Are Batteries Stabilising the Grid?

The Story So Far

In July 2025, the Albanese Government launched the "Cheaper Home Batteries" program with a $2.3 billion commitment. By December, that had grown to $7.2 billion. The uptake was explosive: 184,672 batteries installed in just six months, adding 4.27 GWh of storage capacity to Australian homes — enough to power Tasmania for over 3.5 hours during typical evening demand.

But here's the question everyone's asking: Is it actually making a difference?

We've analysed 24 months of AEMO 5-minute dispatch data (January 2024 – December 2025) to find out. The results suggest the answer is yes — but with important caveats about what happens next.

What the Data Shows

The chart below shows the relationship between home battery installations (blue line) and wholesale price spikes (stacked bars) over 24 months. Pay attention to what happens after July 2025 when the federal rebate launched.

The pattern is striking: as battery installations nearly doubled from ~140,000 to ~271,000 between Winter 2024 and Winter 2025, price spikes dropped by over 50%. Same season, same demand drivers, different outcome.

What Is a Wholesale Price Spike?

Unlike your fixed retail electricity rate, the wholesale electricity market operates in real-time. AEMO (the Australian Energy Market Operator) runs an auction every 5 minutes where generators bid to supply electricity. When demand exceeds supply — typically between 5-8pm on cold winter evenings or hot summer afternoons — prices can surge from the typical $50-100/MWh to over $1,000/MWh, sometimes hitting the market cap of $17,500/MWh.

Most households never see these spikes because their retailer absorbs them. But if you have a battery with wholesale electricity access (through providers like Amber Electric), you can export stored solar energy during these spikes and pocket the difference. A 10kWh battery discharged during a $5,000/MWh spike earns $50 in a single hour — versus ~$0.50 at normal prices.

What Causes Wholesale Price Spikes?

Price spikes occur when electricity supply can't keep up with demand. Common triggers include:

• Coal plant outages: Unplanned shutdowns (like Yallourn's June 2025 boiler collapse) remove hundreds of megawatts instantly
• Extreme weather: Heatwaves drive air conditioning demand; cold snaps drive heating demand
• Wind droughts: When wind generation drops unexpectedly, other sources must fill the gap
• Gas supply issues: Gas peaking plants are meant to handle demand surges, but supply constraints limit their response
• Evening solar cliff: Solar generation drops to zero just as households arrive home, cooking dinner and heating/cooling

This is where home batteries come in. By discharging stored solar during these peak demand periods, they add supply to the grid exactly when it's needed most — reducing the supply-demand imbalance that causes price spikes.

How We Define Price Spike Severity

The chart uses colour-coded bars to show spike severity. Each bar segment represents the number of 5-minute intervals where wholesale prices exceeded a threshold:

Notice how the extreme spikes (dark red) have dropped significantly since mid-2025. This is the pattern we'd expect if home batteries are having an effect — they add supply during peak demand, preventing prices from reaching extreme levels.

A Note on Causation

We can't prove causation with certainty. Other factors may have contributed: different weather patterns, coal plant availability, demand changes. But the correlation between battery growth and spike reduction is compelling, and the mechanism is well understood — batteries discharge during peak demand, reducing the supply shortage that causes price spikes.

State-Level Analysis

Price spike patterns vary significantly by state. Use the dropdown below to explore how different regions of the National Electricity Market (NEM) have been affected — and where battery arbitrage opportunities are greatest.

What the State Chart Shows

This chart displays the same data as above, but filtered by NEM region. The stacked bars show price spike frequency and severity (how many 5-minute intervals exceeded each threshold), while the "Est. Earnings" line shows what a typical 5kWh battery could have earned that month through wholesale arbitrage.

Select "All States" to see the national picture, or choose a specific state to see regional patterns. Notice how Victoria dominates during winter months (June-August) while South Australia and Queensland show more consistent year-round volatility driven by their high renewable penetration.

Regional Patterns Explained

Case Study: The June 2025 Victoria Crisis

If you want to understand why home batteries matter — and why wholesale electricity access can be so lucrative — look no further than June 8-13, 2025. Victoria experienced a "perfect storm" that pushed the grid to its limits and sent wholesale prices to the market cap.

It started with a boiler collapse at Yallourn power station on June 8, taking 380 MW (25% of the station's capacity) offline without warning. Normally, other generators would fill the gap. But this coincided with a cold snap (0-3°C temperatures across Victoria), an "abnormally still" wind drought, and technical problems at the Longford gas facility — Victoria's main gas supply.

With demand surging (everyone cranking up their heaters) and supply falling (coal, wind, and gas all struggling), prices had nowhere to go but up.

The result? Victoria consumed 4,668 terajoules of gas in 5 days — that's 83% of AEMO's entire annual forecast for unplanned gas consumption burned through in less than a week. The wholesale electricity market hit the $17,500/MWh price cap repeatedly, and AEMO issued a "Lack of Reserve" warning — the last step before load shedding (rolling blackouts).

What Battery Owners Earned

For households with batteries and wholesale electricity access (through providers like Amber Electric), this crisis was an earnings opportunity. The math is simple: when you can export stored solar at $17.50/kWh instead of the usual $0.05-0.10/kWh, even a modest battery discharge can earn substantial returns.

During a similar crisis in February 2024 (when the market cap was lower at ~$15,000/MWh), Amber Electric reported their battery customers earned impressive returns:

• Average Victorian battery customer: $106 in a single day
• Top exporter: $578 in a single day
• 11 customers earned over $300 each

For June 2025, with the higher market cap ($17,500/MWh vs ~$15,000/MWh), earnings would have been even higher. A 13.5kWh Tesla Powerwall fully discharged during a single hour at the cap would earn $236 — in one hour.

The Closing Window

As more batteries stabilise the grid, the lucrative price spikes that fund VPP earnings become rarer. Winter 2024 had significantly more spike events than Winter 2025. The data suggests this trend will continue.

This isn't a reason to avoid batteries — it's a reason to understand your decision with honest, current data rather than projections based on a market that no longer exists.

What This Means for Your Battery Decision

If you're considering a battery for wholesale arbitrage, the next 2-3 years likely offer the best returns. As more batteries stabilise the grid, the golden age of $500+ single-day earnings may not last forever.

But here's the nuance: arbitrage isn't the only reason to buy a battery. Backup power, self-consumption of solar, and time-of-use optimisation all provide value regardless of grid conditions. The question is whether you're modelling your payback period based on current spike frequency or assuming 2024-era volatility will continue for 10 years.

Frequently Asked Questions