Australia Energy Storage Systems (ESS) Market Size and Share - Growth Analysis Report and Forecast Trends (2026-2035)

Market Overview

The Australia energy storage systems (ESS) market is moving from pilot-scale grid batteries to mass deployment. Four-hour lithium-ion plants now sit beside coal sites, while household batteries have grown from a niche purchase into a federally supported mainstream product.

Three forces are shaping demand: the Cheaper Home Batteries Program, which began on 1 July 2025; the Capacity Investment Scheme, whose eighth tender in June 2026 awarded 4,205 MW of batteries; and coal retirements that raise the value of evening firming capacity.

In May 2026, the Clean Energy Council reported that large-scale battery capacity commissioned in 2025 rose 233%, and in September 2026 Akaysha Energy and AGL Energy each declared a major New South Wales battery fully operational.

Key Market Trends and Insights

• Home battery surge: Ministers reported more than 507,000 installations under the Cheaper Home Batteries Program by August 2026, supported by an expanded A$7.2 billion budget.
• Grid fleet scale: AEMO reported that National Electricity Market battery capacity passed 9,000 MW in the June 2026 quarter, with 4,640 MW starting commissioning in twelve months.
• Tender 8 pipeline: The Capacity Investment Scheme awarded 16,074 MWh across 15 battery projects in four states in June 2026, led by Queensland and Victoria.
• Margin compression: Average NEM battery price spreads fell 85% to A$51 per MWh in the June 2026 quarter, raising the value of contracted revenue.

Australia Energy Storage Systems (ESS) Market Size and Forecast

The market is shifting from a rebate-led household boom and first-wave grid batteries towards contracted, longer-duration and better-integrated storage. Residential systems lead revenue today because the federal program pulled demand forward, while utility-scale storage advances fastest as underwritten tenders, coal closures and state reliability needs add large projects. Flow batteries and storage lasting beyond eight hours grow from a small base as planners seek firming that outlasts the evening peak. New South Wales remains the largest state, and Queensland builds fastest as tender winners reach construction. Falling arbitrage spreads reward owners with contracts and flexible operating strategies rather than merchant exposure alone.

Key Takeaways: Australia Energy Storage Systems (ESS) Market

Rebates And Tenders Anchor Long-Term Storage Demand

Revenue should grow from AUD 7.95 billion in 2025 to AUD 19.35 billion in 2035 at a 9.3% CAGR, backed by household rebates and underwritten grid contracts.

Flow And Long-Duration Storage Lead Growth

Lithium iron phosphate holds the largest share, but flow batteries grow at an estimated 15.4% CAGR and storage beyond eight hours at 13.8%, helped by Western Australia's Kalgoorlie plan.

Coal Site Batteries Reshape Evening Supply

Origin, AGL and Akaysha are locating large batteries at coal sites, reusing grid connections to shift midday solar output into the evening peak.

• Waratah: 850 MW and 1,680 MWh at the former Munmorah station
• Liddell: 500 MW and 1,000 MWh, fully operational in September 2026
• Eraring stage 1: 460 MW and 1,770 MWh, operating from January 2026

Australia Energy Storage Systems (ESS) Market Report Summary

Key Insight

Storage demand is structural rather than cyclical. Rebates, funded tenders and coal retirements support growth, while residential, utility-scale and long-duration segments expand at different speeds through 2035.

Key Trends in the Australia Energy Storage Systems (ESS) Market

The Australia energy storage systems (ESS) market is being reshaped by coal-site batteries, underwritten tenders, record annual deployment and the first long-duration flow battery plans.

September 2026 - Akaysha Energy Declares Waratah Super Battery Fully Operational

• Akaysha Energy announced on 28 September 2026 that the 850 MW and 1,680 MWh Waratah Super Battery had reached final commercial operations.
• It occupies the former Munmorah coal power station site in New South Wales, and Transgrid delivered the system integrity protection scheme control system.
• The roughly A$1 billion project adds firm evening capacity at a former coal site, and Akaysha built, owns and operates it.

June 2026 - Capacity Investment Scheme Tender 8 Awards 4.2 GW Of Batteries

• Energy-Storage.News reported in June 2026 that 15 projects totalling 4,205 MW and 16,074 MWh won Tender 8 contracts, slightly above the 16 GWh target.
• Winners include Ampyr Energy, Edify Energy, Potentia Energy, Akaysha Energy and Eku Energy across Queensland, New South Wales, Victoria and South Australia.
• Contracted revenue floors give developers a financing anchor while merchant price spreads narrow.

May 2026 - Clean Energy Council Reports Record Year For Batteries

• The Clean Energy Council's Clean Energy Australia 2026 report, released in May 2026, said 12 large batteries totalling 2 GW and 5.1 GWh were commissioned in 2025.
• Financial commitments reached 4.3 GW and 13.5 GWh, worth A$4.8 billion, while battery capital costs fell 20%.
• Home battery purchases rose 260% to 268,675 units, and Australia became the third-largest utility-scale battery market in the world.

November 2025 - Western Australia Seeks Proposals For 500 MWh Flow Battery

• The Western Australian government called for expressions of interest in November 2025 for a 50 MW and 500 MWh vanadium flow battery at Kalgoorlie.
• A$150 million of state funding supports up to 10 hours of discharge, and Australian Vanadium said it would submit a proposal.
• The project would be the largest flow battery deployed in Australia and uses locally processed vanadium.

Key Insight

Growth is anchored by policy rather than hype. Rebates and funded tenders set direction, coal sites supply connections, and flow and long-duration projects mark the next step beyond four-hour batteries.

Recent Market Developments in the Australia Energy Storage Systems (ESS) Market

Recent developments, presented from the most recent, show the Australia energy storage systems (ESS) market moving from construction milestones into full operation and larger staged financing.

September 2026 - AGL Energy Declares Liddell Battery Fully Operational

• AGL Energy announced on 18 September 2026 that its 500 MW and 1,000 MWh Liddell battery was fully operational after final reliability testing.
• It is a two-hour battery at the partly demolished Liddell coal plant site in the Hunter region of New South Wales.
• AGL's August 2026 results said the battery began operating in July and that construction of its Tomago battery was well under way.

August 2026 - Quinbrook Reaches Financial Close On Supernode Stage 3

• A release dated 15 August 2026 said Supernode Stage 2 had completed commercial operation and Stage 3 reached financial close on A$469 million of debt.
• Stages 1 to 3 are set to reach 780 MW and 3,074 MWh at Brendale, north of Brisbane, with about A$1.2 billion of total financing.
• CATL supplies the storage systems, and the partners are considering an eight-hour product for later stages.

January 2026 - Origin Energy Starts Commercial Operations At Eraring Battery

• Origin Energy reported in January 2026 that stage 1 of the Eraring battery, at 460 MW and 1,770 MWh, had begun commercial operations.
• Stage 4, backed by A$80 million of Origin funding and supplied by Wärtsilä, adds 360 MWh and is due online in the first quarter of 2027.
• The full project totals 700 MW and 3,160 MWh beside the Eraring coal-fired power station.

September 2025 - Big Canberra Battery Reaches Transformer Milestone

• The ACT Government said in September 2025 that a transformer had arrived at the Williamsdale site of the Big Canberra Battery.
• Built with Eku Energy, the battery will supply at least 250 MW, enough for about one-third of Canberra for two hours at peak.
• Operations are expected in 2026, giving the territory its first large grid battery of this scale.

Key Insight

The sequence shows a shift from planning to delivery. Coal-site batteries reached full operation, staged financing closed in Queensland, and territory projects advanced, even as price spreads narrowed.

Australia Energy Storage Systems (ESS) Industry Segmentation

The Expert Market Research’s report on the Australia Energy Storage Systems (ESS) Market offers a detailed analysis of the market based on the following segments.

Market Breakup by Technology

• Lithium Iron Phosphate
• Lithium Nickel Manganese Cobalt
• Flow Batteries
• Pumped Hydro
• Others

Lithium Iron Phosphate leads because four-hour grid projects and large household systems favour its safety and cycle life, and Tender 8 in June 2026 awarded 16,074 MWh of mostly four-hour battery capacity. Flow Batteries grow fastest at an estimated 15.4% CAGR through 2035, led by the Kalgoorlie plan of November 2025. Pumped Hydro advances as Genex Power's 250 MW Kidston project slipped to July 2027 in May 2026. Lithium Nickel Manganese Cobalt persists in older household units but loses share. Others include sodium-ion, compressed air and thermal storage, which remain at pilot scale.

Market Breakup by Application

• Utility-Scale Grid Storage
• Residential
• Commercial and Industrial
• Community and Remote Microgrid
• Others

Residential leads revenue because the Clean Energy Regulator validated about 193,000 program batteries holding 4.6 GWh between July and December 2025, and average usable size reached 30.6 kWh in the March 2026 quarter. Utility-Scale Grid Storage grows fastest at an estimated 11.6% CAGR through 2035, as Tender 8 added 4,205 MW in June 2026. Commercial and Industrial covers business batteries averaging 36.2 kWh in late 2025, and Sungrow's distributor deal of November 2025 earmarked 150 MWh for it. Community and Remote Microgrid is helped by Horizon Power rebates of up to A$3,800, reported in May 2026.

Market Breakup by Discharge Duration

• Up to 2 Hours
• 2 to 4 Hours
• 4 to 8 Hours
• Over 8 Hours
• Others

2 to 4 Hours leads because four-hour designs, such as AGL's Tomago battery started in December 2025, dominate tenders and most household systems discharge within this band. Over 8 Hours grows fastest at an estimated 13.8% CAGR through 2035, supported by the 15-hour Phoenix pumped hydro award in New South Wales in February 2025 and Western Australia's 10-hour flow plan. 4 to 8 Hours includes Origin's Eraring battery, which averages 4.5 hours, and eight-hour awards to Eku Energy and Enervest. Up to 2 Hours includes AGL's two-hour Liddell battery, fully operational in September 2026, and frequency-focused assets.

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Western Australia
• South Australia
• Others (incl. Tasmania, ACT and Northern Territory)

New South Wales dominates, anchored by Akaysha's Waratah battery and AGL's Liddell battery, both fully operational in September 2026, and grows at an estimated 9.0% CAGR. Queensland is fastest at an estimated 10.7%, after winning six Tender 8 projects in June 2026 and Quinbrook's Supernode financing in August 2026. Western Australia grows at 10.2%, with Neoen's Collie battery reaching 560 MW from July 2025. Victoria, at 8.7%, saw Mornington BESS reach full output in the June 2026 quarter. South Australia, at 8.3%, has two Potentia projects in Tender 8. Others, at 9.5%, includes the Williamsdale battery in the ACT, and Tasmania and the Northern Territory.

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If you choose to purchase the full report at a later stage, the amount already paid will be adjusted, and you will only need to pay the remaining balance.

Competitive Landscape in the Australia Energy Storage Systems (ESS) Market

Competition combines global battery suppliers, integrators, utility-owned developers and independent asset owners. Entry barriers include grid connection access, contracted revenue from tenders, supply of large battery systems and the capability to operate assets in energy and ancillary markets.

Tesla

Tesla, headquartered in Austin, Texas, was incorporated in 2003 and sells Megapack utility batteries and Powerwall home batteries in Australia. In July 2025 Energy-Storage.News reported 324 Megapack 2XL units being delivered for Stanwell's 300 MW and 1,200 MWh battery near Rockhampton, which reached full output in the June 2026 quarter. Megapacks also equip the 600 MW Melbourne Renewable Energy Hub in Victoria, built by Equis with the State Electricity Commission.

Neoen

Neoen, headquartered in Paris, was founded in 2008 by Xavier Barbaro and has been wholly owned by Brookfield since a squeeze-out completed on 4 April 2025. Its Collie battery in Western Australia reached 560 MW and 2,240 MWh after Stage 2, built in about 15 months, began operating in July 2025. AEMO contracted the project for essential system services, and Neoen also owns the Blyth battery in South Australia and the Hornsdale Power Reserve.

AGL Energy

AGL Energy, headquartered in Sydney, traces its origins to the Australian Gas Light Company formed in 1837 and runs a flexible fleet of 8.7 GW. It broke ground on the 500 MW and 2,000 MWh Tomago battery near Newcastle in December 2025 at a cost of A$800 million, with Fluence as engineering and construction contractor, and declared its 500 MW Liddell battery fully operational in September 2026.

Origin Energy

Origin Energy, headquartered in Barangaroo, Sydney, was formed in February 2000 and owns the Eraring power station in New South Wales. Stage 1 of its Eraring battery, 460 MW and 1,770 MWh, began commercial operations in January 2026 with Wärtsilä among its contractors, and Origin committed A$80 million to stage 4, adding 360 MWh for the evening peak. The full battery reaches 700 MW and 3,160 MWh.

Other players operating in the Australia energy storage systems (ESS) market include Akaysha Energy, Fluence, Wärtsilä, Sungrow, and Quinbrook, alongside independent developers, battery integrators, installers and distributors supplying household, commercial and grid-scale storage across Australia.

Key Insight

Competition rests on grid connections, contracted revenue, battery supply and operating skill rather than price alone. Utilities, global suppliers and independent owners compete, and tenders favour proven delivery records.