Batteries now meet almost half of the grid’s dispatchable power needs during hours of highest demand
Gas-fired power generation during high-demand evening hours across Australia dropped by nearly 70% over the preceding year, driven by a rapid deployment of grid-scale and residential energy storage systems. Findings from an EnergyEdge analysis indicate that gas output during the peak window between 5 p.m. and 8 p.m. decreased by 67% in the year leading up to August.
The decline followed the rollout of large-scale battery facilities and the installation of 500,000 residential batteries facilitated through government subsidy initiatives. EnergyEdge managing director Josh Stabler noted that the adoption rate of battery technology in the country surpasses that of any prior electricity asset, outpacing both wind and solar deployment.
Data from the report showed that storage systems accounted for 49% of the grid's dispatchable electricity demand during August evenings, a significant increase from 0.4% in 2020. Conversely, gas contributions dropped from 65.9% to 20.6% over the same timeframe, contributing to a reduction in wholesale electricity prices.
The Australian Energy Market Operator reported similar trends in quarterly figures covering April through June, noting that average gas generation fell to its lowest second-quarter level in over twenty years. The reduction was observed across all regions, with the most pronounced drops occurring during evening peak periods.
Alison Reeve, energy and climate change program director at the Grattan Institute, explained that utility-scale batteries capture excess solar energy during midday hours to supply the grid during peak demand, flattening the daily load curve and lowering market volatility. While lower prices benefit consumers in the short term, declining demand creates profitability challenges for gas assets needed during extended low-generation winter conditions.
The Australian Energy Market Operator's 20-year Integrated System Plan projects that gas will shift toward a strategic backup function providing system security, particularly in southern states during winter months when shorter daylight hours limit solar generation. Industry experts emphasize that acknowledging this changing operational profile will be critical for managing future costs and infrastructure requirements.
Originally reported by The Guardian on Sep 15, 2026.
