A recent economic shift in Australia has made long-duration energy storage systems (LDES) more attractive to potential investors and developers, including those developing battery energy storage systems (BESS).
Speaking exclusively to Eku Energy’s chief technology officer Elias Saba earlier this month, ESN Premium reported that various factors, including systems’ cost structure, have enabled a shift toward LDES on the National Electricity Market (NEM).
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The rapid development of Australia’s largest interconnected market has largely focused on opportunities that require shorter durations, namely Frequency Control Ancillary Services (FCAS) for the past few years. However, energy trading is gradually comprising a larger and larger share of the revenue stack BESS can earn, leading to developers going from 1-hour to 2-hour and more recently to 4-hour durations.
Research conducted by Wood Mackenzie backs up this insight. Last year, it found that a 4-hour duration BESS in 2026 could earn an average of AU$263,000/MW (US$163,461/MW) over its lifetime.
LDES itself is a term without universal definition, sometimes defined as applications for 6-hours or more, sometimes 8-hour and 10-hour, depending on the region and market. From an Australian perspective, it is observed as a market push toward 4-hours, but modelling and projections anticipate an impending need for LDES which have already been observed in state-run tenders for 8-hour systems in New South Wales (NSW), for example.
However, despite trends showing a rise in longer durations, there is still uncertainty around effectively increasing battery capacity.
Favourable economics matched with governmental support
For larger BESS to be cost-competitive with other storage options, the technical complexity and additional production costs cannot rise significantly with battery size. The BESS must also guarantee a longer lifespan to offset the longer and more capital-intensive construction process.
Both sodium-ion and vanadium flow batteries have been touted as potential usurpers of battery dominance over the LDES battery market, but both are fairly nascent technologies.
Saba previously said that although the economic drivers and use cases to drive 8-hour duration systems have not yet been established in Australia, they are becoming more prominent in other markets worldwide, such as Italy. However, to see this duration system be nurtured, there needs to be further demand to spur growth.
LDES and the technologies that could dethrone lithium-ion will be featured on the second day of our publisher Solar Media’s Energy Storage Summit Australia 2025, which will take place in Sydney from 18-19 March. You can get 20% off your ticket by following the link here.
With the economics for long-duration storage beginning to shift favourably, Australia’s federal and state governments continue to emphasise the importance of technology in sending the correct market signals to prospective investors. Last week, the Australian Energy Market Operator (AEMO) Services revealed that nearly 14GWh of LDES projects were successful in the latest New South Wales Roadmap competitive tender.
The three successful projects were the 125MW/1GWh Stoney Creek BESS, owned by Enervest, Eku Energy’s 100MW/800MWh Griffith BESS and Acen Australia’s 800MW/11,990MWh ACEN Phoenix pumped hydro energy storage (PHES) site.
It should also be noted that several other 8-hour duration or longer batteries are being explored in Australia. For instance, developer Squadron Energy is seeking to build a 1,200MWh BESS at the site of a 300MW wind project in New South Wales. Ark Energy is also looking to develop a 275MW/2,200MWh solar-plus-storage project in Myrtle Creek, in north New South Wales.
It is also worth noting that German energy company RWE said last year it would continue developing a 50MW/400MWh LDES BESS, which it claimed will be Australia’s first 8-hour BESS. It will sit adjacent to RWE’s existing 249MWac Limondale Solar Farm, about 16km from the nearest town, Balranald in NSW, awarded through the state’s first LDES-specific tender in 2023.
Pumped hydro still favourable despite question marks in Queensland
PHES is one of the more prominent forms of long-duration storage in Australia, with numerous large-scale projects in development including the 2.2GW PHES power station Snowy 2.0 currently under construction in New South Wales.
The New South Wales government has classified this site, along with the 3.6GWh Stratford Pumped Hydro and Solar project and the 2GWh Muswellbrook and 2.6GWh Lake Lyell pumped hydro storage projects, as Critical State Significant Infrastructure (CSSI).
On the other hand, Queensland has had a turbulent few months regarding its PHES sector. Within weeks of being elected in October 2024, the Liberal National Party (LNP) of Queensland, led by premier David Crisafulli, cancelled the world’s largest PHES site, the 5GW/120GWh Pioneer-Burdekin Pumped Hydro Project.
The government cited that the project was “not financially viable, not environmentally appropriate, and the community was never consulted”. A report found that the AU$36 billion project would have led to unnecessary additional costs for Queensland residents, with each household spending AU$15,653.
Following this, the government’s attention quickly shifted towards the Borumba site. In early December, the Queensland government said it was set for crunch talks with Queensland Hydro to “save the project”, citing that its cost had increased to AU$18 billion and had been delayed by three years.
Despite this, the developer, state-owned company Queensland Hydro, is continuing to push on with the development and recently confirmed it is inviting comments on its draft preliminary documentation. The Commonwealth government is assessing this as part of the approval process for the project’s proposed exploratory works.
Multi-day storage to show the ‘true value of LDES’
Wendel Hortop, director of Australia at Modo Energy and a speaker at the upcoming Energy Storage Summit Australia 2025, believes the value of LDES technologies will be unlocked through multi-day storage capabilities, traditionally achieved through PHES.
“As costs decline nationwide, 8-hour durations should be competitive and the cheaper option. When you look at multi-day storage and these other technologies, it really starts to show its value,” Hortop tells Energy-Storage.news.
Hortop also notes advanced compressed air energy storage (A-CAES) technology as a potential solution to unlock the benefits of LDES.
“We recently saw an 8-hour duration A-CAES win a New South Wales government contract alongside two 8-hour duration batteries. We should see more LDES technologies in the next government tenders,” Hortop said earlier this month.
The successful A-CAES project Hortop refers to is Canada-headquartered Hydrostor’s 200MW/1,600MWh Silver City Energy Storage Centre, developed at Broken Hill, a frontier mining town around 1,100km west of Sydney.
