Australia's electricity demand surged to a record 25GW in the first quarter of 2026, driven by increasing datacentre needs and extreme heatwaves. The Energy Market Operator (Aemo) reported a 1.2% increase in demand compared to the same period last year. In New South Wales, datacentre demand grew by 18%, contributing to a 1.8% rise in grid electricity demand, even with a significant output from rooftop solar. On January 27, Victoria experienced its highest power demand ever, as temperatures soared above 43°C in parts of Melbourne due to heatwaves. Despite this demand, renewable energy sources provided 46.5% of total generation, a record for the first quarter. The expansion of battery storage, with an increase of 4,445MW in capacity over the past year, has played a crucial role in managing this demand. Aemo's executive, Violette Mouchaileh, noted that grid-scale batteries help absorb excess renewable energy during the day and release it during peak evening hours, which has helped lower average wholesale electricity prices by 12% compared to Q1 2025. This shift has also led to a 24% reduction in gas generation, marking the lowest output for any quarter since the market's inception.