Australia's electricity demand reached record highs in the first quarter of 2026, driven by increased datacentre usage and warmer weather, but growth in renewable energy and battery storage helped keep prices down, according to the Australian Energy Market Operator (Aemo).
Total electricity demand hit 25GW in Q1 2026, up 1.2% from the same period last year. Rooftop solar output also reached record levels, offsetting much of the increase. However, in New South Wales, where datacentre demand rose 18% year-on-year, grid demand grew by 1.8% despite solar gains.
Victoria also saw a near doubling in datacentre demand and set a new all-time maximum power demand on 27 January, when temperatures exceeded 43°C in parts of Melbourne during an extreme heatwave. Adelaide experienced two such heatwaves, with air conditioning demand more than doubling 2025 levels.
Renewable energy supplied 46.5% of generation across the national electricity market, a new high for the first quarter. Batteries more than tripled their daytime-to-evening energy shifting, supported by 4,445MW of new large-scale battery capacity in the past year, doubling total installed capacity.
Aemo's Violette Mouchaileh said batteries were changing how electricity is produced and priced, absorbing excess renewable energy during the day and releasing it during evening peaks, reducing reliance on gas and hydro. Average wholesale electricity prices fell 12% compared to Q1 2025.
Dr Dylan McConnell of the University of New South Wales called batteries a bright spot in the energy transition, noting they are now significantly contributing to evening peak demand and displacing gas. Gas generation was the lowest for any quarter since 1999, down 24% year-on-year, while coal-fired generation also fell.
