Key facts
- Gas generation during Australia's evening energy peak fell by 67% in the year to August.
- Large-scale batteries and home battery installations are increasingly meeting dispatchable power needs.
- Batteries met 49% of evening grid power needs in August 2026, up from 0.4% in 2020.
- Gas generation's share of evening power needs dropped from 65.9% to 20.6% between 2020 and August 2026.
- Wholesale electricity prices have fallen in response to increased battery use.
Australia's reliance on gas for electricity during the critical 5 p.m. to 8 p.m. energy peak has dropped by 67% in the past year, according to EnergyEdge analysis. This significant decline is attributed to the rapid deployment of large-scale batteries and half a million home battery installations, which are increasingly meeting dispatchable power needs.
Gas generation between 5 p.m. and 8 p.m. fell by 67% in the year to August, as batteries came online and replaced the fossil fuel. EnergyEdge managing director Josh Stabler stated that batteries, both large and small, recorded their highest peak output on record due to rapid uptake, calling it the fastest installation rate of any electricity asset ever.
The EnergyEdge report indicated that batteries have taken over the evening peak demand. In August 2026, batteries met 49% of the grid’s dispatchable power needs during the evening, a substantial increase from 0.4% in 2020. Conversely, gas generation's contribution fell from 65.9% to 20.6% over the same period.
This shift has led to a decrease in wholesale electricity prices, benefiting households. However, it poses a potential challenge for future investment in new dispatchable power sources. The Australian Energy Market Operator's recent quarterly data also showed a similar trend, with gas generation recording its lowest second quarter average in over two decades, with declines most pronounced during the evening peak.
Alison Reeve, energy and climate change program director at the Grattan Institute, noted that utility-scale batteries are effectively absorbing surplus renewable energy during the day and displacing gas during peak demand. She described this as positive news that flattens the load curve and reduces system volatility. While lower volatility is beneficial for prices long-term, the declining demand and increased uncertainty could make gas more expensive and less profitable during the times it is most needed, such as cold winter weeks. Reeve highlighted that gas generators will remain crucial as backup during periods when renewable sources cannot meet demand, particularly in southern states during winter. She emphasized that the role of gas generators is undergoing a transition, and understanding this shift is key to managing the process effectively and avoiding increased costs.