Battery Prices in Australia Drop 85% in a Year

Across Australia's National Electricity Market (NEM), battery prices have dropped by 85% over the past year, averaging AU$51/MWh (US$35/MWh). This is according to the Quarterly Energy Dynamics report published by the Australian Energy Market Operator (AEMO). The report shows that grid-scale battery storage capacity in the NEM has exceeded 9,000 MW for the first time.

Between the end of Q2 2025 and the end of Q2 2026, 4,640 MW/12,353 MWh of battery storage systems were commissioned. These include the 300 MW/1,200 MWh Stanwell BESS and 222 MW/593 MWh Woolooga BESS in Queensland, and the 240 MW/590 MWh Mornington BESS in Victoria and the 180 MW/360 MWh Broadsound Energy Park in Queensland.

The growing scale of battery storage systems is now visible in market outcomes. In Q2 2026, average battery discharge reached 476 MW, nearly triple the 162 MW recorded in the same period the previous year. Average charging increased by 182% to 574 MW.

Charging activity was concentrated between 10:00 and 16:00, when solar energy production is typically at its highest and prices are usually at their lowest. Charging during these hours reached 1,009 MW, 211% above the previous year's level. Evening discharge between 16:00 and 21:00 increased by 228% to 1,066 MW.

Battery storage systems have become the most frequently used technology for setting prices in the NEM. In Q2 2026, battery storage systems were used to set prices in 36% of pricing intervals, up from 17% in the same period the previous year.

During the evening peak, battery discharge was used to set prices in 46% of pricing intervals, up from 24% the previous year. This is starting to displace gas and hydroelectric power plants.

Gas power plants produced an average of 1,050 MW in Q2 2026, the lowest Q2 production since 2003. During the evening peak, gas power plant output was 1,441 MW below the previous year's level.

This has led to a 47% drop in average wholesale spot prices across the NEM, to AU$74/MWh, the lowest Q2 average since 2020. Increased renewable energy production and lower evening peak demand also contributed to the decline. Renewables increased their share of production in the NEM to 42.1%. Wind energy production increased by 20% to 4,198 MW, while coal production fell by 5% to 13,158 MW.

Queensland set a new record for wind energy production, with average output increasing by 80% to 842 MW.

Adoption of home batteries also accelerated this quarter, thanks in part to the Australian government's cheaper home batteries program. The average battery capacity per household reached 11,321 MWh by the end of Q2 2026, a 41% increase from the end of Q1 2026.

Source: Energy Storage News