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Energy Storage: A Cornerstone of Australia's Future Grid

Nov 9

2 min read

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The Australian Energy Regulator (AER) has emphasized that expanding energy storage capacity is critical to managing the increasing demand and variability in Australia’s National Electricity Market (NEM). With coal-fired power gradually exiting the market, energy storage will play a pivotal role in capturing renewable energy, thus avoiding curtailment and helping stabilize electricity prices for households.


Energy Storage: A Cornerstone of Australia's Future Grid

Battery Energy Storage Systems on the Rise

Battery energy storage systems (BESS) have become significant players in the NEM, particularly in frequency control markets. While this can limit their availability for energy-only markets, their success continues to drive global investment. In 2023-24, BESS contributed 2GW of additional capacity, although it accounted for less than 0.5% of total generation output. Nonetheless, the AER forecasts rapid growth in storage capacity, with a peak of 22GW expected by 2027-28.


Waratah Super Battery to Bolster NEM Capacity

One major addition to the grid is the Waratah Super Battery, set to become the largest BESS in the NEM, with an impressive capacity of 850MW/1,680MWh. This development signals a new era for energy storage in Australia and marks a significant step toward achieving renewable energy goals.


Renewable Investments Reach New Heights

Investment levels in renewable energy and storage solutions continue to surge. The year 2024-25 is anticipated to be the most significant yet, with a major influx of grid-scale solar PV, wind, and battery storage systems added to the market since 2017-18. This growth reflects Australia’s accelerating shift toward cleaner energy sources.


Renewables and Storage to Replace Fossil Fuels

As the energy landscape shifts, traditional fossil fuel generators are scheduled for retirement, with 6,250MW expected to exit the NEM within five years. The AER highlights the pressing need for additional renewable energy sources and dispatchable gener