Australia’s energy transition has moved beyond adding capacity. With large thermal plants retiring, the focus has shifted to essential system services that keep the grid stable and operable as renewable penetration rises.
Securing a decarbonized grid: the challenge beyond megawatts
Essential system services include system strength, inertia and fast fault response. Historically, synchronous thermal generators provided these services as a byproduct of producing electricity. As coal units such as Eraring move toward retirement or delayed closure, the National Electricity Market faces reduced inertia, weaker short circuit levels and slower fault recovery. Those gaps raise risks for frequency stability, voltage control and secure operation during disturbances.
Grid-forming BESS: advanced solutions for stability
Grid-forming battery energy storage systems operate differently to traditional generators. They can establish voltage and frequency references, provide virtual inertia and respond within milliseconds to faults. Deployed as non-network options, grid-forming BESS can deliver both energy and the suite of essential services needed to replace lost synchronous capability. Their fast deployability, modularity and controllability make them a practical option to maintain system strength while renewables scale.
Policy and procurement: Australia’s blueprint for a stable renewable grid
Accelerating grid-forming BESS at scale requires clear technical standards and procurement frameworks from AEMO and AEMC, informed by industry bodies such as the Clean Energy Council and the Australian Energy Council. Reforms should specify performance metrics for inertia, short-circuit contribution and ride-through capability, and create market signals or contracts that pay for services rather than only energy. Robust testing, certification and non-network procurement pathways will unlock private investment and competitive delivery.
Australia has a unique chance to define global best practice. The NEM’s high renewable ambition, active regulators and engaged industry can pilot technical rules and contracting approaches that other systems can adopt. Pairing these reforms with data-driven and AI-enabled optimization will speed deployment and improve operational coordination, helping to secure a low-carbon, resilient grid for the years ahead.
