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Grids and storage solutions

Australia is transforming its electricity grid to support the country’s growth in clean energy generation and storage. The Australian Government has committed A$23 billion to upgrade the grid and boost energy performance, creating opportunities for industry partners.

Australia offers investors:

  • Momentum and certainty. Australia is on its way to becoming a renewable energy superpower, backed by government net zero commitments. The shift in our energy mix and development of renewable energy hubs require grid upgrades.
  • Abundant resources including wind, solar and critical minerals, which provide a competitive advantage for developing and deploying renewable energy and energy storage technologies.
  • A highly-educated and skilled workforce, with existing capability in large-scale energy industries.
$20bn
government support

Rewiring the Nation provides A$20 billion in low-cost finance to expand and modernise Australia’s electricity grids

Thinking about entering the Australian market?

  • Investors typically establish a new company, register as a foreign company or acquire an existing company. Assess your options with our Investor Guide.
  • Austrade is Australia’s national investment promotion agency. We attract and facilitate game-changing foreign direct investment into Australia. Our team of business and investment specialists can connect investors to early-stage opportunities in Australia and provide direct and tailored professional assistance. Find out how we can help.

Powering progress

Australia’s energy mix is rapidly transforming

The Australian Government is targeting 82 per cent renewables for our National Electricity Market by 2030. Major upgrades to our transmission networks are needed to support the changes underway to Australia’s electricity generation:

  • Renewables production increased 10 per cent in 2021, largely due to rapid growth in solar and wind (Source: Australian Energy Statistics 2022).
  • Renewables accounted for 29 per cent of Australia’s total electricity generation in 2021 – the highest on record (Source: Australian Government).

Strong government support for grid infrastructure

The Australian Government’s A$20 billion Rewiring the Nation plan aims to drive investment in electricity infrastructure.

It supports government-industry partnerships and provides low-cost finance to upgrade, modernise and expand our electricity grid. Around A$12 billion has been allocated to priority transmission projects to date, including:  

  • connecting into the grid new Renewable Energy Zones (REZ) in Victoria and New South Wales. These capitalise on economies of scale to connect multiple renewable generation and storage projects with high-voltage transmission infrastructure.
  • the Marinus Link, which will connect Tasmania’s Battery of the Nation hydropower project to the mainland’s power grid through an underwater cable system.

Support for battery technology

Fluctuations in power generation from variable wind and sun create a market for energy storage to ensure a stable and consistent supply (also called “firming”). Energy storage becomes more important as the proportion of renewable energy in the grid increases.

  • Australia has momentum. At June 2023, 34 large-scale batteries valued at A$4.1 billion total investment were under construction. They will deliver a combined storage capacity of 4935.5 MW and the ability to discharge 12,849.5 MWh (Clean Energy Council 2023).
  • We offer government support. The Australian Renewable Energy Agency (ARENA) in December 2022 announced a A$176 million investment in eight large-scale batteries with a total capacity of 2.0 GW / 4.2 GWh. ARENA previously provided A$81 million in funding for eight grid scale batteries. The projects help to build experience the technology, de-risk investment and drive further innovation from inverter manufacturers.
  • Our strong track record. Australia is already home to some of the world’s largest energy storage projects, such as the Hornsdale Power Reserve – the world’s first big battery, also supported by ARENA – and Snowy 2.0, a pumped-hydro project under construction that will provide on demand energy and large-scale storage.
  • We have a growing consumer market. Installation of batteries linked to solar systems grew by 55% from 2021 to 2022. Australia’s home energy storage systems grew to 1920MWh in 2022 providing enough energy storage to meet the daily electricity needs of 128,000 households (Australian Battery Report 2023).

The Integrated System Plan (ISP) by the Australian Energy Market Operator (AEMO) is a strategic blueprint that guides long-term investments in Australia's electricity sector. It outlines the development of a reliable and sustainable energy system, guiding decisions on power plant development, transmission networks, and renewable energy integration. It offers a valuable insight into Australia’s energy market.

Fast facts

  • Australia’s east and southeast state and territories are serviced by the National Energy Market (NEM), one of the longest interconnected electricity markets in the world, spanning over 5000km (Source: CSIRO 2023).
  • The NEM is currently delivering approx. 180Twh of electricity annually to industry and homes. Electricity usage from the grid is expected to almost double to 320TWh by 2050 to meet demand (Source: AEMO 2022).
  • The variable renewable energy share of electricity in the National Energy Market is set to increase from 25% in 2022 to 64% in 2030 and 94% by 2050 (Source: CSIRO 2023).
  • The Australian Energy Market Operator (AEMO) has identified the need for a further 10,000km of transmission in the National Energy Market, This is the nation's largest electricity network covering the country’s east and southeast (Source: AMEO 2022).
  • In Western Australia, the state’s major electricity network requires an estimated 4,000km of additional transmission. The state government released the South West Interconnected System (SWIS) Demand Assessment in 2023, predicting demand for renewable energy will increase significantly (Source: Government of Western Australia 2023).
  • Australia’s storage capacity from batteries, virtual power plants and pumped hydro is projected to increase by a factor of 30, from 2GW in 2022 to 61GW in 2050 (Source:  AEMO 2022).

Incentives, grants, and support

The Australian Government is investing significantly to facilitate the transition of Australia’s energy supply to renewables. Funding includes:

  • The Rewiring the Nation plan commits A$20 billion in low-cost financing for transmission investments to modernise the grid and to support major developments in battery storage and renewable energy projects.
  • The Government of Western Australia has committed A$126 million of additional funding to begin upgrading that state’s transmission network. The funding will support network upgrades, internodal works and planning and scoping for broader network improvements set out in the South West Interconnected System (SWIS) Demand Assessment.
  • The Australian Government has agreed with its state and territory counterparts to establish a Capacity Investment Scheme. It will provide a consistent national framework to encourage new investment in clean dispatchable capacity. There will be competitive tenders for renewable generation and storage projects to fill expected reliability gaps. It is expected to unlock A$10billion of new investment in our grid and 6GW of dispatchable power. It will work alongside the A$157.9 million National Energy Transformation Partnership to coordinate action by the Commonwealth, states and territories.
  • The A$1.9 billion Powering the Regions Fund to support Australian industry to decarbonize, develop new clean energy industry and build Australia’s new energy workforce.
  • Development of a new A$15 billion financing vehicle, the National Reconstruction Fund. It will drive investments into priority areas of the Australian economy including up to A$3 billion targeted at renewables and low emissions technologies.
  • Over A$300 million for community batteries and solar banks aimed at reducing bills, cutting emissions, and easing pressure on the grid, including A$224.3 million to deploy 400 community batteries across Australia and $102.2 million for a community solar banks initiative.
  • A$83.8 million committed to develop and deploy microgrid technology across First Nation communities.
  • Australian Renewable Energy Agency (ARENA) support for renewable energy research, development, and deployment including for storage technologies. Businesses can apply for funding under various schemes such as the Advancing Renewables Program and the Renewable Energy Innovation Fund.
  • Clean Energy Finance Corporation (CEFC) financing for projects including energy storage. Businesses can apply for loans to support the development, construction, and operation of energy storage projects.
  • Support from individual states and territories. This may include:

“An array of developing storage technologies is on the cusp of commercial viability. These technologies have the potential to improve access to electricity supply in remote communities, support cost-effective decarbonisation in manufacturing industries, and transform Australia into a green hydrogen export superpower.” - Larry Marshall, CSIRO Chief Executive, Renewable Energy Storage Roadmap 2023.

Planning a powerful future

Australia’s electricity grid is decentralised with long distances between our demand centres (major cities). Australia’s National Electricity Market – covering its populated eastern and south-eastern states – is one of the longest interconnected electricity markets in the world (Source: Clean Energy Council). A mix of government and private organisations own and run Australia’s energy infrastructure (Source: Energy Networks Australia. Guide to Australia’s Energy Networks).

  • The Australian Government has announced the establishment of the national Net Zero Authority. It will coordinate programs and policies across government to support regions and communities to attract and take advantage of new clean energy industries and help investors and companies to engage with net zero transformation opportunities.
  • The Australian Energy Market Operator (AEMO) is responsible for managing the day-to-day operation of Australia’s energy markets. It works to balance supply and demand, ensure grid stability, and support the integration of renewable energy, including the integration of batteries and demand response schemes. It publishes the Integrated System Plan (ISP), a roadmap which coordinates transmission infrastructure. It provides valuable insights into the state of the energy market, future trends and investment opportunities.
  • Our national science agency CSIRO conducts research in areas including energy, climate change and sustainability. Its policy recommendations include the Electricity Network Transformation Roadmap and the Renewable Energy Storage Roadmap.
  • The Australian Government has committed A$14m to establish the Powering Australia Industry Growth Centre to boost industry-driven innovation. It will support Australian businesses in developing and adopting new renewable technologies, including batteries.

Success stories

  • The Hornsdale Power Reserve, owned by French company Neoen, is the world’s first big battery and has saved South Australian consumers over A$150 million since its installation in 2017. Following its expansion in 2020, the 1500MW battery now includes Tesla’s Virtual Machine Mode, enabling it to provide inertia support services to the electricity grid.
  • Siemens has partnered with Swinburne University of Technology to set up the Siemens Swinburne Energy Transition Hub in Melbourne. With an investment of $5.2 million, the Hub aims to build the most advanced future energy grid lab of its kind in Australia. It offers researchers and industry the opportunity to work on solutions for greener, more efficient future energy systems.
  • Schneider Electric, a multinational corporation, has established a research and development Centre in Melbourne focused on developing sustainable energy management, including microgrid solutions, and energy storage. The Centre aims to collaborate with local startups and researchers to drive innovation in the sector.
  • Eight grid-scale batteries, including projects from TagEnergy, Neoen, Risen, FRV received financing from the Australian Renewable Energy Agency’s (ARENA) Large Scale Battery Storage Funding Round. All batteries are expected to be operational by 2025.

Success stories

Multiple wind generators of a wind farm stand in a field with an orange sky at sunset
Four mine technicians standing in a group with high visibility vests.
Four men in orange high visibility vests stand in front of a solar panel array and metal box housing a battery
A bank of rectangular metal containers with a large blue cylindrical storage tank in the background
An artist concept render of a big battery storage facility connected to the electricity grid.
A concept image of an compressed air energy storage facility in an Outback location.

Contact an Austrade specialist as an investor as a buyer