AEMO flags 2.8 GW of price-responsive home batteries as NEM enters new volatility regime
Australia's grid operator says behind-the-meter batteries now match Eraring's capacity, changing how the NEM prices evening peaks and gas peakers.
Australia's grid operator has counted 2.8 GW of behind-the-meter batteries that respond to price signals but sit outside central dispatch — a stock of flexible capacity equivalent to Eraring Power Station that is now changing how the National Electricity Market prices its evening peaks.2
The figure, flagged in AEMO's reporting through mid-2026, matters because it tracks a market in transition: utility-scale batteries added at record pace in 2025 while the economics of gas peakers deteriorate. The Clean Energy Council's tally showed Australia became the world's third-largest utility-scale battery market last year, behind only China and the US, after a record 2 GW of new capacity came online, a 233 per cent increase on 2024.1
That build-out is not evenly distributed across the grid. The AGL Energy-owned Liddell Battery, 500 MW and 1,000 MWh at full scale, began commissioning its first 250 MW/500 MWh stage at the former coal site. Equis and Victoria's State Energy Corporation pushed the first 600 MW/1,600 MWh stage of the Melbourne Renewable Energy Hub through development. Akaysha Energy's Ulinda Park battery near Millmerran, Queensland, had its 55 MW/298 MWh first phase trading on the NEM by December.1
Capital is still flowing in. The CEC report counted another 4.3 GW and 13.5 GWh of big battery capacity financially committed over the year, worth $4.8 billion of investment, a 67 per cent increase on 2024 levels.1
The AEMO numbers and the CEC tally point in the same direction: batteries are starting to compete more often with each other rather than with gas peakers. The CEC expects that trend to continue.1
That competition is showing up in AEMO's analysis of volatility patterns. Intra-day price swings are compressing in some periods, according to recent industry conference presentations, while inter-day and event-driven volatility is becoming more important.2
The driver of that event-driven volatility is increasingly visible in the NEM's demand curve. Average data centre demand through Q1 of this year was nearly 600 MW, AEMO's CEO told Australian Energy Week in June (2026-06-11), and 11 data centres totalling 5.4 GW of ultimate load were working through transmission connection approvals.3
That load is landing in a grid where the evening remains the biggest operational problem. Solar generation peaks around midday, and as it fades, the power system must ramp quickly through the late afternoon and into the evening. The duck curve is not new, but the shape is getting more pronounced as rooftop solar grows and data centres add baseload demand.5
Gas-fired generation is bearing the cost of balancing that ramp. The CSIRO's GenCost report, published in July (2026-07-15), found data centre demand is driving up the costs of gas-fired electricity generation even as batteries become the preferred technology for flexible supply.4
AEMO's own planning documents have been slow to capture the demand-side shift. The Electricity Statement of Opportunities and Gas Statement of Opportunities have considered demand-side resources "more and more over time", but the primary question for those planning frameworks remains one of timing: how fast batteries substitute for gas peakers, and how much new interconnection and firming the market actually needs.3
The price signal is already visible. Wallumbilla Gas, the Queensland benchmark, settled at A$10.55/GJ as of Sunday (2026-08-09), while the South Australia day-ahead power price printed A$14.19/MWh for Monday (2026-08-10) delivery. Gas is still setting the marginal cost in peak periods. Neither reading is a crash, but both reflect a market where batteries are absorbing the sharpest spikes.2
Analysts who track the NEM's investment cycle are watching one thing: whether the next wave of battery projects, the 4.3 GW financially committed in 2025, lands on schedule through 2027 and 2028.1
If those projects come online as planned, gas peakers that currently set prices for a few hundred hours a year may find their revenue window narrowing faster than their owners modelled. If they slip, the same data centre load that is driving the build-out will be bidding against households in a tighter market. South Australia's day-ahead price on Sunday (2026-08-09) at A$14.19/MWh suggests ample battery capacity in that region; Queensland and New South Wales, where the data centre load is concentrated, have not yet passed that test.3,1