Jason Beer, general manager of Fluence Australia, discusses some of the key energy trends in Australia that are set to influence the development of the energy storage market.
The energy transition is accelerating rapidly, reshaping how electricity is generated, stored, and delivered. As the grid becomes more renewable energy and more digital, the industry is entering an era defined by flexibility, resilience, and smarter system planning.
From policy reform to cyber readiness and community expectations, 2026 will challenge developers, technology providers, and operators to lift both technical performance and social responsibility. Below are eight trends we expect to define the year ahead in Australia.
Renewables will overtake coal as Australia’s dominant source of electricity, accelerating the need for both short- and long-duration storage
Australia is on track for renewables to surpass coal on an annual generation basis, driven by rapid growth in utility-scale solar, wind, and rooftop PV. As this transition accelerates, the system will rely even more heavily on storage solutions to manage variability, firm supply, and provide essential grid services traditionally delivered by synchronous generation.
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Short-duration battery energy storage systems (BESS) will continue playing a critical role in frequency control, congestion management, and shifting solar generation into evening peaks. But as coal exits the system and weather-driven volatility increases, the need for long-duration energy storage (LDES) will become more prominent.
Longer-duration assets can provide longer support during low-renewables periods, mitigate prolonged outages, and strengthen resilience across the National Electricity Market (NEM).
Together, short-duration BESS and emerging LDES solutions will form the backbone of a stable, renewable-powered grid, enabling Australia to retire coal responsibly while maintaining reliability and affordability for consumers.
Policy reforms, with energy storage as a critical tool to facilitate the timely closure of thermal assets
The federal and state energy policy landscape will continue to evolve in 2026, further strengthening investor confidence in large-scale investment and storage projects.
As the year draws to an end, we are eagerly awaiting the NEM Market Settings Review Final Recommendations and further direction from government. Fluence is supportive of further work with industry to consider the detailed design and implementation of NEM-wide reforms that can accelerate the investment in renewable energy and the closure of thermal assets.
As the energy storage market matures, we are eager to see reforms that allow for innovation in technology and hedge contracts that underpin BESS investment and operations.
We are also pleased to see AEMO’s annual report into the Transition Plan for System Security. For the first time, AEMO’s report has brought together a more holistic view of the suite of essential system services needed to operate a safe, secure and decarbonized power system.
In 2026, we hope to see further detail outlining AEMO’s view of the future needs for inertia, system security and Network Support and Control Ancillary Services (NSCAS), along with the technical requirements to make sure the BESS that gets deployed into the Australian grid will be best-placed to support the power system as the grid decarbonises.
Cybersecurity will become a core pillar of project development
As power systems digitalise, cyber resilience is no longer optional. Grid-connected assets now sit at the intersection of critical infrastructure and sophisticated cyber threats. Power systems that were once manually operated and physically isolated are now highly digital, interconnected, and increasingly reliant on software-based controls.
This shift has introduced significant advantages, including enabling faster response times, more efficient system management, and better integration of new technologies. However, it has also placed grid-connected assets at the center of a growing cybersecurity conversation.
In 2026, developers will place greater emphasis on understanding hardware and software exposures, applying international cyber standards, and defining clear divisions of responsibility across the asset lifecycle. Cyber readiness will increasingly be scrutinised by regulators, investors, and insurers alike.
Social licence will be a requirement, not a differentiator
Energy storage is critical for decarbonisation, but large-scale infrastructure projects must also earn trust within the communities that host them. In 2026, early engagement, transparent communication, and credible partnerships will become baseline expectations.
This shift is reflected in initiatives such as the Clean Energy Council’s Best Practice Charter for Renewable Energy Projects. This is a voluntary commitment that sets clear standards for how developers engage with communities, manage impact, and uphold accountability throughout a project’s lifecycle.
Across the industry, we are seeing meaningful progress: workforce inclusion programs, local procurement models, and emerging community ownership structures. It is increasingly evident that developers are working with trusted partners to ensure social responsibility is woven into every stage of project delivery.
For example, Fluence, Blackrock Industries, and AGL are implementing the Second Chance for Change (SCFC) programme at the Liddell BESS in Muswellbrook, New South Wales. This programme provides training, onsite experience, and paid employment pathways for incarcerated First Nations men.
All participants build up personal savings while gaining industry-recognised skills throughout the programme, proving to be a more sustainable form of social impact than short-term grants or sponsorships.
The need for secure and resilient power systems is more important than ever
Recent large-scale blackouts across global power systems have underscored just how critical electricity security is to modern economies and communities. As power systems expand, age, and operate with fewer synchronous generators, the challenges of congestion, stability, and reliability are becoming more pronounced.
According to the International Energy Agency’s Electricity Mid-Year Update 2025, strengthening grid resilience will require a combination of robust infrastructure, secure supply chains, diverse flexibility resources, and advanced technical stability solutions.
As the energy system evolves, stakeholders will need to update operational frameworks. This includes grid codes to reserve requirements, and regulatory structures to ensure the electricity system remains secure, adaptable, and capable of supporting increasingly renewable-heavy portfolios.
Grid-forming projects will define the next wave of deployment
Grid-forming BESS is becoming a global priority. As renewable penetration climbs past 40 percent in several major markets, system operators are moving from exploration to expectation. Draft and confirmed guidance from grid operators now requires, or financially incentivises, grid-forming capabilities for new large-scale storage assets.
The urgency is clear. Traditional synchronous generators, long relied upon for inertia, voltage support, and fault current, are retiring faster than replacement stability resources are being deployed. Grid-forming BESS is stepping in to fill this gap by replicating the stabilising behaviour of synchronous machines, enabling higher levels of inverter-based resources to connect safely and cost-effectively.
Three trends are shaping the next phase of adoption. First, revenue premiums for stability services are becoming more common as system operators recognise the value of grid-forming performance. Second, demonstrated field experience is becoming a critical differentiator in project selection and procurement, reducing diligence burdens and de-risking delivery.
Third, as grid codes tighten, agility in modelling, testing, and compliance is emerging as a decisive factor. Developers increasingly prioritise partners who can navigate evolving standards quickly and accurately, ensuring assets progress through interconnection without delay.
Hybrid solar-plus-storage projects will continue to rise
Hybrid solar-plus-storage projects are rapidly shifting from concept to reality, particularly in land- and grid-constrained markets like Australia. Developers are increasingly developing solar, wind, and battery assets behind a single point of interconnection to maximise renewable energy output, reduce curtailment, and improve project economics.
Regulatory frameworks are adapting to this shift. In Australia, the Integrating Energy Storage Systems rule change provides a strong and flexible foundation for the adoption of hybrid projects. However, the practical realities of hybrid systems is still yet to be tested. This prompts the need for more sophisticated approaches to reactive power management, ramp-rate control, and coordinated grid compliance.
Hybrid architectures are evolving in parallel. DC-coupled systems are gaining traction in markets where capturing clipped energy and optimising interconnection costs is valuable.
As global adoption accelerates, hybrid control is becoming increasingly software-driven. Grid operators expect hybrid plants to deliver predictable performance, fast responsiveness, and advanced grid services. The next phase of growth will be shaped not only by new hybrid capacity but by how effectively these systems integrate into real-world grid operations.
Data centres will rapidly reshape demand patterns and storage opportunities
Data centres are becoming one of the fastest-growing sources of electricity demand worldwide, driven by the expansion of AI, hyperscale cloud services, and high-performance computing. The International Energy Agency forecasts that combined consumption from data centres, AI, and crypto could exceed 1,000TWh by 2026, placing unprecedented pressure on grids and accelerating the need for cleaner, more reliable backup solutions.
As operators look to reduce reliance on diesel generators, BESS are emerging as a compelling alternative. Storage can provide instantaneous backup power, replace or augment traditional UPS systems, reduce peak demand charges, and participate in grid services where regulations allow. For large campuses, BESS also enables black start capability and enhances resilience through fast, flexible response during disturbances.
What matters most in this segment is speed: rapid deployment, rapid response, and technologies that can integrate seamlessly with diverse on-site generation sources. In many cases, the priority is securing resilient power rather than pursuing the lowest-cost solution, positioning BESS as a high-value option in a market where reliability is non-negotiable.
As data centre loads climb, storage will play an increasingly central role in supporting both site-level resilience and broader grid stability.
Looking ahead
2026 will reward developers, operators, and policymakers who understand that power system security and resilience are just as critical to the energy transition as megawatts. Storage will continue to play a pivotal role, but success will increasingly rely on resilience, transparency, and long-term community partnership.
As the industry matures, the focus is shifting toward solutions that are smarter, more adaptable, and capable of supporting increasingly complex grids.