$36 billion. That’s roughly the figure sitting against Queensland’s state-owned pumped hydro and transmission build when you add Borumba, CopperString and the associated REZ works together, all carried on the Queensland government’s own books rather than a developer’s. Compare that with Akaysha Energy’s Waratah battery, built with Blackstock and super-fund money and barely a mention of government equity beyond a Capacity Investment Scheme contract. Same grid, same decade, two completely different ownership models financing the same outcome: more dispatchable capacity. The question of which model actually works better has mostly been argued as ideology. It shouldn’t be.
What public ownership actually looks like in 2026 #
Public generation ownership in the NEM isn’t one thing any more. It ranges from Queensland’s fully state-owned Stanwell and CS Energy fleets, to Victoria’s revived State Electricity Commission chasing a minority equity stake in offshore wind, to NSW’s more arms-length approach of contracting private developers while the state carries transmission risk through EnergyCo.
Queensland is the cleanest test case because it owns the generators outright and is now building the firming to match. The state’s energy plan leans on two pillars, pumped hydro at Borumba and a transmission spine to the north-west minerals province, both discussed at length in our piece on Queensland’s energy plan and its two pillars. The logic is straightforward: a government that already owns the coal fleet it’s retiring can borrow at sovereign rates to build what replaces it, and isn’t answerable to a board demanding a return inside a normal investment horizon.
Victoria’s version is softer. The SEC isn’t buying out AGL or EnergyAustralia’s generation; it’s taking minority positions in new renewable projects, most visibly offshore wind, where the economics are still unproven at scale. We covered how that’s testing the model in Victoria’s SEC revival meets its offshore wind test. It’s public ownership as a nudge rather than public ownership as the whole system.
What private capital has actually delivered #
Private developers have built most of the grid-scale wind, solar and battery capacity that’s gone in over the past five years, and they’ve done it fast when the return stacked up. Neoen built Hornsdale and is now scaling wind at Goyder South and the South-Western Downs, a trajectory we tracked in our profile of Neoen Australia’s shift from battery pioneer to wind developer at scale. Akaysha has no retail brand at all, just a balance sheet and a string of battery projects, detailed in our look at Akaysha Energy’s battery-only development model. Iberdrola is building quietly across Port Augusta and the old Infigen assets without much noise at all.
None of that happened because the companies are virtuous. It happened because the returns were there, underwritten in large part by the Capacity Investment Scheme, which is itself a quietly public instrument doing the heavy lifting behind a private facade. The scheme’s auction design and its revenue floors and caps are explained properly in our piece on how the Capacity Investment Scheme actually works. Strip the CIS out and a fair chunk of this “private” build looks a lot more exposed to merchant price risk than the headline ownership structure suggests.
The pace question, stated plainly #
Private capital moves faster when a project is bankable on its own economics. Batteries are the best example: short construction timelines, proven technology, revenue stacking across frequency control and arbitrage that doesn’t require a government guarantee to pencil out. The Waratah Super Battery is privately built and already earning its keep as a grid shock absorber, something we wrote about directly in Waratah Super Battery: the shock absorber finally earning its keep.
Public ownership moves faster, or at least more certainly, on the assets private capital won’t touch without heavy subsidy. Pumped hydro is the obvious case. Snowy 2.0 has blown out past $12 billion and years behind schedule under a model that’s effectively government-owned already, which tells you public ownership isn’t a guarantee of discipline either. It’s covered at length in our piece on whether Snowy 2.0 will ever earn its keep. Borumba is following a similar cost trajectory under direct state ownership. The lesson isn’t that public builds slower than private. It’s that long-duration storage is hard and expensive regardless of who’s signing the cheques, and public balance sheets are simply more willing to absorb the overrun because voters, not shareholders, wear the consequence.
Transmission is where the ownership question gets honest #
Generation gets the headlines but transmission is where the public-versus-private argument actually bites, because almost nobody wants private capital anywhere near the poles and wires that decide who connects and who doesn’t. Powerlink is state-owned and building CopperString to the north-west minerals province on exactly that logic, a bet examined in our profile of Powerlink’s CopperString bet. VNI West, by contrast, is a regulated private build tangled in a paddock dispute near Kerang that’s dragged on for years, a mess we detailed in VNI West: the interconnector stuck in a paddock dispute.
The regulated-asset-base model that underpins private transmission investment guarantees a return set by the Australian Energy Regulator, which is a form of socialised risk dressed up as private enterprise. Who actually carries the cost of all this gets a proper airing in who really pays for the transmission build-out. Short version: consumers do, through regulated charges, whether the owner is a state government or a listed infrastructure fund. The ownership label changes who gets the dividend. It barely changes who foots the bill.
Where I land on this, and why #
I’ll admit I used to think this argument was mostly settled in favour of private capital, on the basis that markets allocate risk better than treasuries do. I’ve softened that view. The honest comparison isn’t public versus private in the abstract, it’s which asset class each is being asked to carry. Private capital is genuinely excellent at batteries and wind, where construction risk is low and revenue is predictable enough to underwrite with a contract. It’s notably worse at anything with a decade-long payback and genuine engineering risk, which is exactly why almost all of Australia’s pumped hydro and most of its new transmission sits with governments, not funds.
My mildly contrarian view, and I’ll state it plainly: Queensland’s model of owning the generation and the firming together is structurally sounder than Victoria’s halfway house of minority equity stakes, even though it ties up a vastly larger amount of state capital and carries real execution risk, because it removes the coordination failure where private developers under-build storage relative to variable generation. AEMO’s Integrated System Plan keeps flagging exactly that mismatch, and our explainer on what the ISP actually says is worth reading alongside this one if you want the modelling behind the claim. Queensland’s approach is more expensive upfront and more politically exposed if Borumba’s costs keep climbing the way Snowy 2.0’s did. But a state that owns both sides of the ledger, generation and firming, can sequence the build to match demand rather than waiting for a market signal that private capital, left alone, has shown it won’t always send in time.
The counter-argument is cost of capital. Private developers who build fast and cheap on batteries and wind, with the CIS smoothing the revenue risk, have genuinely delivered more megawatts per dollar over the past three years than most state utilities have managed on anything long-duration. AEMO’s own generation information page tracks committed and anticipated projects by proponent, and the private column is longer, even if the public column carries the heavier assets. The AER’s regulatory determinations, which set the allowed returns on transmission regardless of ownership, are the document that actually decides whether any of this is affordable, and they’re published on the AER’s website for anyone who wants to check the numbers themselves rather than take a press release’s word for it.
A line that doesn’t get drawn enough #
Where I think both sides of this debate get lazy is treating ownership as the variable that matters, when the variable that actually matters is asset class. Batteries, wind and rooftop solar don’t need public ownership to get built; they need a market signal and a contract, and private capital has proven it’ll turn up for both. Pumped hydro, interstate transmission and anything requiring genuine long-term patience need either public ownership or a regulated return so generous it amounts to the same thing dressed differently. Pretending otherwise, from either direction, is mostly politics wearing an engineering costume.
So the verdict, for what it’s worth from someone who watches this argument happen in parliament and in investor decks in roughly equal measure: public ownership wins on patience, private capital wins on speed, and the NEM needs both running at once rather than a government picking one team and benching the other. The risk isn’t choosing the wrong model. It’s assuming one model can do the whole job alone, the way a captain sometimes leaves a bowler on too long because the one over that worked has fooled him into thinking the pitch has changed. It hasn’t. The pitch is the same for both sides, generation or firming, public or private. Only the patience required differs.
– Marcus Wren, Editor
Image: Queensland State Archives from Runcorn, Queensland, Australi (Public domain) via Wikimedia Commons