Batteries are quickly turning gas into a costly “sometimes fuel” for electricity. So why build more?

Key pricing in Western Australia’s electricity transition is increasingly being decided in the evening peak. The data below enables us to show an answer to the above question.

The 30-minute WA Wholesale Electricity Market (WEM) data for 10–21 August 2026 captures a period of heightened system stress while much of the coal fleet was unavailable (Figure 1). These are interval-level associations from a short period, not a dispatch model or a full-year causal estimate – but they reveal the price-setting dynamics that daily averages can obscure.

Daytime charging brings a large negative load, coincident with the solar peak. Battery discharge then rises sharply through the late-afternoon and evening transition, at precisely the time gas would otherwise have to fill more of the gap.

For now, coal and gas remain substantial, but batteries are visibly reshaping the residual demand they face. The plot shows a grid already operating as a dynamic mix of rooftop solar, utility solar, wind, batteries, coal and gas – and the WEM is no longer a system in which gas simply steps in to replace coal.

Figure 1: Western Australian WEM 30-minute electricity generation, and battery charging and dispatch by source, 10–21 August 202

Batteries are delivering

The striking result is the growing role of batteries. In the evening, as rooftop and utility-scale solar output falls, utility batteries are regularly supplying more than 20% of WEM generation in individual 30-minute intervals. On some recent intervals, battery output is approaching 30% (Figure 2).

Figure 2: WEM 30-minute gas, renewables and battery charging and discharging shares, 10–21 August 2026

Battery output is no longer ancillary to WEM evening operations with an up to 30% share, batteries have grown substantively and inexorably in the last two years (Figure 3).

In the most valuable and operationally difficult part of the day, batteries are now a large generation source. They are predominantly charging during the solar-rich middle of the day, then discharging into the late-afternoon and evening transition.

This is an ideal partnership and as batteries are usually close to where they are needed, they are automatically preferred by the power system balancing and firming needs, rather than gas turbines that come on much more slowly.

Figure 3: Daily WEM battery dispatch growth since March 2024.

Why gas is becoming redundant

This trend in gas use matters because price-setting is not determined by annual energy shares. What matters is what plays out at the margin in the intervals when supply is tight.

The 30-minute price analysis shows the pattern seen more broadly in the National Electricity Market (NEM). Higher gas shares are associated with higher volume-weighted prices and the largest price outliers (Figure 4).

Higher renewable shares are associated with lower prices, including the lowest-price periods. These are descriptive relationships, not a full causal model, but they are consistent with the basic structure of the market: when low-marginal-cost wind and solar are abundant, wholesale prices fall; when gas has a larger role, prices rise.

Figure 4: WA WEM 30min volume-weighted price versus gas share, 10–21 August 2026.

The battery relationship requires more care or else we may invest in redundant technology for our power future if we choose to expand gas as the preferred back-up.

Battery dispatch is often greatest in higher-priced intervals (Figure 5), so a simple scatterplot does not show batteries “causing” lower prices. It shows that batteries dispatch when the value of their stored energy is highest. The relevant counterfactual is not the observed price; it is the price and gas output that would have occurred without battery supply.

In other words, batteries may be associated with high-price intervals because they are responding to them while simultaneously limiting the price by displacing the marginal gas plant.

Figure 5: WA WEM 30min volume-weighted price versus battery share, 10–21 August 2026.

Renewable penetration is the greatest driver lowering price. In the NEM, renewable shares above 50% are coincident with the lower daily volume weighted pricing below $100/MWh. But in the WEM, gas still supplies a much larger share of electricity, and so renewables penetration has to exceed 65% for the comparable result (Figure 6).

Figure 6: WA WEM 30min volume-weighted price versus renewables share, 10–21 August 2026.

What do we do to avoid costly gas dependence?

In the NEM, batteries are increasingly constraining gas despite a relatively modest energy share, because their output is targeted at expensive evening intervals. In the WEM, the larger share of gas means WA needs a larger battery capacity and duration to achieve the same constraint on gas pricing.

This should shape the debate over the WA government’s proposed new gas generation. 

The trend in the long-term data for Western Australian electricity is clear (Figure 7). New generation growth is being supplied by renewables, fossil fuels are in retreat being led by the exit of coal – but conservative assessments for the state’s future energy needs shows a reluctance to aggressively move to a clean future.

Figure 7: WA WEM generation by source 2014-2026.

Existing gas capacity may still be needed in the near term for firm capacity, reserves, black-start and rare extended low-renewable periods. But more gas based on a new power plant could be a serious waste of money as it may not be the preferred option when batteries, as shown above, are cheaper and function better.

Further, a gas-led energy strategy risks extending gas’s role in setting wholesale prices, exposing consumers to fuel and capital costs, and slowing investment in the technologies that reduce gas use.

The strategy needs to be to prioritise the fastest energy transition in human history. This means the WEM should build storage, renewable supply, demand flexibility and grid capability scale quickly enough to make gas an occasional and infrequent strategic backup.

The strategy needs to avoid a legacy system where the evidence clearly shows using gas remains the highest price setter by design. Is this just politics?

The evidence is growing daily that battery capacity is sufficient for the future of the WEM, with needed additions to both wind and solar, but there will be no need to fabricate a role for gas.