Batteries sweep South Australia firming tender, shutting out gas
Every slot in a South Australia grid firming tender open to gas went to large-scale batteries, underscoring how fast the economics have shifted against peakers.
Every project selected in South Australia's grid firming tender was a large-scale battery. The state government announced the winners on Friday (2026-05-29), and gas generators, despite being eligible to bid, failed to claim a single slot. Renewables already supply more than 70 per cent of the state's electricity, and the tender was designed to backstop that share with dispatchable capacity — but the outcome made clear which technology is now winning that work.2
Batteries won on cost and speed. Traders familiar with the process said battery offers undercut gas peakers on a levelised basis and could be built in months rather than years. The winning projects will deliver a combined 300 MW of four-hour storage, enough to cover the evening peak without running a gas turbine.2
Gas had long been considered the natural firmer for a grid with high renewables penetration. The Australian Energy Market Operator's updated system plan, published in February 2023, warned that supply gaps could open as ageing coal plants retire faster than new dispatchable capacity comes online.6 The South Australia tender result suggests that risk is increasingly being answered by batteries rather than gas.
The trend has been building. Federal energy minister Chris Westerman has noted that large-scale batteries were delivering more than 1,000 MW into the evening peak on average over the first quarter of 2026, in his words "reducing the need for more expensive peaking gas generation." That figure gives some measure of how quickly the battery fleet has scaled into the role gas peakers were expected to fill.4
On Wednesday (2026-06-24), the federal government announced the winners of CIS Tender 8, a storage-only auction targeting 4 GW of four-hour equivalent capacity across the National Electricity Market. Fifteen large-scale battery projects were named, nearly half of them in Queensland. Projects include the 375 MW Wimpole Battery in Victoria's Bunyip North and the 350 MW Grahams battery in Queensland's Western Downs region.4
Westerman used that announcement to launch CIS Tender 10, which targets another 4 GW and 16 GWh and is open to bids until 18 August 2026. "We've got the best sun and wind in the world, and we're using our sovereign renewables, stored in batteries, to shield our grid from global price shocks," he said.4
The economics behind that claim are visible in price data. Australia's renewable buildout has helped decouple domestic power prices from the global surge driven by the conflict in Iran, with batteries playing a central role in absorbing peak demand that would previously have been met by gas-fired generation.3 South Australia's spot price on Monday (2026-07-20) was trading at A$125.56/MWh — a level that reflects a grid where batteries are already compressing the peaks gas peakers would have captured.1
The gas industry argues it retains a role, particularly as a hedge against multi-day generation shortfalls. During the week of 2026-06-22, Australia's National Electricity Market experienced a prolonged wind drought that, combined with low winter solar output, left the grid overly dependent on thermal generation.5 Operators ran battery assets hard through the evening peaks, but some traders noted that sustained multi-day shortfalls expose a gap that four-hour storage systems cannot bridge on their own.
The unresolved risk is duration. The battery projects selected in South Australia's tender, and the bulk of those named in CIS Tender 8, are four-hour systems — standard for this wave of buildout, sized for a daily peak rather than a week-long trough. The June wind drought was a relatively contained event. A three-day winter calm across multiple NEM regions would test whether the fleet's aggregate duration is sufficient without triggering emergency reserves or reverting to gas.5
The pipeline of peaker projects shelved or withdrawn ahead of the South Australia tender had been viewed as a hedge precisely against that scenario. With batteries continuing to win the available off-take, those projects will find it harder to reach final investment decision. Whether the next CIS tender round — with bids due by 18 August 2026 — draws longer-duration storage proposals, or simply more four-hour systems, will indicate whether the market is pricing the duration gap or assuming it away.4