Australia’s dependence on gas generation during evening energy peak falls by almost 70%

Australia’s dependence on gas for power during the evening, when the grid is under the most pressure, has fallen by almost nearly 70% over the past year as batteries surged in, replacing the fossil fuel.

Gas generation during the busy early evening, between 5pm and 8pm, fell by 67% in the year to August, as large-scale batteries continued to come online and half a million home batteries were installed under the government’s subsidy program, analysis by consultancy EnergyEdge found.

The company’s managing director, Josh Stabler, said batteries big and small recorded their highest peak output on record, off the back of rapid uptake.

“The rate of installation of batteries in Australia is the fastest uptake of any electricity asset ever – faster than solar, faster than wind,” he said.

According to the EnergyEdge report: “batteries have taken the evening peak, and they’re not giving it back”. Batteries met 49% of the grid’s dispatchable power needs during the evening in August 2026, up from 0.4% in 2020. In contrast, gas fell from 65.9% to 20.6% over the same period.

Wholesale electricity prices fell in response – a win for households – but potentially a problem for future investment in new dispatchable power.

Recent quarterly data (April to June) from the Australian Energy Market Operator highlighted a similar pattern, with gas generation recording its lowest Q2 on average in more than two decades. Gas power declined in all regions, the AEMO said, with the fall “most evident” during the evening peak.

The Grattan Institute’s energy and climate change program director, Alison Reeve, said utility scale batteries were increasingly mopping up surplus renewable energy in the middle of the day and displacing the role of gas during the peak.

“Overall, this is super good news. What you actually end up doing is flattening out the load curve over the day,” she said, and that reduced volatility in the system.

In the longer term, less gas and lower volatility should be good for prices, she said. Although the declining demand and added uncertainty could make gas more expensive and less profitable at those times when it was needed – in those few dark, still and cold weeks in winter.

“That’s kind of the challenge that is coming for gas,” she said. “We know that gas generators are going to be important, because they’re going to be the backup when you get those two weeks in winter where solar, wind and batteries can’t carry you through.”

AEMO’s 20-year roadmap, the Integrated System Plan, anticipated gas would play “a more strategic, back-up role, with flexible generators that can also provide system security service” in future. “This is more likely to be in winter, especially in the southern states, when shorter days reduce solar output, and when more electricity is needed for longer and colder nights.

“Gas is going through a transition and its whole role is going to change,” Reeve said, a shift that would affect the amount of gas needed, the number of generators and the running costs. “The sooner that we actually grasp that the future for gas generators is going to look nothing like the past, the better we will be at managing that whole process and making sure it doesn’t end up costing people a lot of money.”