The Australian Energy Market Operator (AEMO) has released a major update to its Electricity Demand Forecasting Methodology, with a strong emphasis on increasing the transparency of growing sectors including data centres and large industrial loads on Australia’s electricity system.
The methodology is reviewed at least every four years through a formal two-stage consultation process with governments, industry, network businesses and consumers, consistent with the Australian Energy Regulator’s Forecasting Best Practice Guidelines.
In a first for AEMO’s forecasting approach, data centres will now be forecast and reported as a standalone component, rather than being grouped with other commercial loads as previously done.
AEMO’s Group Manager of Forecasting, Andrew Turley, said this marks a significant step in recognising the scale, complexity and accelerating growth of digital infrastructure driven by artificial intelligence, cloud computing and global data services.
“Data centres are emerging as a major driver of electricity demand growth that will have a key influence on our power system. Our updated methodology ensures we’re capturing this transformation with the transparency and rigour it requires,” Mr Turley said.
“This is about providing accurate, independent forecasts to guide the investment and planning decisions that will shape Australia’s energy future.”
With rapid expansion underway, AEMO has developed a new data centre forecasting component that integrates econometric analysis, industry surveys and techno-economic modelling to better anticipate future electricity needs in this high-growth sector.
In FY2025, data centres across the National Electricity Market (NEM) are estimated to have consumed around 4 terawatt hours (TWh) of electricity – approximately 2.2% of total grid demand.
AEMO’s 2025 Inputs, Assumptions and Scenarios Report, released last week, forecasts that under the Step Change scenario, data centre energy consumption increases by an average of 25% year-on-year, reaching around 12 TWh by 2029-30 – the equivalent to 6% of the NEM’s grid supplied electricity.
Over the longer term to 2050, data centre electricity demand are forecast to continue to grow, at an average of 6% per year, reaching around 34 TWh (or 12% of the grid supplied electricity) by 2049-50.
The methodology also increases consideration of prospective large industrial loads (LILs), informed by industrial customer surveys and network standing information requests.
These changes will capture emerging demand from sectors like electrified minerals processing, advanced manufacturing and hydrogen production, and help ensure that planning activities will appropriately consider the infrastructure needs to support load growth.
Further enhancements include more granular geographical representations of load growth, ensuring that each State’s developing regions are appropriately represented in planning the power system’s development needs, and an extended weather reference period to better incorporate weather variability.
The new methodology represents a significant uplift in forecasting capability and will be implemented for the first time in the upcoming 2025 NEM Electricity Statement of Opportunities (ESOO), due in late August.
“This is a significant update that not only directly supports the 2025 ESOO but will also be used for the next Integrated System Plan (ISP), scheduled for release in 2026,” Mr Turley said.
“It also reflects our ongoing commitment to robust, transparent and evidence-based forecasting.”
The final Electricity Demand Forecasting Methodology and accompanying Stakeholder Consultation Report are now available on AEMO’s website.
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