market. According to the AEMO Quarterly Demand Report, total network curtailment averaged 281 MW during the quarter, an increase of 139 MW compared to the same period last year. Grid-scale solar assets accounted for 169 MW of this figure, up 105 MW year-on-year. This growth reflects the physical limits of transmission networks, which are often saturated when local solar output exceeds immediate demand or export capacity.

As a percentage of available generation, solar curtailment reached 6.7%, a 3.6 percentage point jump from the previous year. The burden falls disproportionately on states with the highest solar penetration. New South Wales recorded 104 MW of grid-scale solar curtailment, rising by 64 MW, while Queensland saw 48 MW, up 41 MW. In contrast, Victoria reported 15 MW and South Australia just 1.0 MW, both unchanged from the prior year. These regional differences highlight how localized grid constraints interact with specific state-level solar buildouts, forcing operators to manage excess energy within their respective zones.

Battery Storage Impact

• 75% of households with solar and batteries drew less grid power during the evening peak, according to the AEMO Quarterly Demand Report.
• Cumulative CER battery capacity reached 13,917 MWh in Q3 2026, an increase of 1,652 MWh or 13% since Q2 2026.
• Battery installations totaled 482,835, up 62,569 from 1 July to 30 September 2026.
• New South Wales held the largest share of battery capacity at 5,885 MWh, followed by Victoria at 3,185 MWh and Queensland at 3,166 MWh.
• South Australia recorded 1,568 MWh, while Tasmania contributed 114 MWh to the national total.
• AEMO Executive General Manager Policy and Corporate Affairs Violette Mouchaileh stated that increased battery charging and discharging contributed to significantly lower evening peak prices, with batteries setting prices in almost half of dispatch intervals, up from 18% a year ago.
• Grid-scale batteries charged 13.4 GWh/day and discharged 10.9 GWh/day during the evening peak.
• Grid-scale batteries supplied 8% of total generation, exceeding gas-fired generation at 5.1%.

Residential and commercial energy storage growth is altering how the NEM consumes power. Data indicates that three-quarters of homes using both solar panels and batteries cut their grid usage during the evening peak, a time traditionally marked by high demand and low renewable generation. This trend suggests distributed storage is successfully mitigating daily demand spikes by redirecting energy use away from the day's most strained periods.

Major grid-scale assets are becoming central to pricing mechanisms and supply stability. With cumulative capacity rising 13% in one quarter, these facilities have emerged as a primary source of evening electricity. The observation that batteries determined prices in nearly half of dispatch intervals signals a core market transformation, reducing reliance on gas-based pricing. The volume of daily discharge during the evening peak highlights this operational shift, as storage now surpasses gas-fired generation in total grid contribution.

What to watch

The scale of upcoming infrastructure remains the primary operational challenge. Luminity reported on 21 October that the grid queue contains 80.9 GW of generation and storage projects, exceeding the National Electricity Market’s current total capacity of 77 GW. In the September quarter, 23 projects totaling 4.5 GW received connection application approval, while four projects totaling 1 GW connected to the network. AEMO group manager of onboarding and connections James Lindley stated that 15 GW of generation is scheduled to retire in the coming decade. This transition period requires careful management to ensure that new renewable capacity comes online as older assets are decommissioned, maintaining system reliability without excessive curtailment.

Demand-side response programs are also introducing new variables to grid stability. Luminity reported on 14 October that free three-hour midday power plans were introduced in July 2026 for South Australia, New South Wales, and Queensland. Victoria’s Midday Power Saver offer launched in early October 2026, extending these incentives to that state. These programs have already triggered measurable shifts in consumption patterns. A 360 MW demand spike in energy management systems was recorded across the four states, while Victoria recorded a demand spike of over 700 MW in 30 minutes on 28 August 2026. As more households participate in these time-of-use incentives, the interplay between distributed battery charging and midday solar output will continue to test local grid constraints.

The broader market impact of storage expansion is also evident. Luminity reported on 14 October that federal scheme battery installations reached over 500,000 units. AEMO CEO Daniel Westerman stated that grid-scale batteries set wholesale prices nearly 50% of the time during the September 2026 quarter. Wholesale electricity prices decreased across all NEM regions during this period. The continued growth of both residential and grid-scale storage suggests that price formation mechanisms will remain a focal point for market participants as renewable penetration increases.