Australia’s battery build outpaces policy as AEMO sees 5x renewables need by 2050
Record 2 GW of big battery capacity added in 2025 as grid strains under maturing gas supply.
Australia added a record 2 gigawatts of utility-scale battery capacity in 2025, a 233 per cent jump from the prior year, according to the Clean Energy Council’s annual tally published last month2. That made the country the third-largest big battery market globally, trailing only China and the United States.
The pace matters because the Australian Energy Market Operator’s 2026 Integrated System Plan, released on Monday (2026-06-29), calls for nearly 120 GW of utility-scale wind and solar by 2050 — roughly five times the current 23 GW5. Batteries are the bridge between intermittent renewable generation and the grid’s need for dispatchable power, especially as east coast gas supply tightens.
Gas has been Australia’s conundrum for years. A Wood Mackenzie analysis from May (2026-05-19) warned that a combination of rising seasonal demand and maturing supply sources means the east coast needs significant new reserves online by the mid-2020s1. The pandemic and the 2020 oil price crash caused short-term delays to new supply development, with APLNG announcing around US$250 million of capex cuts that year and Beach Energy delaying the Otway development by twelve months1.
Batteries are stepping into that gap. The CEC report notes that another 4.3 GW and 13.5 GWh of big battery capacity was financially committed over 2025, representing $4.8 billion of investment — a 67 per cent increase on 2024 levels2. The report’s authors said big batteries are starting to compete more often with each other rather than with gas peakers2.
The largest single contributor to the national battery fleet in 2025 was the 600 MW, 1600 MWh first stage of the Melbourne Renewable Energy Hub, jointly developed by Equis and the Victoria government-owned State Energy Corporation2. AGL Energy’s 500 MW, 1000 MWh Liddell Battery also began its commissioning process, though only the first 250 MW and 500 MWh stage was technically active by year-end2. In Queensland, Akaysha Energy’s Ulinda Park battery near Millmerran saw its 55 MW, 298 MWh first phase operational and trading on the NEM by December2.
Battery storage pricing globally has become a factor. The CEC data shows $4.8 billion committed for 4.3 GW, implying roughly $1,116 per kW installed, though duration varies sharply between projects.
The trend toward hybrid projects — pairing solar farms with battery storage behind a shared grid connection — is accelerating. US-based Fluence said the Australian market is emerging as a test bed for such configurations, serving as a blueprint for global energy transition projects4.
Yet the investment picture is not uniform. Across the globe, private equity is rotating out of European utility stakes. CVC Capital Partners sold its complete 13.8 per cent stake in Naturgy in a €4 billion deal executed through Goldman Sachs via an accelerated bookbuilding process3. The sale followed BlackRock divesting its remaining 11.4 per cent Naturgy stake in March (2026-03) for €2.79 billion3. The CVC bookbuilding set the share price at €28.55 each, a 4.64 per cent discount3.
The Wallumbilla Gas spot price stood at A$11.36/GJ on Monday (2026-07-13), flat on the day [LIVE_PRICES]. The South Australia day-ahead power price was A$55.67/MWh [LIVE_PRICES]. Neither level signals acute short-term stress.
Traders should watch the forward commissioning calendar for the remaining stages of Liddell and MREH. The CEC tally shows 4.3 GW of financially committed but not yet built capacity. If construction timelines slip, the gap between retiring coal plant and new firm capacity widens — and the pricing spread between peak and off-peak NEM electricity will widen with it.