Origin reports big dip in gas sales, as demand falls and batteries grab more of energy mix

One of Australia’s biggest energy retailers and generators has reported a significant dip in annual gas sales, as customer demand for the fossil fuel declines, and as battery storage eats into the generation share of utility-scale gas plants.

In its June quarterly report,Origin says that while electricity sales volumes increased over the 2025-26 financial year, albeit by just 1 per cent, gas volumes declined by 17 per cent over the same period.

Origin says the drop in gas sales was not unexpected, and follows the trend of large customers using less, and the diminishing share gas is playing in the electricity market, as big and small batteries step in to smooth and help meet peak demand.

Origin is playing its own part in the energy market’s rush to battery storage, with two large-scale projects in its own portfolio of assets and off take deals with another two big batteries.

In January, Origin marked the start of commercial operations of its 460 megawatt (MW), 1770 megawatt-hour stage 1 Eraring battery, in the shadow of the coal plant of the same name, in New South Wales.

A month earlier, the gentailer announced that it had approved a further $80 million expansion of the Eraring battery, taking it to a total size of 700 MW and 3,160 MWh over four stages of construction.

In Victoria, the Origin-developed Mortlake battery energy storage system (BESS) joined the grid in March, and continues to work its way up to its nameplate capacity 300 megawatt (MW) and 650 megawatt-hours.

And in Queensland, Origin has a commercial tolling agreement with the first two stages of Quinbrook’s Supernode battery, giving it access to another 520 MW and 1,858 megawatt-hours of storage.

In the pipeline, Origin is seeking approvals for a wind and battery project (800 MW/1,000 MWh) in the NSW Northern Tablelands. And it has secured a 10-year off-take agreement  240 megawatt (MW), 960 megawatt hour (MWh) Summerfield battery in South Australia.

In its quarterly report, Origin said it now has 980 MW / 3,408 MWh of battery storage in operation, and is reaping the benefits, already.

“The addition of significant battery storage capacity has materially strengthened Origin’s energy supply portfolio, providing improved flexibility in how we balance supply and demand, manage evening and seasonal peaks, and navigate volatility in the market,” Origin CEO Frank Calabria said in a statement.

The changing of the guard from gas peakers to big batteries was further highlighted this week in a report from Rystad Energy, which said that while batteries are not yet replacing bulk thermal energy, they are taking the highest-value hours.

According to the Rystad report, battery discharge reached 360.7 gigawatt-hours (GWh) on the National Electricity Market (NEM) in June, within 0.1 GWh of open-cycle gas turbine (OCGT) generation, the closest winter month in Rystad’s series.

Source: Rystad Energy

But it is the intraday profiles (see chart above) that shows where the displacement is occurring.

“Batteries now cover much of the morning and evening peaks that gas peakers traditionally served, while coal still supplied more than half of the energy on the representative days shown,” the report says.

Rystad says that battery output exceeded OCGT output on the NEM from November 2025 through to May 2026, with average NEM spot prices during those months ranging from $A53 per MWh to $77 per MWh.

“The pattern is consistent with batteries reducing the frequency and duration of high-price periods, weakening the economics of gas peakers and reducing routine gas demand from the power sector,” the report says.

“As coal-fired capacity retires, batteries will increasingly cover short-duration peaks, but the NEM will still require dispatchable capacity to manage longer periods of weak renewable output. Some of that requirement is likely to be met by new gas-fired generation alongside longer-duration storage.”

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