Australia gas generation during the early evening peak has plunged over the past year, with new batteries stepping in to supply power when demand is highest.
Between 5pm and 8pm, gas-fired output fell 67% in the year to August, according to analysis by consultancy EnergyEdge. The shift was driven by rapid growth in large-scale batteries and about 500,000 home battery installations supported by government subsidies.
EnergyEdge managing director Josh Stabler said both utility and household batteries delivered record evening output as adoption accelerated. He noted the pace of battery installation is now outpacing other power assets.
The report concluded that batteries have effectively taken control of the evening peak. In August 2026, batteries supplied 49% of the grid’s dispatchable evening power needs, up from 0.4% in 2020. Over the same period, gas dropped from 65.9% to 20.6%.
Wholesale power prices have eased as a result, benefiting households. Analysts cautioned, however, that lower prices and reduced volatility could complicate investment in new dispatchable capacity.
Recent quarterly figures from the Australian Energy Market Operator pointed to a similar pattern. From April to June, gas generation posted its lowest second-quarter average in more than 20 years, with declines in every region and the steepest falls during the evening peak.
Alison Reeve, who leads the Grattan Institute’s energy and climate change program, said utility batteries are soaking up midday renewable surpluses and displacing gas in the evening. Flattening the daily load curve is reducing price swings across the system, she said.
Reeve said that over time, less reliance on gas and lower volatility should support cheaper power. Yet she noted gas will still be required during rare stretches of winter when conditions are dark, still and cold, which could make gas more expensive and less profitable during those limited operating windows.
Australia gas generation shifts to a strategic backup role
A 20-year roadmap from the market operator, the Integrated System Plan, anticipates gas moving into a more strategic, flexible backup role that also provides system security services. This is most likely in winter, especially in southern states, when shorter days limit solar and electricity demand runs longer into colder nights.
Reeve said gas is undergoing a fundamental transition that will affect fuel needs, the number of generators and operating costs. Managing that shift proactively, she said, will be key to protecting consumers from unnecessary expense.
Analysts have raised similar concerns in other markets as extreme temperatures strain grids and reshape power demand, including when mayors outline global extreme heat response playbook for cities worldwide.
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