Australia Energy Storage Systems Market Size, Share Analysis and Forecast Report 2025-2034

Australia Energy Storage Systems Market Trends

The Australia energy storage systems market has been strengthened by its role in facilitating the integration of renewable energy sources, such as solar and wind, into the grid, storing surplus energy for future use. ESS improve grid stability by balancing supply and demand fluctuations and helps reduce carbon emissions by supporting renewable energy adoption and decreasing reliance on fossil fuels. The stored energy can be deployed during peak demand times, reducing the need for polluting peak-load plants. Furthermore, ESS enhance energy security by offering backup power during outages and improving grid reliability. According to the Clean Energy Council (CEC), renewable energy accounted for nearly 40% of Australia’s electricity supply in 2023, marking a 9.7% increase from the previous year, largely due to 5.9GW of new clean power capacity, particularly from rooftop solar installations.

The growth of the Australia energy storage systems market is also driven by cost savings, as consumers and businesses can store low-cost off-peak electricity for use during peak demand. ESS support the development of decentralized energy systems like microgrids, which increase energy resilience. Technology plays a vital role in modernising Australia’s grid, enhancing its efficiency. ESS also support remote communities by providing reliable energy without the need for expensive infrastructure. The growth of energy storage is attracting investment into the Australian energy market, stimulating the economy, and advancing energy infrastructure. In December 2023, the Australian Renewable Energy Agency (ARENA) financed a project aimed at integrating solar energy with battery storage systemss in rural communities, further improving energy access and reliability in remote areas and showcasing the government's commitment to strengthening renewable energy infrastructure across Australia.

Australia Energy Storage Systems Market Growth

The Australia energy storage systems market revenue has been impacted by ESS promoting energy independence, which reduces businesses' and consumers' reliance on external suppliers. They also support electric vehicle (EV) charging using stored energy, helping reduce grid congestion and accelerating the shift to electric transportation. ESS enable consumers to participate in demand response programs, lowering consumption during peak times in exchange for financial incentives. By enhancing grid management, ESS provide services such as frequency regulation and voltage support. The growth of the ESS market also creates jobs in manufacturing, installation, and maintenance. According to the Australian Electric Vehicle Association (AEVA) Ltd, the ACT Government's Transition to Zero Emission Vehicles Action Plan saw 7,233 battery electric vehicle registrations by March 1, 2024.

Opportunities in the Australia energy storage systems market are further boosted as ESS extend the lifespan of renewable energy assets by balancing generation with storage. They enhance energy trading by allowing utilities to purchase electricity when it is inexpensive and sell it when prices rise. ESS also support environmental sustainability by reducing fossil fuel reliance and promoting cleaner energy systems. Investment in ESS fosters technological innovation, advancing energy storage technologies such as batteries, flywheels, and pumped hydro. Finally, ESS provide greater grid flexibility, enabling higher renewable energy integration without sacrificing reliability.

Australia Energy Storage Systems Market Insights

• Industry reports indicate that Australia receives an annual average of 58 million petajoules (PJ) of solar radiation, approximately 10,000 times the country's total energy consumption.
• The Department of Climate Change, Energy, the Environment, and Water stated that renewable energy sources, including solar power which contributed 14%, accounted for 32% of Australia’s total electricity generation in 2022.
• Data from the Clean Energy Regulator (CER) reveals that by the end of 2021, around 3.04 million Australian households and businesses had installed rooftop photovoltaic (PV) systems.

Industry News

November 2024

A community-owned battery energy storage system (BESS) in Australia was designed to generate up to USD 162,610 per year, as stated by Stace Tzamtzidis, GridBeyond Australia's regional director for solar, storage, and EV. The system stored surplus renewable energy for local communities, boosting efficiency, lowering costs, and improving grid stability by balancing supply and demand.

October 2024

Energy Vault Holdings announced that it had signed an agreement with Enervest Group to develop a 1 gigawatt-hour (GWh) battery energy storage system (BESS) for USD 350 million at the Stoney Creek site in New South Wales. The system would store excess renewable energy for use during low-generation or high-demand periods.

Australia Energy Storage Systems Market Drivers

Growth in Renewable Energy Integration

A key trend in the Australia energy storage systems market is the increasing integration of renewable energy sources, such as solar and wind, into the grid. As renewable generation can fluctuate, energy storage systems (ESS) play a crucial role in storing surplus energy during peak production and releasing it when demand rises or renewable output drops. This is vital for Australia's energy transition, as it ensures a more stable and reliable power supply while reducing reliance on fossil fuels. The growing use of ESS is boosting the demand for more sustainable energy solutions. The ESCRI Phase 2 project, funded by ARENA with USD 12 million of the total USD 30 million, features a 30 MW / 8 MWh grid-connected battery at the Dalrymple substation, Yorke Peninsula, South Australia, designed to support renewable generation and provide fast frequency response to stabilise the grid.

Declining Costs of Energy Storage Technology

The ongoing reduction in energy storage technology costs is significantly impacting the dynamics of the Australia energy storage market. Advances in battery technology, particularly with lithium-ion batteries, and economies of scale are driving down production and installation costs. This makes ESS more accessible to consumers and businesses, fostering wider adoption across residential, commercial, and industrial sectors. As energy storage becomes more cost-competitive with traditional energy sources, its deployment is set to rise, speeding up the shift towards a cleaner, more efficient energy grid. The Australian Energy Storage Roadmap reports that the cost of battery storage has decreased by over 70% in the last decade, aiding the country’s transition to renewable energy and reducing dependence on fossil fuels.

Opportunities in the Australia Energy Storage Systems Market

The Australian government is playing a pivotal role in the growth of the Australia energy storage market through a range of incentives, grants, and subsidies designed to promote the adoption of renewable energy and storage technologies. Initiatives such as the USD 1 billion “Renewable Energy Storage Fund” aim to stimulate investment in large-scale storage projects and enhance grid stability. In addition, state-level incentives, such as rebates for home battery storage systems, are further driving the uptake of energy storage. These policies are essential for accelerating Australia's transition to a low-carbon, sustainable energy system. For example, events like the Australian Clean Energy Summit, held in 2023, play a key role in shaping government policies and frameworks that incentivise energy storage solutions. The discussions and insights from these events often lead to policy changes and regulatory adjustments that support the deployment of sustainable energy systems.

Market Restraints

The Australia energy storage systems market faces several constraints. High initial capital costs for large-scale installations remain a significant barrier, limiting adoption among smaller businesses and households. Regulatory uncertainty, particularly regarding grid connection and energy pricing, further hampers market growth. Grid integration challenges, especially with older infrastructure, require costly upgrades.

Additionally, some current ESS technologies have limited capacity, which affects their ability to meet growing demand, necessitating further technological advancements. Environmental concerns, such as the impact of mining materials for batteries and disposal issues, also hinder progress. Reliability risks, especially with lithium-ion batteries, and competition from alternative energy solutions like hydrogen storage and pumped hydro, could further slow ESS adoption in Australia.

Australia Energy Storage Systems Industry Segmentation

“Australia Energy Storage Systems Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Market Breakup by Technology

• Pumped-storage Hydroelectricity
• Electrochemical Storage
• Electromechanical Storage
• Thermal Storage

Market Breakup by Application

• Transportation
• Grid Storage

Market Breakup by End Use

• Residential
• Commercial and Industrial

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Energy Storage Systems Market Share

Market Analysis by Technology

According to the Australia energy storage systems market analysis, Pumped-storage Hydroelectricity (PSH) is a dominant form of grid-scale energy storage. In Australia, PSH offers substantial advantages, such as providing long-duration storage, balancing supply, and demand, and enhancing grid stability. PSH works by pumping water to a higher elevation to store excess electricity, which is then released during peak demand. This system helps stabilise the grid, supports renewable energy integration by storing intermittent power like solar and wind, and can swiftly respond to fluctuations. It also provides a reliable, low-cost backup during grid emergencies. As part of its renewable energy transition, Australia is exploring pumped-storage projects, with the Australian Renewable Energy Agency (ARENA) funding several, including the 2,000 MW Snowy 2.0 projects. According to ARENA (2020), pumped-storage hydro could potentially meet 30% of Australia's electricity needs through stable, long-term storage.

The growth of the Australia energy storage systems market is also supported by Thermal Energy Storage (TES), which stores energy as heat and releases it when needed. TES helps manage the intermittent supply of renewable energy by converting electricity into heat, stored in materials like molten salts or other thermal media. TES systems are particularly useful for concentrated solar power plants (CSP), providing energy at night or during cloudy weather. In Australia, TES enhances grid reliability, reduces greenhouse gas emissions, and supports renewable energy integration with an efficient and cost-effective storage solution. The Australian government has backed thermal storage projects, such as the Aurora Solar Energy Project in South Australia. Developed by 1414 Degrees, this project uses thermal storage to store excess solar energy. According to ARENA (2021), thermal storage is viewed as a promising solution for Australia's energy storage needs, offering long-term, efficient storage with minimal energy loss.

Market Analysis by Application

According to the Australia energy storage systems market report, the market is driven by transportation, which enhances power distribution efficiency across regions. It optimises energy supply by facilitating the movement of stored energy, particularly during peak demand, reducing wastage, improving reliability, and supporting renewable energy integration. In July 2024, AGL Energy launched a new battery storage system integrated into the transportation grid in New South Wales, aiming to provide faster energy dispatch and stabilise power during grid congestion.

The demand for the Australia energy storage systems market is further boosted by grid storage, which helps manage electricity demand by storing surplus energy during low consumption periods and discharging it during peak demand. It improves grid stability, supports renewable energy integration, and reduces the reliance on fossil fuel-based peaking power plants, aiding the transition to cleaner energy. In March 2023, Tesla partnered with the Queensland Government to deploy large-scale grid storage solutions in Far North Queensland, optimising the regional power grid and advancing renewable energy use.

Market Analysis by End Use

The growth of the Australia energy storage systems market is driven by residential energy storage systemss, which enhance energy independence by storing excess solar power, lowering electricity bills, and improving grid stability. These systems maximise the use of renewable energy, particularly solar, reducing dependence on fossil fuels and supporting sustainability. They play a vital role in Australia’s renewable energy transition, as highlighted in the Australian Energy Regulator's "State of the Energy Market 2023," which emphasises their increasing importance in reducing grid reliance and promoting solar adoption.

The Australia energy storage systems market is also driven by commercial and industrial energy storage, which reduces energy costs by storing off-peak electricity for use during peak demand, provides backup power, and improves reliability. It fosters sustainability by integrating renewable energy, cutting emissions, and helping businesses transition to a cleaner, more stable energy future. ARENA’s 2023 report underlines the role of energy storage in aiding commercial and industrial sectors to lower carbon footprints, integrate renewable energy, and achieve sustainability goals. By storing excess renewable energy for later use, businesses reduce reliance on fossil fuels, lower costs, and enhance grid stability.

Australia Energy Storage Systems Market Regional Insights

New South Wales Energy Storage Systems Market Overview

The energy storage market in New South Wales enhances the reliability of the grid, helps manage peak demand, and supports the integration of renewable energy. It strengthens energy independence and ensures the stability of the state’s power network. New South Wales generates a considerable amount of solar and wind energy, with over 30% of its electricity coming from renewable sources, as outlined in the NSW Government’s "Energy Strategy 2023.

Queensland Energy Storage Systems Market Trends

According to the Australia energy storage systems industry analysis, Queensland's energy storage market is centred on utilising renewable energy for both residential and commercial applications. It encourages energy independence, reduces costs, and supports large-scale renewable energy projects to promote sustainability. Queensland generates significant solar and wind energy, with solar power accounting for over 40% of its electricity generation. This shift is supported by the Queensland Government’s "Renewable Energy Action Plan 2023."

Western Australia Energy Storage Systems Market Dynamics

The energy storage market in Western Australia is expanding rapidly, with a focus on improving grid stability and increasing the integration of renewable energy. Energy storage plays a crucial role in reducing dependency on the grid and lowering costs. Western Australia generates energy from solar, wind, and hydropower, and the state's energy transition aims for 50% renewable energy generation by 2030, as set out in the "WA Renewable Energy Strategy 2023."

Competitive Landscape

The Australia energy storage system market key players are expanding into a range of sectors, such as cloud computing, artificial intelligence, and energy solutions. In the energy sector, these companies are committed to advancing clean energy technologies, offering innovative solutions for renewable energy integration and smart grid systems. Their energy divisions develop cutting-edge energy storage systems, photovoltaic (solar) inverters, and digital management platforms that enhance the efficiency and reliability of power grids. These energy solutions help optimise energy consumption, reduce carbon emissions, and support the global transition to sustainable energy.

Key Industry Players

Enel S.p.A.: Based in Rome, Italy, Enel was founded in 1962. This multinational energy company is involved in the generation, distribution, and sale of electricity and natural gas. Enel is at the forefront of the renewable energy sector, focusing on sustainable energy solutions and energy storage technologies.

LG Corp. (LG Energy Solution Ltd.): LG Corp., established in 1947 and headquartered in Seoul, South Korea, is a major global conglomerate. Its energy division, LG Energy Solution Ltd., focuses on producing lithium-ion batteries for electric vehicles, energy storage systems, and other applications, driving the global shift towards cleaner energy technologies.

Tesla Inc.: Founded in 2003 and based in Palo Alto, California, Tesla Inc. is an industry leader in electric vehicles, energy storage, and solar energy solutions. Tesla's energy storage systems, such as the Powerwall, aid the transition to sustainable energy by storing and managing renewable energy for homes and businesses.

Huawei Technologies Co., Ltd.: Founded in 1987 and headquartered in Shenzhen, China, Huawei is a global leader in telecommunications and information technology. The company’s energy division offers advanced energy storage systems and smart grid technologies, aiding the integration of renewable energy and supporting the transformation of the global energy landscape.

Other key players in the Australia energy storage systems market report are Pacific Green Technologies Inc., Enphase Energy Inc., EVO Power Pty Ltd., Century Yuasa Batteries Pty Ltd. (GS Yuasa Corp.), PowerPlus Energy Pty Ltd. and Battery Energy Power Solutions Pty Ltd., among others.

Recent Developments

October 2024

Energy Vault disclosed a collaboration with Enervest to create a 1.0 GWh battery energy storage system at the Stoney Creek site in New South Wales, aimed at improving grid reliability and boosting renewable energy capacity in the area.

October 2024

Wärtsilä announced its intention to build a 150 MW / 300 MWh battery energy storage system in South Australia, designed to enhance energy security and reliability as the state moves towards greater use of renewable energy sources.