It all begins and ends with grid

A project may have secured land, planning approval, technology and capital, but without a credible connection pathway and sufficient network capacity, its value can deteriorate rapidly.

The scale of Australia's energy transition makes this particularly important. As at June 2026, AEMO reported approximately 75 GW of generation and storage projects progressing through the NEM pipeline. During FY2026 alone, AEMO approved 14.2 GW of connection applications, while 9.1 GW of new generation and storage reached full output — more than double the previous financial year.

These volumes mean that identifying a transmission line or substation near a project is no longer sufficient. Sponsors need to understand competing connections, available network capacity, congestion, curtailment, system strength, marginal loss factors, transmission augmentation and how network conditions may change before the project actually reaches operation.

A network under construction

The network itself is being rebuilt. The NEM currently contains approximately 44,000 kilometres of transmission infrastructure, and AEMO's 2026 Integrated System Plan identifies approximately 6,000 kilometres of additional transmission by 2050 under its Step Change scenario — an expansion of roughly one-seventh of the existing network.

For batteries, solar, gas and wind projects, the technical assessment is becoming even more important. Capacity, voltage, curtailment, harmonics, system strength and costs are just some of the key elements.

What effective grid diligence tests

Effective grid due diligence therefore needs to combine power-system engineering, market analysis and financial modelling. It should test not simply whether a project can connect, but when it does connect, how much it can import and export, what constraints it may face and whether the project economics remain attractive under different grid conditions. It needs to know how this will play throughout the life of the asset, typically at least 20 years.

In an increasingly congested Australian market, grid quality can ultimately be more valuable than land quality. A well-located project with a weak connection can become stranded; a project with a strong connection position can become a highly valuable infrastructure asset.