Supercharging Australia’s battery industry

This insight article was first published on 29 January 2026 and was updated on 15 July 2026.

Large-scale renewable generation projects are springing up across the world, delivering power to homes, businesses and industry as the world transitions to clean energy.

Nowhere else in the world is the transition to renewables more apparent than Australia.

Australia’s energy transition is real and is happening rapidly. The country has a legislated goal of net zero emissions by 2050, and has set a target of 82% renewable energy by 2030. These goals are helping drive billions of dollars of investment in renewable energy by providing certainty to investors about the direction and pace of Australia’s energy transition.

The investment is paying off. In the last 6 years alone, the share of renewable energy has doubled in Australia’s main power grids. Planning is underway to ensure the grid can operate effectively during prolonged periods of 100% renewable output.

However, sustained investment is needed – Australia’s share of renewables must double again in the next few years to reach 82% by 2030.

The critical ingredient needed to support a power grid with high amounts of renewables and to ensure energy security is energy storage of various technologies, sizes and duration.

Thanks to strong market fundamentals, government support and sophisticated industry players, battery investment in Australia can make strong commercial sense – in addition to helping the country connect more renewables and reduce emissions.

An attractive market for battery deployment

Australia is already a world leader when it comes to deploying large-scale batteries in the power grid. We developed the world’s first large-scale battery – the Hornsdale Power Reserve – in 2017.

Since then, there has been strong growth in the sector. On a per capita basis, Australia sits far above the rest of the world. We were the first nation to surpass 1 GWh of utility battery capacity per million people. According to Rystad Energy, Australia is currently the world’s third largest market for utility-scale storage behind only the huge economies of China and the US. This is impressive for a country with a population of less than 30 million people.

Australia has nearly 50 big batteries in operation, and more under construction, commissioning and advanced development. Some notable projects include:

• Neoen’s 560 MW / 2,240 MWh Collie Battery, currently the largest operating battery in Australia
• Copenhagen Infrastructure Partners’ 960 MWh Summerfield battery storage project in South Australia
• Origin Energy’s 700 MW / 2,800 MWh Eraring BESS, which will be Australia’s largest battery when complete in 2027
• Ark Energy’s 475 MW / 2,200 MWh Richmond Valley Solar and BESS, currently under development.

One of Australia’s flagship projects is the Blyth Battery, developed by Neoen in collaboration with NHOA Energy and Elecnor Australia. The 238 MW / 477 MWh battery in South Australia will meet consumer and industrial demand for clean energy, including BHP’s Olympic Dam operations – one of the world’s most significant gold, copper and uranium deposits.

Australia must maintain this momentum. The National Electricity Market (NEM) will need 33 GW of dispatchable, grid-scale battery and pumped-hydro storage by 2050, in addition to the 7 GW provided by the NEM’s existing hydro-electric power stations.¹ This is a large uplift from the current BESS storage capacity in the NEM of approximately 4.3 GW.²

Strong investment opportunities

The case for energy storage investment is set to remain strong. Australia is commissioning renewables projects (solar and wind) at a rapid pace.

In addition, much of Australia’s coal-fired power plants – which currently underpin dispatchable capacity – are set to reach the end of their lives and exit the market by the end of the next decade. As this capacity leaves the market, it will need to be replaced by renewables, firmed with storage.

These structural changes in Australia's energy mix mean that energy storage projects can make commercial sense based on energy arbitrage alone.

There are also opportunities to support the grid by easing congestion, providing frequent services or improving system strength in areas where grid support is needed. The grid support services can provide valuable additional revenue streams for storage projects.

These strong market fundamentals are complemented by robust government programs to ensure storage projects are brought online when and where they are needed. These include:

• the Australian Government’s Capacity Investment Scheme
• the New South Wales Government’s Long Term Energy Service Agreements
• the South Australian Government’s Firm Energy Reliability Mechanism.

Australia’s leadership in battery storage means Australian stakeholders – financiers, regulators, integrators, and network operators – are familiar with what it takes to get projects approved and commissioned.

Opportunities in thermal energy storage systems

Australia is seeing growing opportunities in thermal energy storage systems (TESS), which capture and store energy in the form of heat or cooling for later use. TESS can support grid decarbonisation and be used in industrial applications by converting renewable energy into dispatchable heat and steam.

A significant portion of Australia’s manufacturing base, from food and beverage manufacturers to alumina refining, relies on gas-fired process heat systems. These industrial facilities are increasingly exposed to rising energy costs under Australia’s Safeguard Mechanism. The Mechanism requires Australia’s highest greenhouse gas–emitting facilities to reduce their emissions in line with the nation’s emission reduction targets.

By storing energy when electricity prices are low and releasing it when needed, TESS can help businesses reduce operating costs, improve energy security, and lower emissions. For many industrial users, TESS is a practical pathway to electrify heat-intensive operations with renewable energy, replacing processes that have historically depended on natural gas.

Australia’s abundant renewable energy resources provide a strong foundation for TESS deployment. As solar and wind generation continue to grow, TESS can capture excess renewable electricity and convert it into stored thermal energy for later use.

Supported by ARENA and CSIRO, Mars Petcare became the first large-scale, steam-based manufacturing facility in Australia to operate on 100% renewable energy for process steam, utilising TESS. Find out more about Mars Petcare’s innovation in this case study.

Australia also has an emerging ecosystem of TESS innovators. Local companies such as MGA Thermal and 1414 Degrees are advancing long-duration TESS technologies for industrial applications. International TESS companies, such as Rondo Energy, have established their APAC headquarters in Australia. Combined with Australia’s strong research capabilities, supportive policy environment and large industrial customer base, these factors position the country as an attractive destination for TESS investment and deployment.

Making batteries in Australia

Australia is looking to do more than just deploy batteries onto the power grid. The National Battery Strategy sets out Australia’s ambition to become a world-leading producer of batteries and battery materials. Foreign investment, skills and capacity will be crucial to meet this goal.

Fortunately, Australia has many of the essentials needed to build a local battery manufacturing industry that can also play a role in global battery supply chains. These include:

• large deposits of the critical minerals needed for batteries, including lithium and vanadium, and a well-established resources sector with world-leading ESG standards
• opportunities to work with universities and institutes undertaking research into next-generation battery technologies
• supportive government policies and funding initiatives
• deep and well-established trading relationships with key partners and a trusted reputation as a stable investment destination.

In August 2025, the Australian Government launched the Battery Breakthrough Initiative, a A$500 million grant program to grow Australia’s battery manufacturing industry. The program will focus on funding different parts of the battery chain, including active minerals, cell manufacturing and pack assembly. 

Other government funding programs include:

• the Future Made in Australia Agenda, which commits A$22.7 billion over 10 years to attract and facilitate private sector investment into priority industries, including battery manufacturing and supply chains.
• the National Reconstruction Fund Corporation, which is investing A$15 billion for the Australian Government in high-priority industries, including renewables and low-emission technologies
• the Critical Minerals Production Tax Incentive, which provides eligible recipients with a refundable tax offset of 10% of the eligible costs of processing certain critical minerals in Australia. The offset will be available between 1 July 2027 and 30 June 2040, for a maximum of 10 years.

Australian battery innovation

Australia is also advancing battery research. Australian researchers pioneered the vanadium redox flow battery at the University of New South Wales. Multiple research organisations are undertaking battery research, development and testing across multiple technologies and chemistries.

International companies can partner with Australian universities and research institutes to enter the market or collaborate on research and development projects.

Under Australia’s R&D Tax Incentive program, generous tax offsets are available for costs associated with eligible research and development.

A top destination for renewables investment

Australia recognises that foreign direct investment is essential to its energy transformation.

According to the Clean Energy Investor Group (an industry body representing clean energy investors), about 70% of the funds required for new renewables projects in Australia need to come from overseas sources. International investors such as ACEN, Acciona, Copenhagen Infrastructure Partners, Iberdrola, Neoen and Octopus Energy are driving many renewable energy projects in Australia. Potentia Energy – a joint venture between Enel Green Power and INPEX – also has 19 renewable energy projects in Australia at various stages.

Rated AAA by all 3 credit rating agencies, Australia’s economic and business fundamentals make the country a safe investment destination. According to the International Monetary Fund (IMF), Australia’s economy grew by an average of 2.3% a year between 2020 and 2025. The IMF also expects Australia to have faster economic and employment growth than any of the G7 countries. Between 2026 and 2030, IMF forecasts Australia’s economy will grow by 10.3%, outperforming other advanced economies, which are expected to grow at a more modest 8.7%.

S&P Global ranked Australia the world’s most attractive market for renewable energy investment in its annual Global Renewable Market Attractiveness Rankings. The ranking was driven by Australia’s high-quality solar resources and continued strong support from federal and state authorities.

Other factors that make Australia a safe and rewarding investment destination are its high-quality workforce, stable political environment, and supportive government policies around renewables.

How Austrade can help

The Australian Trade and Investment Commission (Austrade) supports foreign investors to establish and expand operations in Australia. Our experts in Australia and around the world can help you through every stage of your investment journey.

We offer the latest industry insights, connections with key stakeholders and decision-makers, and virtual or physical site visits to Australia. Thousands of foreign businesses have worked with us to tap into the Australian market.

For more information on energy storage opportunities in Australia, contact an Austrade investment specialist.