The multi-gigawatt proving ground: Wärtsilä on Australia’s energy storage market
In early December 2024, we spoke with Andy Tang, VP of Wärtsilä Energy Storage & Optimisation Australia about the country’s large-scale battery storage market, where he expressed that battery energy storage systems (BESS) in the country are “at a scale that is not seen anywhere else in the world.”
Tang was discussing the company’s involvement in the New South Wales Eraring project, which will be the country’s largest BESS when fully operational at 2.8GWh in 2027. The Eraring BESS site, owned by Australian utility Origin Energy, saw its stage three expansion green-lit last year.
Tang explained that the Eraring project will harness Wärtsilä’s digital energy management and control platform, GEMs. This technology has been used in other Australian BESS projects, such as Amp Energy’s 150MW/300MWh 2-hour duration Bungama BESS in South Australia.
“One of the neat things is that it [the BESS] will operate in virtual, synchronous machine mode, which means that it will be able to essentially set the voltage and enable short circuit current capabilities, such as reactive current group control and synthetic inertia, to support grid stability and security. We’re quite proud of this project, and we’ve been working with Origin Energy for many years,” Tang added.
Modo: ‘Big question mark’ over large-scale BESS commissioning schedules in Australia’s NEM
Another key debate in the Australian energy storage market is the development of the National Electricity Market (NEM), which covers Tasmania, Victoria, South Australia, Victoria, the Australian Capital Territory and Queensland.
Modo Energy, the host sponsor for the Energy Storage Summit Australia 2025, told ESN Premium that over 4GW of utility-scale batteries will be in commercial operation by the end of the year; however, question marks remain about its delivery.
“The big question mark is about how it will be commissioned. We have seen a few systems where commissioning has dragged on. For example, the Capital Battery was constructed in 2023 and was stuck in commissioning for a long time,” said Wendel Hortop, director of Australia at Modo Energy.
2025 could also serve as a benchmark year to see what the future holds in 2026 and 2027 regarding the rollout of utility-scale BESS projects on the NEM.
“Can they [the BESS projects] all get through commissioning and become fully commercially operational by the end of the year? That will give us a really good view on the rest of the pipeline regarding how realistic it is for these assets to come online,” Wendel said.
BESS in the NEM earn an average of AU$148,000 in 2024
Modo also recently released data showing that BESS on the NEM earned an average of AU$148,000/MW (US$92,810/MW) in 2024, a 45% increase from the previous year.
Modo said these revenue figures followed market trends witnessed across the past several years, where revenues from Frequency Control Ancillary Services (FCAS) markets dropped. This drop was offset by energy trading revenues, which more than doubled to AU$102,000/MW from 2023 to 2024.
The energy industry data platform claims that one of the primary reasons for the fall in FCAS revenues is a collapse in the value obtained from the regulation of FCAS. Despite this fall, contingency FCAS revenues increased slightly due to batteries providing contingency FCAS services at very high prices.
In contrast to a fall in FCAS, revenues from energy reached an all-time high, increasing by 29% compared to the previous record set in 2022. This surge was primarily driven by a rise in extremely high prices, which led to larger price spreads. In 2024, the price spread captured by batteries was 72% higher than in 2023.
On the first day of the Summit, Modo’s Wendel Hortop will give a presentation titled ‘The State of BESS in the NEM.’
Revenue streams will also be discussed on the ‘Merchant Revenues & Maximising your BESS’ panel on the first day of the Summit. This will include voices from CORE Markets, Pacifico Energy, Aquila Clean Energy, Genex Power, the University of Adelaide, and Mott Macdonald.
Australia’s shift towards long-duration energy storage systems
Another key trend to be discussed at the Summit is long-duration energy storage (LDES) technology and some of the solutions and market mechanisms that are helping to drive investment into this space.
LDES has been featured in several articles available to ESN Premium subscribers, featuring insight from Eku Energy’s chief technology officer, Elias Saba. On day one of the summit, Saba will discuss the volatility of the NEM.
Last month, ESN Premium reported that various factors, including systems’ cost structure, have enabled a shift toward LDES on the NEM.
“Long-duration systems on the NEM have been helped by some of the fundamental economics of storage over the past year or two. We’ve seen a significant decline in the cost of lithium and generally improvements in energy density and the cost of the general equipment, structure, and storage supply,” Saba said.
Elias Saba added that the rise in projected earnings from a longer duration of BESS could be due to the rising appetite of offtakers.
“A lot of the large load exposed customers around the NEM, and also some of the commodity traders, whether it’s in the NEM or a different region, are interested in energy storage, both for the capability and flexibility of the asset, but also the ability to hedge exposure via the trading of the asset in the market, and to also protect the risk positions in their books,” Saba said.
Long-duration energy storage in Australia has its own dedicated panel discussion at the Summit, ‘Looking Beyond 2 Hours, the Future is Long Duration’ on day two. It will feature insight from Akaysha Energy, Energy Dome, Sungrow Australia, Everoze, and Equis Australia.
‘Enhance and pivot’: Australia’s relationship with China could provide energy storage boom
Earlier this week, ESN Premium sat down with Tim Buckley, director of the think tank Climate Energy Finance (CEF), who explained that Australia’s single biggest opportunity is to enhance and pivot its relationship with China.
Buckley believes Australia’s positive trade relations with China will increase the investability prospects in the country’s energy storage market, which could prove vital in Australia’s shift to a green economy.
“To me, the single biggest opportunity for Australia is to enhance and pivot our relationship with China. We export 95% of our lithium to China. We have strong bridges between Australia and China,” Buckley said.
“We need to enhance and pivot them so that we are complementary to China’s development of the world’s leading battery manufacturing systems.”
Buckley says the speed and scale at which the Chinese renewable energy and storage industries move are unparalleled. Australia could support that with natural resources and R&D.
“The speed and the scale of what China is doing in batteries is enormous, but it is resource intensive. Australia is a trusted partner to China in all those resources, so we have a massive opportunity to add our resources to the supply chain,” Buckley said.
“We will receive the BESS from China, from BYD, CATL, Gotion, and all the other Chinese world leaders in batteries. We will be an integral part of the supply chain, and in return, Australia’s energy security will be enhanced.”
On day one of the Energy Storage Summit Australia 2025, Tim Buckley will discuss the Capacity Investment Scheme and incentives for Australian energy storage.
Readers of Energy-Storage.news can get a 20% discount on tickets with the code ESN20 from the Energy Storage Summit Australia event website.
