Hot weather and hungry datacentres lift Australia’s energy demand to record highs but batteries quell prices

Lead

Australia's electricity demand reached record levels in the first three months of the year, driven by extreme heat and surging datacentre usage, according to the Australian Energy Market Operator (AEMO). But despite the strain, a surge in renewable energy and battery capacity kept wholesale prices lower than last year and pushed gas-fired generation to its lowest quarterly level since 1999.

Coverage Comparison

The reports from ABC Australia and The Guardian both highlight the record-breaking demand and the growing role of renewables, but they place different emphasis on the causes. ABC frames the story primarily around the success of renewable energy in displacing fossil fuels, while The Guardian gives more weight to the contributions of datacentres and warmer conditions.

Both sources agree on the headline numbers: record demand, a renewable share of 46.5%, and a significant drop in gas generation. However, some details appear in only one report — for instance, ABC mentions a nearly 5% drop in total emissions, while The Guardian reports specific datacentre growth figures for New South Wales.

Key Claims

• Australian electricity demand hit a record high of 25GW in Q1, a 1.2% increase from the same period last year, according to AEMO data reported by both ABC and The Guardian.
• Record rooftop solar output helped meet the surge in demand, with both outlets noting that solar generation was "more than capable" of covering the increased load during heatwaves.
• Grid-scale batteries played a pivotal role, shifting renewable energy from the day to the evening peak. ABC reports that battery capacity doubled from the previous year, while The Guardian says daytime-to-evening energy shifting more than tripled.
• Gas-fired generation fell by more than a quarter year-over-year, reaching its lowest quarterly average since 1999, as reported by both sources.
• Renewable energy accounted for 46.5% of all generation in the national electricity market, a new high for the first quarter.
• Wholesale electricity prices dropped from last year, though ABC notes they rose compared to the final quarter of 2025 due to increased January demand.
• Datacentre demand in New South Wales grew by 18% year-over-year, according to The Guardian, and Victoria saw a near doubling in datacentre demand, with a record all-time maximum power demand on 27 January.
• Total emissions decreased by almost 5%, as reported exclusively by ABC.

Perspectives

Renewable Energy Advocates — Sources highlight the rapid growth of batteries and solar as evidence that Australia's energy transition is accelerating, with batteries increasingly displacing gas as the primary source of evening peak power.

Grid Operators — AEMO's commentary focuses on the technical achievement of integrating new storage capacity, noting that batteries are "increasingly absorbing excess renewable energy during the day and shifting it into the market during evening peaks."

Energy Analysts — The Grattan Institute's Alison Reeve pointed out that batteries are "overtaking gas as the main energy source for users at peak times," a significant shift in the energy mix.

Datacentre Industry — The growth of datacentres is presented as a key driver of demand, with AEMO forecasting that datacentre power demand could triple in five years, exceeding that of electric vehicles by 2030.