Australia is quickly becoming a global heavyweight in grid-scale energy storage, with utility batteries now forming the country’s third-largest clean energy investment market after China and the United States. Falling technology costs and improving project economics are drawing in both domestic power companies and international investors and are accelerating a shift that only a few years ago looked far off. At the same time, new gas-fired generation is barely growing, even though gas still plays a crucial back-up role when wind and solar output drops.
Energy analysts now expect battery capacity connected to the grid to overtake total gas generation capacity by around 2027, based on projects already under construction or close to shovel-ready. These big batteries are designed to soak up cheap daytime solar and wind that would otherwise go to waste and release it later when demand spikes, usually in the early evening. That arbitrage, buying power low and selling high, is what makes many of these projects commercially viable. Official connection pipelines show batteries now represent roughly half of all new projects seeking to plug into the grid, while new gas plant proposals remain subdued.
The momentum behind storage looks like one of the few clear wins in the national clean energy transition, which has otherwise been slowed by cost overruns and delays in new wind farms and transmission lines. Coal stations that were slated for earlier closure, including major plants in New South Wales, are being kept online for longer because replacement renewables and storage have not arrived fast enough. Even so, data for 2025 shows power supplied by large batteries up well over 100% year-on-year from a small base, while gas generation has fallen by more than 10%, which signals how quickly evening supply patterns are changing.
Looking ahead, the growing fleet of batteries seems set to challenge gas generators’ historical dominance of peak pricing and could put downward pressure on wholesale electricity costs during the busiest hours. However, much depends on how widely battery ownership is spread. If a handful of big energy companies control most of the assets, competition may be weaker and price benefits more limited. Analysts also stress that storage does not fully replace gas because batteries typically cover a few hours, while gas remains essential as a backup in rare but severe events, such as long cold snaps when demand stays high for many hours. The future grid therefore looks like one where gas runs less often but remains strategically important and where the balance between cheaper power and market concentration remains an open question.
