AEMO Warns of Transmission Cost Blowouts

On May 24, 2025, the Australian Energy Market Operator (AEMO) issued a stark warning in its Draft 2025 Electricity Network Options Report: the costs of building critical electricity transmission infrastructure are surging well beyond previous forecasts. Overhead transmission line projects have escalated by up to 55%, while substation costs are now 35% higher than those projected in the 2024 Integrated System Plan. The report attributes these increases to persistent labor shortages, global supply chain disruptions, and growing resistance from rural communities over the siting of new infrastructure. These cost pressures threaten to translate into higher electricity prices for consumers and could undermine the pace of Australia’s energy transition. AEMO emphasized that delays or cancellations of key transmission upgrades would jeopardize the country’s target of sourcing 82% of electricity from renewables by 2030. The operator is now urging coordinated national action to streamline approvals and stabilize construction inputs.