New National Electricity Market data shows solar-charged batteries are discharging at record volumes, displacing high-cost gas generation and successfully flattening the solar duck curve. This market impact contributed to a 4.2% week-on-week drop in the NEM average spot price to $55.57/MWh. However, RenewEconomy analysis suggests this price suppression is simultaneously eroding the arbitrage profit margins for the large-scale battery operators responsible for the shift. The changing generation mix was further evidenced by the Tamar Valley CCGT switching off on Thursday after a 30-day operational run, as noted in WattClarity analysis.
Meanwhile, the pipeline of new storage and generation continues to deliver the assets driving these market changes. In New South Wales, OX2 has commenced construction on the 119 MW Muswellbrook Solar Farm and its co-located 156 MW/312 MWh battery. The project is the first major generation and storage asset to begin physical works for connection to the Hunter Renewable Energy Zone. Further north, ACEN Australia is nearing completion of a 50 MW/100 MWh battery adjacent to the 720 MW New England Solar Farm, a milestone that coincides with easing solar curtailment in the region.
Federal policy is also targeting smaller, community-focused projects to broaden the transition's reach. The Australian government's First Nations Clean Energy Strategy pilot program will support two remote renewable projects to reach financial close. This initiative aims to overcome investment barriers for Indigenous-led developments and deliver local economic returns. The focus on regional benefits mirrors a trend among Australian farmers, who are increasingly installing on-site wind and solar to produce their own fertiliser and fuel to mitigate doubled input costs.
Australia's market-led shift toward storage is being echoed by policy changes overseas. Austria announced it will restructure its solar subsidies from 2027 to favour battery storage and energy management over standard PV installations, targeting 8 GW of capacity by 2030. The global scale of solar deployment was highlighted as China’s Jiangsu province surpassed 100 GW of installed capacity. Upstream, Chinese solar wafer prices have risen sharply on strong demand, suggesting a potential end to recent price declines for global component procurement.
Looking ahead, grid operators are bracing for new weather-related challenges. The Bureau of Meteorology is warning that an approaching El Niño weather pattern will have significant implications for the Australian energy landscape this summer. Regulators are also preparing for future system needs, with AEMO opening consultations on reserve capacity security and testing frameworks. Submissions for these key discussions, along with a review of gas participant fees, are due in September.