Big batteries are now outcompeting gas in the grid – and gas-rich Western Australia is at the forefront

Australia’s electricity grids are undergoing a profound transformation. Solar and wind have provided 99% of new generating capacity since 2015. Last month, renewables hit parity^[1] with fossil fuels for the first time.

But there’s a lesser-known part to the story. Renewable output varies, which means they need to be backed up. For years, authorities have predicted gas power stations would remain necessary to back up or “firm^[2]” renewables. But increasingly, this work is being done instead by large-scale batteries.

Grid batteries have rapidly moved from a supporting role to prime time by firming renewables, ramping up output very rapidly and boosting system security by ensuring a stable voltage. Battery capacity in the pipeline has soared^[3] from 3 gigawatts in 2022 to 26GW in 2025 in Australia’s main power grid, the National Electricity Market.

Batteries can soak up a glut of solar and release it back to the grid during evenings. It’s nowhere more visible than in isolated Western Australia, which has its own separate power grids.

In recent months, renewables (largely solar) have begun supplying^[4] more than half (55%) of the electricity to WA’s Wholesale Electricity Market. Batteries are increasingly overtaking large-scale solar^[5] and gas generation^[6] in meeting peak demand.

As grid operators grow more comfortable with the capabilities of grid batteries, it will become less necessary to burn gas for power. One of the world’s top gas exporters is now demonstrating how to avoid using this fossil fuel.

Batteries coming of age

The latest plans^[7] from the Australian Energy Market Operator show battery storage is anticipated to keep growing sharply.

The market operator anticipates Australia will need 14GW of gas power capacity by 2050. Gas will shift from firing up at times of peak demand to act largely as a backup for renewables and storage.

But even this role isn’t certain. The plunging cost of grid-scale batteries means gas and even hydropower will struggle to compete over the next ten years. Other analysts have come to similar conclusions^[8].

Western Australia, global testbed

WA has taken up batteries at remarkable speed. Major new systems have been deployed in Kwinana^[9], an industrial area of Perth, and the coal town of Collie^[10]. Collectively, these grid batteries have more than 5 gigawatt-hours of storage.

These batteries supplied more than 20% of evening peak demand^[11] and surpassing gas generation sources in a recent week.

Throughout November, renewables provided 55% of power^[12] to WA’s main grid, well above the National Energy Market’s 50%. What’s impressive is this was achieved without using hydropower or drawing power from other states. The system relied on rooftop solar, solar farms, wind and batteries.

Overseas, states such as California have been using batteries with significant success^[14]. And, WA is showing how it can be done without interconnections.

Records tumbled throughout November, including periods where wind and solar met 100% of demand in WA’s main grid. Batteries meant some coal and gas^[15] generators kept running to provide grid services but not power. As grid batteries expand, this won’t be necessary^[16].

Coal is already on life support in Australia. And, in this fastest energy transformation in human history^[17], WA is showing that gas, too, will pass and be replaced.

Batteries bypassing gas in the main grid

In November, the National Electricity Market also passed a major milestone when large batteries put more power into the grid than gas peaker plants^[18] for the first time.

Industry analysts now expect batteries to become the primary tool^[19] to firm renewables on Australia’s main grid within a few years. The Eraring, Mortlake and Melbourne Renewable Energy Hub grid batteries will soon come online. Investment in grid batteries has surged from A$100 million to billions a year^[20].

The federal government’s new home battery subsidy scheme has been wildly popular. Around 146,000 have now been installed, though there are questions^[21] about cost blowout and the size of batteries installed.

Distributed energy storage such as home batteries^[22] and electric vehicle batteries could supply more overall storage than grid-scale batteries before 2030.

The facts on the ground are changing quicker than many policymakers anticipated.

The heartbeat of the grid

One challenge for clean grids is how to replace the spinning turbines of coal and gas plants, which have stabilised electricity voltage for decades. Solar and wind can’t easily provide the vital inertia^[23] these spinning machines provide.

It turns out big batteries can provide this service without spinning turbines^[24]. In recent months, there’s been debate^[25] over whether big batteries will be allowed to stabilise the grid – essentially, giving the grid its heartbeat.

Australia’s energy market operator anticipates an increasing role for batteries to do this work too by pairing batteries with grid-forming inverters^[26] and “virtual synchronous machines^[27]” to ensure electricity is delivered at the grid requirements for frequency and voltage.

Real-world applications in Australia and elsewhere show batteries can do the job more precisely and efficiently^[28] than fossil fuel plants.

The question now is how quickly market rules and grid standards can be updated to allow batteries and inverters to do this at scale^[29].

Of course, batteries aren’t a silver bullet. As the market operator’s plan^[30] for the electricity system makes clear, the optimal future grid will combine grid-scale batteries, pumped hydro, management of electricity demand, and widespread rooftop solar, home batteries and EV batteries.

Finding ways to coordinate use of Australia’s rapidly growing^[31] household energy storage capacity and tapping into EV batteries through V2G technology^[32] could avoid overspending on grid-scale storage.

A farewell to gas?

As battery storage grows, the need for a gas backup for the grid will shrink.

Expensive gas peaking plants are already being outcompeted in Australia’s main grid, while WA’s enthusiastic battery takeup is showing how isolated grids can rely more and more on solar, wind and storage.

References

1. ^{^} hit parity (www.reuters.com)
2. ^{^} firm (theconversation.com)
3. ^{^} has soared (www.aemo.com.au)
4. ^{^} begun supplying (reneweconomy.com.au)
5. ^{^} overtaking large-scale solar (reneweconomy.com.au)
6. ^{^} gas generation (reneweconomy.com.au)
7. ^{^} latest plans (www.aemo.com.au)
8. ^{^} similar conclusions (theenergy.co)
9. ^{^} Kwinana (www.synergy.net.au)
10. ^{^} Collie (colliebattery.com.au)
11. ^{^} evening peak demand (reneweconomy.com.au)
12. ^{^} 55% of power (reneweconomy.com.au)
13. ^{^} Neoen (colliebattery.com.au)
14. ^{^} significant success (theconversation.com)
15. ^{^} coal and gas (reneweconomy.com.au)
16. ^{^} won’t be necessary (reneweconomy.com.au)
17. ^{^} fastest energy transformation in human history (theconversation.com)
18. ^{^} gas peaker plants (reneweconomy.com.au)
19. ^{^} primary tool (reneweconomy.com.au)
20. ^{^} billions a year (www.theguardian.com)
21. ^{^} questions (theconversation.com)
22. ^{^} home batteries (www.aemo.com.au)
23. ^{^} inertia (www.powermag.com)
24. ^{^} spinning turbines (repositpower.com)
25. ^{^} been debate (reneweconomy.com.au)
26. ^{^} grid-forming inverters (arena.gov.au)
27. ^{^} virtual synchronous machines (doi.org)
28. ^{^} precisely and efficiently (docs.openelectricity.org.au)
29. ^{^} at scale (reneweconomy.com.au)
30. ^{^} plan (www.aemo.com.au)
31. ^{^} rapidly growing (reneweconomy.com.au)
32. ^{^} V2G technology (arena.gov.au)