Big battery boom means fewer transmission lines will be needed

Most of the now 600,000 household batteries have been installed in the past year. (ABC News: Robert Baird) Australia now has 600,000 household batteries and 45 gigawatts of storage in the pipeline, which is well ahead of projections, however wind energy approvals are falling short. The battery surge has reduced pressure on new transmission infrastructure, as part of its $106 billion system overhaul. The Australian Energy Market Operator (AEMO) is forecasting 6,000 kilometres of new transmission lines, a reduction of 1,500km since its last plan. Link copiedShareShare articleThe rapid rise of household batteries, 600,000 and counting, is reshaping Australia's electricity grid and reducing the need for some new transmission lines, according to the latest electricity blueprint released today. The Australian Energy Market Operator (AEMO) releases an Integrated System Plan (ISP) every two years and models the optimal development path (ODP) for Australia's electricity system by 2050. Much of its latest update is familiar reading, confirming that renewables and storage, backed by a small amount of gas, remains the most cost-effective way to overhaul the country's aging electricity grid. AMEO modelling again shows renewable energy backed up by batteries and gas remain the best way forward for Australia's grid. (Supplied: AEMO) However, the meteoric rise of batteries, big and small, has meant a change in how the market operator sees the grid of tomorrow unfolding. Battery prices have dropped significantly, and Australia is in the midst of a world-leading battery boom. "Although there is only 4 gigawatts (GW) of existing capacity, new storage in the connections pipeline has increased substantially, from 3GW in September 2022 to 17GW in 2024 and to 45GW in 2026," the report noted. "This is now well ahead of the 33GW of battery storage that the ODP projects would be needed in 2030. To date, battery projects have taken just over two years to go through the connections process." The surge in home batteries is helping to stabilise the national grid, experts say. (ABC News: Cath McAloon) Johanna Bowyer from the Institute for Energy Economics and Financial Analysis (IEEFA) said the Cheaper Home Batteries Program had driven the surge in small-scale storage. "The ISP emphasises the key role that households are playing in the energy transition by installing their own solar and batteries, improving the energy efficiency of their homes and moving towards electric cars and appliances," she said. Energy Consumers Australia (ECA) general manager of advocacy and policy Brian Spak said the ISP highlighted the role households were playing in the transition beyond just lowering their own cost of electricity. "As the report notes, the investments consumers are making in these resources benefit everyone in the National Electricity Market. They reduce the need for massive grid-scale investments, ultimately lowering costs for all consumers," he said. An old coal-fired power plant is being deconstructed alongside a brand new big battery in Kwinana, WA. (ABC News: Clint Jasper) This rise in battery storage has reduced the pressure on transmission lines, however, AEMO is still forecasting 6,000 kilometres of transmission lines will still need to be built, a reduction of almost 1,500km from the last ISP. "Australia's energy transition requires a whole-of-system approach, one that maximises value from generation, storage and transmission with the growing contribution of homes and businesses through rooftop solar, batteries and more flexible energy use," he said. As projects come online, and prices of batteries and solar drop, the amount of investment required for the transition to 2050 has fallen since the last ISP to $106 billion in today's dollars. Importantly this figure does not refer to government funding, but private investment, although the federal government is supporting the shift to renewables through mechanisms like the renewable energy target, and the capacity investment scheme, which underwrites projects. Mr Westerman said transmission would cost $6 billion of that, but would save consumers $28 billion. "Transmission is a relatively small share of overall system investment but delivers substantial benefits for consumers by unlocking lower-cost energy across the National Electricity Market," he said. Energy Minister Chris Bowen said Australia's independent market operator had confirmed the cheapest path forward for the energy system was "renewable energy, backed by gas and battery storage". AEMO's report includes its own qualification that the ISP "seeks the optimal development path while meeting government policies". While we already have more than enough battery capacity in the pipeline for the next few years, AEMO is warning that renewables, in particular wind, are not being built fast enough to meet the government's goal of 82 per cent renewables by 2030. "In total, approximately 38GW of new grid-scale s

Big battery boom means fewer transmission lines will be needed

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