Every New NEM Solar Project Now Comes With a Battery
Every New NEM Solar Project Now Comes With a Battery
Australia's 100% solar-battery co-location rate for 2027-28 NEM commitments marks a structural shift in how storage is priced into grid investment.
Every gigawatt of utility-scale solar contracted for Australia's National Electricity Market in 2027 and 2028 now comes bundled with a battery energy storage system, according to data published by US-based storage specialist Fluence.4 The 100 percent co-location rate marks a structural inflection in how developers and financiers are treating grid-scale renewables in the country's eastern electricity market.
That sits on top of 2025 figures that were already dramatic. The Clean Energy Council reported a record 2 gigawatts of new big battery capacity was added nationally last year, a 233 percent increase on 2024.1 Australia has become the third-largest utility-scale battery market globally, behind only China and the United States.
The deal pipeline points to continued acceleration. The Council tallied 4.3 gigawatts and 13.5 gigawatt-hours of capacity as financially committed over 2025, worth $4.8 billion of investment, up 67 percent on the 2024 level.1 At those volumes, batteries are no longer a complementary technology. They are a standalone investment thesis.
Individual projects illustrate the scale shift. AGL Energy commissioned the 500-megawatt, 1000-megawatt-hour Liddell Battery on the site of the retired Liddell coal station in New South Wales, though the first 250-megawatt stage began commissioning at the end of 2024.1 In Victoria, the 600-megawatt, 1600-megawatt-hour first stage of the Melbourne Renewable Energy Hub, developed by Equis and the state-owned State Energy Corporation, was another major contributor to the national fleet. Akaysha Energy's 55-megawatt, 298-megawatt-hour Ulinda Park project in Queensland reached the NEM by December.1
AEMO's chief executive was direct about the implications at Australian Energy Week in Melbourne on Wednesday (2026-06-03), saying batteries at every scale are "fundamentally changing" the electricity system and the outlook for AEMO's Integrated System Plan.3 That blueprint drives network investment decisions across the NEM; a version premised on a rapidly expanding battery fleet will look materially different from one planned around dispatchable gas.
The competitive tension with gas is already visible. South Australia spot power reached $491 per megawatt-hour as of Tuesday (2026-06-23), with Wallumbilla gas at $5.99 per gigajoule.3 As the Clean Energy Council noted, batteries are increasingly competing with each other rather than with gas peakers — a dynamic that compresses the revenue stacks underpinning early projects but has not slowed the pipeline.
Capital has been moving in the opposite direction in Spain. CVC Capital Partners sold its 13.8 percent stake in Naturgy for around €4 billion ($4.65 billion) via an accelerated Goldman Sachs bookbuild.2 That followed BlackRock's exit from an 11.4 percent position in the Spanish utility in March 2026, a transaction worth €2.79 billion handled by J.P. Morgan and Goldman Sachs.2 In total, two of the largest financial sponsors in Naturgy have unwound roughly a quarter of the company in the space of a few months.
The contrast with Australia is instructive. Large financial investors are reducing exposure to integrated Spanish gas and power infrastructure at the same time that capital in Australia is underwriting new grid technology at a pace that has lifted the country from peripheral to third-ranked in global storage within two years. AUD/USD at $0.69 keeps Australian project costs lower in dollar terms, a marginal tailwind for international sponsors sourcing capital in harder currencies.4
The signal worth tracking is whether the battery-solar pairing rate for 2027-28 holds as interest rates and construction costs evolve, or whether developers begin to unbundle when grid revenue stacks prove thinner than modelled. AEMO's revised Integrated System Plan will show whether the operator's planning assumptions have caught up with the pace of commitments already on the books.3