Batteries are taking over Australia's evening peak

 From Gavin Mooney

Just one year ago, peaking gas was still doing much of the heavy lifting during Australia's evening peak. Today, that is no longer the case.

The chart below compares average daily dispatch profiles across Australia's main grid (the NEM) in April 2025 and April 2026.

The change in just one year is remarkable.

While peaking gas generation has fallen sharply, battery discharge has surged and is now dominating the evening peak.

This isn't just about more batteries being installed. It's also about batteries performing one of the grid's most valuable jobs: supplying electricity during the high-demand evening period when solar output falls away.

A few things stand out:

✅ Battery discharge in Q1 2026 was around 3x higher than a year earlier
✅ Batteries now set wholesale electricity prices roughly one-third of the time
✅ Wholesale electricity prices were 12% lower in Q1 - largely due to the influx of batteries

Perhaps most strikingly, battery discharge across the NEM has now overtaken peaking gas generation – and it appears on track to overtake mid-merit gas in the next year as well.

This shift is being primarily driven by economics.

Battery costs have fallen dramatically, projects have become larger and the growing spread between low daytime prices and higher evening prices increasingly favours battery storage.

For decades, peaking gas plants were the default solution for the evening peak.

Increasingly, that role is being performed by batteries instead.

Australia now has more battery storage capacity per capita than any other country in the world - more than double the second-ranked country.

Even in absolute terms, only China and the US have more installed battery capacity. That's pretty remarkable for a country of just 27 million people.

The Oz government has a program to subsidise home batteries, and this has helped drive the huge surge in battery installations.  It's also driving down wholesale electricity prices, which of course was the intent.  Australia achieved widespread penetration of household solar by generous subsidies (now mostly wound down) and the same looks set to happen in storage.  Wind + solar + batteries is producing ever cheaper electricity, and this will drive fossil fuels out of the grid.