Australia has reached a turning point in its energy industry, with the use of batteries as a source of energy supply during peak times becoming a reality. Research conducted by CSIRO and the Australian Energy Market Operator shows that four-hour battery systems now outperform gas turbines in terms of efficiency.
Economic Benefits of Battery Systems
Batteries are rapidly capturing the peak energy supply market due to lower construction costs. In the past, gas turbines dominated this role due to their low construction costs and ability to operate during peak times. However, batteries can now store energy during low-price periods and sell it during peak times without being dependent on fuel costs. With the decreasing production costs of batteries, these systems are recognized as an attractive option for peak energy supply.
Challenges and Changes in the Market
Although battery costs are generally decreasing, fluctuations in lithium prices and supply chain issues in 2022 and 2023 have led to increased project costs. However, new battery capacities are expected to help reduce peak prices in Australia. In contrast, gas turbine costs are rising due to higher demand and limited production capacity. CSIRO predicts that gas turbine costs will not return to normal until 2035.
According to reports, the wait time for turbine orders can exceed five years, and the costs of large combined projects in some U.S. markets have doubled. These market changes mean that batteries will gradually replace the traditional roles of gas turbines.
The Role of Batteries in the Australian Energy Market
Australia is currently developing large battery projects. For example, the Waratah Super battery with a capacity of 850 megawatts is under construction in New South Wales, with part of it serving as a buffer for the transmission system. Additionally, the Big Battery with a capacity of 300 megawatts in Victoria will help increase transmission capacity between Victoria and New South Wales.
While batteries are expanding, gas turbines are expected to remain an essential source during long periods without renewable energy production. CSIRO predicts that gas technologies will supply about 37 percent of Australia's electricity generation by 2050, although their role will be more limited.
