Battery Energy Storage Systems (BESS) – This is a primary focus, with several gigawatt-hour-scale projects commencing operations or advancing development such as the first stage of the 700 MW / 3,160 MWh Eraring battery in NSW which began operation in January 2026.
The $200 million Brendale battery in Queensland and projects in Victoria and South Australia by Energy Australia are expected to be operational by late 2026 or 2027 with an estimated 1,400 home batteries being installed daily, supported by the $7.2 billion Cheaper Home Batteries Program.
Renewable Energy Capacity Expansion – The Federal Government’s Capacity Investment Scheme (CIS) with Tender 4 aiming to allocate an additional 6 GW of renewable generation across the National Electricity Market (NEM) with the International Energy Agency (IEA) forecasting capacity to reach 6 GW in 2026. Construction is underway for the 288 MW Palmer Wind Farm in South Australia, expected to power approximately 142,000 homes.
Solar energy provides over 60% of the total power in the National Electricity Market (NEM), with total renewables (wind and hydro) meeting up to 76.6% of demand.
Government Policy and Investment – The Federal Government’s “Future Made in Australia” agenda is providing significant investment, including:
- A $2 billion expansion of the Clean Energy Finance Corporation (CEFC) to unlock $8 billion in further investment.
- Production tax incentives for hydrogen and critical minerals.
- The Green Iron Investment Fund and Green Aluminum Production credit to support heavy industry’s transition.
Grid Integration – The Australian Energy Market Operator (AEMO) is focused on reforms to ensure grid reliability as coal-fired power stations retire and allow Virtual Power Plants (VPPs) to compete directly with traditional generators. There is a strong focus on building new transmission links (e.g., in Victoria and South Australia) to connect renewable energy zones and alleviate bottlenecks.
Green Hydrogen and Industrial Electrification – Victoria is leading projects like the Hydrogen Park Murray Valley. This will feature the largest electrolyser on the Eastern seaboard, supporting development of a renewable hydrogen industry for transport and other sectors.
Other projects include the Energy Renewable Hydrogen Production Facility in Hastings, Victoria, and Hydrogen Jobs Plan power plant (Whyalla, South Australia) both anticipated to begin operations in 2026 and Murchison Green Hydrogen Project in Western Australia expected to reach a Final Investment Decision (FID)late 2026, targeting ammonia exports.
Virtual Power Plants (VPPs) – An incentive scheme for early participants in VPP reforms begins in April 2026, allowing aggregated household resources like batteries and EVs to compete directly with large-scale generators.
Electric Vehicles (EVs) – The EV market is set for major changes with new models and competitive pricing in 2026, with tax breaks are under review, and a road-user charge being considered.
