Batteries Undercut Gas Turbines on Cost in Australia
Four-hour battery systems have moved below open-cycle gas turbines in capital expenditure as gas turbine costs climb.
Updated on Nov. 6, 2026 in Energy
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Four-hour battery systems have fallen below open-cycle gas turbines in capital expenditure in Australia, as battery costs resume their decline and gas turbine costs rise sharply. Australia's grid-scale battery pipeline rose 79% in one year to 26.1 GW.
Why it matters
Batteries respond in fractions of a second and can absorb excess solar generation, while gas turbines respond more slowly and cannot consume surplus electricity. Rising gas turbine costs and lead times of more than five years in some markets are shifting the economics of new firming capacity.
Australia's grid-scale battery pipeline rose 79% in one year to 26.1 GW, with approximately 18.2 GW designed with grid-forming capabilities. Gas turbine lead times exceed five years in some markets, and multi-day renewable droughts remain uneconomical for battery systems.
The players
CSIRO
The Commonwealth Scientific and Industrial Research Organisation is Australia's national science agency, whose projections on gas turbine costs and gas generation share are cited in this analysis.
The details
Batteries generate revenue across frequency control, wholesale arbitrage and network services at the same time, and they switch rapidly between charging and discharging. Battery costs have resumed their decline after disruptions in 2022 and 2023, while gas turbine costs are rising because demand from data-center developers and utilities outpaces manufacturing capacity.
Timeline
2022 and 2023: Battery cost decline was disrupted.
Around 2035: CSIRO does not expect gas turbine costs to normalise.
2050: CSIRO projects gas technologies will contribute 3 to 7 percent of Australian electricity generation.
Season Trajectory
CSIRO projects gas technologies will supply 3 to 7 percent of Australian electricity by 2050, a forecast that now sits alongside batteries overtaking open-cycle gas turbines on capital cost. The crossover points to a shift in how Australia's grid firming capacity is likely to be built out over the coming decades.
Australian households and businesses are likely to see new firming capacity built around batteries rather than gas peakers as costs shift. Rising gas turbine prices and multi-year lead times may affect the timing and cost of grid projects that depend on them.
The takeaway
Battery storage is now the lower-cost option for four-hour firming in Australia, so grid planners and investors should weigh it against gas turbines for new capacity. Gas peakers may need higher capacity payments to remain financially viable as price spikes flatten.
Further reading
Explore more on Energy developments across Australia's grid.
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