Seize the day: Time to let solar “daylight saving” in batteries reduce our costs in Australia

The world focus is on energy – at least on the critical dependence on gas and oil from the middle east. The political and market messages have been to reassure us that all is fine. What do the Australian trends tell us about looking after fossil fuel supplies or facilitating the transition to renewables?

Updated NEM price data to the end of March 2026 reinforces the story we (Newman and Wills) set out in January: more renewables and batteries mean lower, less volatile prices, while gas and coal remain the drivers of high-price events.

As renewables climb towards and beyond 50 per cent of daily generation, volume-weighted prices increasingly sit below AUD 100/MWh, whereas days with higher gas or coal shares continue to cluster at the expensive end of the chart.

The new scatter plots reaffirm what we have said previously. Renewables are associated with a tight band of lower prices, gas with a strong upward slope into frequent price spikes, and coal with both higher and more volatile outcomes.

Batteries, though still only reaching around 1.7 per cent of NEM supply, are already dampening volatility and displacing gas in peak periods, extending the pattern we described in “The rise of battery storage, and why the grid is rapidly passing gas!”

These daily outcomes sit alongside our half-hourly analysis in “Gas is being squeezed by renewables – every 30 minutes” which showed gas losing ground in operational dispatch across the day.

And they give further empirical backing to “Australia has already passed gas – the market is just updating its paperwork” where we argued that electrification and a surging battery pipeline are eroding the very demand that was meant to justify new gas fields and pipelines.

Taken together, the evidence is that Australia’s electricity market has passed gas in practice; now policy and investment settings need to catch up. To not just lock in these gains, but to further extend the opportunities that they present, market and regulatory reform needs to keep pace with what the data is already telling us about the superiority of renewables and storage.

Business groups and government agencies are either being deliberately slow to accept this reality or they are being pushed into maintaining the status quo of fossil fuel dependence by lobby groups.

The new situation is the Fourth Global Oil Shock. What does it show us about the trends?

The current oil-linked pricing shock is a reminder that tying electricity costs to volatile global fuel markets is an unnecessary and expensive risk in a grid that can increasingly run on local wind, solar and batteries. This grid can also run the transport system in a more reliable way. 

The huge commitment of government funding and focus in the past few weeks since the Gulf War began, has been about getting us through the short-term reduction in oil supplies and the inevitable price increases for gasoline and diesel.

It reminds us how slow has been the shift towards EVs in the policy space and the reactionary dominance of vehicle and oil interests in the transition away from oil. The huge SUVs guzzling diesel that flooded our streets in the last few years look very silly in the present context. 

Well-designed reforms are needed to accelerate the shift away from the exposure to oil and gas: vehicle regulations, public transport investments, connection and congestion rules and capacity investment frameworks that prioritise firmed renewables over new fossil fuel assets.

If we get those settings right, future price spikes driven by oil and gas markets will be the exception, not the rule, as Australia’s grid and transport systems become cleaner, cheaper and more resilient.

This is the message for today rather than seeing us through the next weeks by assurances that all is fine with fossil fuels for power.

Prof Ray Wills (Adjunct Professor, The University of Western Australia; Managing Director, Future Smart Strategies)

Prof Peter Newman (Professor of Sustainability, Curtin University)