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Akaysha Energy’s Anna Fagan is urging Australia to establish system-security contracts and clearer procurement rules for grid-forming batteries. She says trials have been completed, but the source report also notes that some capabilities, including protection-quality fault current, remain under testing and are not yet confirmed.
Akaysha Energy has called on Australian policymakers and market bodies to create system-security contracts for grid-forming battery storage, arguing that clearer service definitions and procurement rules are needed to bring the technology into wider use. Speaking at an industry event, Akaysha policy executive Anna Fagan said trials had been carried out, while the report notes that some grid-security capabilities remain under test and are not yet confirmed.
Fagan set out four changes she wants: formal recognition of the services within market rules, consistent service definitions across states, transparent and structured procurement, and clearer accountability among the organisations responsible for the electricity market. She said several of those issues were under consideration through Australian Energy Market Commission rule-change processes. Her stated aim was for the market to begin demonstrating by the middle of 2027 that the services can be delivered at scale.
She pointed to Akaysha’s Waratah Super Battery in New South Wales as an example of storage supporting the grid. The project is linked to the state’s System Integrity Protection Scheme and can discharge when transmission operator Transgrid needs it. Fagan said that arrangement can help increase the amount of power carried on transmission lines without building new lines. She said similar questions could feature in Victoria’s debate about transmission investment after its state election.
The call comes as Australia’s battery fleet and project pipeline expand. Fagan said utility-scale battery storage was projected at just 3MW in 2026 in a 2016-era national transmission plan, compared with about 8GW operating now. She said the system would need 40GW to 50GW of storage by 2040. Those figures were her account of the scale of growth required; the Australian Energy Market Operator’s 2026 Integrated System Plan separately calls for almost 40GW of storage by 2050, including 5GW of long-duration storage.
Contracts Could Open Grid Services
System-security contracts could give battery developers a defined route to earn revenue for services beyond buying electricity when prices are low and selling when they rise. That matters because batteries can provide rapid responses to changing grid conditions, but investment depends on whether the services are specified, measured and paid for consistently. Fagan’s proposals address the rules and procurement structures that would determine whether projects can count on such income.
The issue is linked to the retirement of coal generation. Fagan said Australia needs confidence that grid-forming batteries can supply required security services before coal units close. If procurement and qualification are delayed, the market may have fewer options to replace services currently supplied by conventional generators. The source report does not establish that batteries can already replace every such service; it describes a mix of operating arrangements, policy proposals and ongoing technical testing.
Revenue certainty also affects project financing and technology choices. Envision Energy’s Doris Spielthenner said fewer power purchase agreements had recently been completed and some financial closes were delayed, partly because developers lacked a system-security market against which to value projects. She argued that four- and eight-hour batteries need additional revenue streams to support the higher cost of longer-duration systems. That is a market participant’s assessment, not a confirmed explanation for every delayed project.
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Australia’s Rules Lag Battery Growth
Australia’s National Electricity Market is adding battery projects as coal generation is expected to retire over time. The AEMO’s 2026 plan calls for almost 40GW of storage by 2050 and includes 5GW of long-duration energy storage. The same plan anticipates most remaining coal generation withdrawing by 2038. These forecasts make the question of how batteries are recognised and paid for relevant to both investment and the operation of the grid.
Grid-forming inverters are intended to help batteries contribute to aspects of grid stability, but progress on their acceptance has not been uniform. According to AEMO data cited in the report, grid-forming designs account for about 74% of a 33.2GW battery pipeline in the National Electricity Market. Transgrid has opened a pathway for up to 900MW of grid-forming batteries to count toward New South Wales’ minimum system-strength requirements. AEMO, however, has said grid-forming batteries have not yet been confirmed to provide protection-quality fault current and that a trial is underway.
Fagan also called for policy signals on investment and coal closures. The federal government had opened consultation on draft legislation for an Electricity Services Entry Mechanism, intended to replace the Capacity Investment Scheme, alongside a market-making obligation. Fagan said passage of the mechanism would provide an entry signal for investment, while state plans for managing coal exits would provide a clearer signal about when existing capacity is expected to leave.
““The best test is always going to be the banks.””
— Doris Spielthenner, Envision Energy
Technical Qualification Still Pending
It is not clear from the report whether or when Australian market bodies will introduce the contracts Fagan wants, or how proposed services would be measured, priced and procured across jurisdictions. Several related questions are being discussed through rule-change processes, but no final market-wide framework is described.
Technical readiness also differs by service. Transgrid has created a route for some grid-forming batteries to contribute to New South Wales’ minimum system-strength requirements, while AEMO says protection-quality fault current has not yet been confirmed and remains the subject of a trial. The source does not give a completion date or outcome for that work. Fagan’s statement about trials should therefore not be read as confirmation that every service is ready for commercial use.
The scale and timing of future investment remain uncertain as well. The cited storage targets are plans or estimates, not guarantees that projects will be built. The report also does not specify the final contents or timetable for the federal ESEM legislation, or how coal closure plans will develop in each state.
Rule Changes and Trials Ahead
The next developments to watch are the AEMC’s rule-change processes, the federal consultation on draft ESEM legislation and a market-making obligation, and AEMO’s trial of protection-quality fault current from grid-forming batteries. Those steps could clarify which services qualify, how they are procured and what evidence projects must provide.
Fagan’s proposed milestone is to begin demonstrating delivery at scale by mid-2027. Whether that timetable is met will depend on rulemaking, procurement design and the outcome of technical work. State decisions on transmission and coal retirement will also shape where batteries are needed and the services they may be asked to provide.
Key Questions
What is Akaysha asking Australian policymakers to do?
Akaysha Energy’s Anna Fagan wants system-security contracts for grid-forming batteries, alongside formal service definitions, consistent rules across states, transparent procurement and clearer accountability.
Are grid-forming batteries already confirmed to provide all required services?
No. The report says Transgrid has opened a pathway for batteries to count toward some New South Wales system-strength requirements, but AEMO says protection-quality fault current has not yet been confirmed and remains under trial.
Why does Akaysha say contracts are needed?
Contracts could define and pay for grid-security services, giving developers a clearer way to earn revenue and helping investors evaluate battery projects. The report also describes concerns from industry participants about gaps in revenue mechanisms, particularly for longer-duration batteries.
What is the Waratah Super Battery’s role in the discussion?
Fagan cited the New South Wales battery, which is linked to the System Integrity Protection Scheme and can discharge when Transgrid needs it, as an example of storage helping increase transmission-line output without constructing new lines.
What happens next?
Relevant next steps include AEMC rule-change work, federal consultation on the proposed Electricity Services Entry Mechanism and a market-making obligation, and AEMO’s technical trial. Fagan said the goal should be to demonstrate the services at scale by the middle of 2027.
Source: energy-storage.news
