Energy storage is no longer simply about holding excess electricity until it is needed. As Australia replaces large coal-fired generators with wind, solar and other inverter-based resources, batteries are being asked to do something more fundamental: help keep the power system stable, secure and responsive.
This changes the storage conversation. The question is no longer just how many megawatt-hours a battery can shift from the middle of the day into the evening peak. It is also what services the asset can provide in the fractions of a second when voltage or frequency moves, a large generator trips, or a major industrial load changes suddenly.
This shift is at the centre of the latest episode of Powering What’s Next, a podcast series produced by InnovationAus.com in partnership with GE Vernova. Anna Collyer, chair of the Australian Energy Market Commission (AEMC), and Nigel Went, GE Vernova’s Asia region leader for Power Conversion, joined Corrie McLeod to examine how storage is moving from grid backup to backbone.
At utility scale, the value of storage is also expanding beyond energy shifting. Mr Went said advances in grid-forming inverters and control systems allow battery energy storage systems to respond almost instantly to changes in generation or demand, helping maintain voltage and frequency and strengthen the grid.
That capability matters because the retiring coal and gas plants Australia has historically relied on do more than produce electricity. Their large rotating machines provide inertia and other system-security services as an inherent part of their operation. Wind, solar and batteries connect through inverters, so those services need to be deliberately designed, procured and verified.
“The value of the storage is actually increasing because of this flexibility, not simply just because of its energy,” Mr Went said.
This is one reason the transition cannot be reduced to a contest between individual technologies. Synchronous condensers can provide mechanical inertia and system strength. Grid-forming batteries can deliver rapid electronic responses and a growing range of services. Hybrid systems may combine both, tailored to the needs of a particular part of the network.
Mr Went said every grid and every network node have different requirements. Some will continue to need synchronous equipment, including for fault current and short-circuit performance, while battery systems may replace or complement that equipment elsewhere.
“At the end of the day, it’s going to be a balance,” he said. “We also see opportunities for hybrid solutions between synchronous condensers and batteries.”
For Ms Collyer, the transformation overturns one of the assumptions on which Australia’s electricity market was built. When she began advising the energy sector, electricity was an essential service that had to be balanced in real time and, in practical terms, could not be stored.
“That whole ‘can’t store it’ is so fundamentally changed now that it completely transforms what we can do in the electricity sector,” she said.
The rules governing the wholesale and retail electricity and gas markets were designed in the 1990s for a very different system. The AEMC is now updating these settings as ageing coal generation retires, renewable generation expands and customers become active participants through rooftop solar, home batteries and electric vehicles.
The opportunity is to use storage at every scale to support affordable, reliable and secure energy. A household battery can lower its owner’s bill by storing daytime solar for the evening. Aggregated with other customer resources, it can also support the wholesale market, provide network services and contribute to system security.
Australia’s rooftop solar success makes this flexibility particularly valuable. Solar generation has pushed demand from the grid down in the middle of the day, before it rises sharply as the sun sets and households return to peak consumption. This pattern became known as the duck curve.
Home battery uptake is beginning to reshape it. Ms Collyer said the curve is flattening enough that she had recently heard it described as a “platypus”. Behind the light-hearted label is a serious system benefit: using more solar when it is available can reduce the scale of utility infrastructure needed to meet the evening peak.
The design challenge is to make participation worthwhile without making it complicated for customers. Most households do not want to trade system-security services themselves – but an intermediary can combine many small assets, automate when they charge or discharge, and share the resulting value with customers.
“Our customer resources are an incredible asset to us,” Ms Collyer said. The market framework should make it simple for households to save money while also helping lower costs across the wider system.
The policy and regulatory framework is evolving around the same problem. Under the old system, security services arrived with synchronous generation and did not always need their own market or procurement mechanism. The AEMC and other market bodies have spent years developing ways to define, value and obtain those services as the generation mix changes.
Ms Collyer pointed to the extension of the Eraring Power Station as an example of how system security has moved into public conversation. Ensuring enough electricity is available is only part of reliability; the system also needs technical characteristics that keep it operating safely and avoid blackouts.
Networks are therefore being encouraged to consider contracting with batteries and other new assets, rather than defaulting to a single conventional solution. But confidence must be earned – network businesses and the Australian Energy Market Operator need evidence that new technologies will perform as required under real operating conditions.
“The safety and security of the system is absolutely paramount,” Ms Collyer said. “We are naturally conservative, but we have been trying to create frameworks that can help push the boundaries towards exploring this new technology.”
This careful experimentation is increasingly important as new electricity demand arrives. Data centres and AI infrastructure were a recurring theme in the discussion because they can create very large loads with rapid and potentially volatile changes in consumption.
Mr Went said storage can protect an industrial customer from disturbances on the grid while also buffering the grid from the customer’s own demand profile. GE Vernova is working with customers on utility-scale storage and medium-voltage uninterruptible power supply systems that can smooth these loads and make grid connections easier to secure.
The investment behind data centres could also accelerate innovation. Operators want to build quickly and have a strong commercial incentive to solve connection, reliability and power-quality constraints. That can bring new storage and power-conversion technologies into the market faster, provided costs and risks are allocated fairly.
Ms Collyer said data centres add complexity to a transition already balancing retiring generation, renewable investment and network construction. But they can also create a productive match between developers seeking long-term customers and data centre operators seeking reliable, firmed supply.
“We see this opportunity for almost matchmaking between developers who are looking to underwrite their projects, and data centre operators who want to ensure they’ve got sufficient supply to support their needs,” she said.
Over the next 12 months, both speakers expect the storage buildout to continue. More battery projects will connect to the National Electricity Market, synchronous condensers will remain part of the system-strength response, and a growing share of batteries will be deployed with grid-forming capability.
Policy settings will matter just as much as technology. Ms Collyer said continued support for new renewable developments and investor confidence will be critical as the initial phase of the Commonwealth’s Capacity Investment Scheme advances and the next set of reforms is developed.
The larger lesson is that storage has become part of the architecture of the power system. Its role now extends from household bills to wholesale prices, from renewable integration to industrial connections, and from energy supply to the technical services that keep the grid secure.
Batteries will not remove the need for every other form of firming or system-strength technology – but as their controls become more capable and deployment accelerates, they can do far more than wait in reserve for the moment the grid runs short.
Australia’s storage task is therefore not simply to build more capacity. It is to recognise, test and reward the full range of services storage can provide, then combine those capabilities with the right synchronous, network and market solutions for each location.
That is what moving from backup to backbone really means: storage becoming an active part of how Australia balances, strengthens and ultimately redesigns its electricity system.
Powering What’s Next is a sponsored podcast series produced by InnovationAus.com in collaboration with GE Vernova.
Statements attributed to GE Vernova representatives may include forward-looking statements. GE Vernova’s caution concerning these statements is available here. The GE Vernova logo is a registered trademark of GE Vernova Inc. GE Vernova’s terms of use around trademarks and copyright are available here.
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