Last summer, Australia\u2019s electricity grid underwent a quiet but consequential shift. <\/p>\n
Across the east coast, gas-fired power stations \u2013 long viewed as the only way to keep the grid functioning on our hottest or coldest days \u2013 barely ran<\/a>. <\/p>\n The amount of energy generated by fossil gas this year dropped to its lowest point<\/a> in 25 years<\/a>. Batteries are now filling this gap, as a cheaper, cleaner<\/a> alternative at peak times.<\/p>\n And wholesale electricity prices are 47% lower<\/a> than this time last year, thanks to record renewable and battery<\/a> generation.<\/p>\n This shift sits at the heart of the CSIRO\u2019s latest GenCost report<\/a>, which tells a story of two technologies heading in opposite directions: batteries getting cheaper and gas getting more expensive.<\/p>\n The steady shift away from coal<\/p>\n In Australia, most of our electricity historically came from coal<\/a>. But each year we\u2019re becoming less reliant on this finite and polluting resource. Coal usage has dropped by 25%<\/a> in the past decade. In the first three months of 2026, renewables supplied a record 45%<\/a> of electricity in Australia\u2019s east coast grid.<\/p>\n This matters because electricity generation produces 32%<\/a> of Australia\u2019s carbon emissions<\/a>. These emissions are worsening climate change<\/a>, leading to more extreme weather and leaving many Australians physically and financially vulnerable<\/a>. <\/p>\n Our coal power stations are also ageing<\/a>. Like an old car, these stations are now breaking down<\/a> more often and becoming more expensive to fix. When coal plants suddenly go offline<\/a>, it pushes electricity prices up.<\/p>\n The federal government is aiming for 82% renewable energy<\/a> by 2030 nationally. To meet that target, we must develop new wind and solar projects. But we also need new \u201cfirming<\/a>\u201d technologies, such as batteries and pumped hydro, to make sure we always have energy available.<\/p>\n Read more: Batteries are getting cheaper<\/p>\n The latest GenCost report<\/a> confirms that renewables, backed by batteries, are the cheapest source of new electricity.<\/p>\n Critically, the cost of big, grid-scale batteries fell by 11\u201316%<\/a> in 2025. And the CSIRO expects costs to keep dropping each year. This is because we get better at building these technologies as we build more of them.<\/p>\n More batteries<\/p>\n Across power grids, electric vehicles, computers and phones, we\u2019re installing more<\/a> and more batteries each year. Between 2024 and 2025, global battery storage capacity jumped by 40%<\/a>. Australia is leading the charge, ranking third<\/a> in the world for battery installations. <\/p>\n Plummeting costs<\/p>\n Battery costs have fallen more than 99%<\/a> since 1991. More streamlined supply chains<\/a> and economies of scale<\/a> have made this battery boom possible. <\/p>\n Research shows each time global battery storage doubles, the cost of manufacturing battery cells drops by 21%<\/a>. In the future, this may boost the development of new battery technologies<\/a>. This self-supporting cycle means the cheaper batteries get, the more ways we can use them. And the more we use them, the cheaper batteries are to make.<\/p>\n Read more: Gas is getting more expensive<\/p>\n Gas plants rely on gas turbines. Unlike batteries, gas turbines are produced in relatively small numbers by only a handful<\/a> of global manufacturers. This is because they are complex machines that often require specialised materials<\/a>. <\/p>\n Demand for new gas turbines was low<\/a> for the past decade<\/a>. But it\u2019s now increasing<\/a>, largely due to the data centre boom in the United States. Power demand for data centres is already pushing up prices<\/a>. Major gas turbine manufacturers are warning it will now take four years<\/a> just to make and deliver a new turbine.<\/p>\n Gas plants also face other challenges. Gas is not always available at critical times<\/a>. Australia\u2019s newest gas turbine, Kurri Kurri<\/a> in New South Wales\u2019 Hunter Valley, only has enough available gas to run for about ten hours at a time and reportedly takes more than 24 hours to refuel. This makes it less flexible and more expensive<\/a> than new eight-hour batteries<\/a>.<\/p>\n Another challenge is the high cost of gas sourced from fossil fuels. As Australia\u2019s gas exports grew<\/a>, domestic gas prices surged to international levels. To date, this has been the main factor<\/a> driving up household electricity prices. <\/p>\n Together, these challenges mean the cost of gas generation is unlikely to drop anytime soon.<\/p>\n Read more: A balancing act<\/p>\n To be clear, gas turbines may still be valuable in future. <\/p>\n As Australia makes its clean energy transition, batteries will increasingly do the heavy lifting<\/a>. But my research<\/a> shows the grid will likely need stored fuel for backup power generation, for example if a stretch of cloudy, windless days<\/a> coincides with high demand. This may even involve building extra gas turbines, but using them less often<\/a> as emergency generators for the grid. <\/p>\n However, these turbines cannot run on fossil gas going forward. Over the next 10\u201320 years, global carbon constraints<\/a> will require us to transition from<\/a> fossil fuels. Instead we can use alternative fuels<\/a> such as biodiesel<\/a>, a biodegradable fuel made from vegetable oils or animal fats. Green hydrogen<\/a> from renewable energy or green methanol<\/a> produced from agricultural and forestry waste are other options. This transition makes further investment in fossil fuel infrastructure, such as gas pipelines or gas fields, much riskier.<\/p>\n In the meantime, the incredible surge of batteries in our homes, cars and broader network means our grid is already shifting away<\/a> from gas. That\u2019s promising news, both for our planet and our hip pockets<\/a>.<\/p>\n
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