Australia is in the midst of an energy transition. With the widespread adoption of rooftop solar, combined with grid-scale renewable energy projects like wind and solar farms, Australia’s renewable energy capacity is growing.
Behind-the-meter, on-site battery solutions and grid-scale batteries are now also playing a key role in how electricity is stored and consumed across Australia.
The significant increase in solar output from both rooftop systems and large-scale solar farms combined with the typical demand patterns in the National Electricity Market (NEM) led to what is known as the “duck curve”. The duck curve was formed as a result of significant solar output producing low, or negative, electricity spot prices in the middle of the day – which is known as the belly of the duck. When the sun began to set and solar output dropped off at the same time as demand for electricity spiked during the evening peak, this led to a steep increase in electricity spot prices. This increase is what we refer to as the neck of the duck.
But the rising number of batteries coming online across the National Electricity Market (NEM) is flattening the duck curve, re-shaping the patterns that have defined the pricing dynamics of the wholesale energy market during the past few years.
Keep reading to learn more about what this change to the duck curve could mean for your business.
Australia’s energy grid is in a period of transition. Coal-fired generators continue to provide baseload generation capacity and grid stability. At the same time, renewables penetration is increasing, with rooftop solar reducing demand from the grid during the middle of the day.
This is where batteries play a pivotal role.
Source: Shell Energy Australia
When behind-the-meter and grid-scale batteries are dispatched during the evening peak, they can replace more expensive forms of generation, helping to reduce wholesale electricity spot prices at these times.
According to the Australian Energy Market Operator (AEMO), batteries replaced hydro electricity as the most frequent price-setting technology in Q1 2026. This was reflected in lower electricity spot price outcomes, with evening peak prices falling as batteries reduced reliance on gas and hydro generation.
Total battery installations, quarterly. Source: Clean Energy Council
The result is that there is less volatility in the wholesale energy market, which in turn may lead to lower electricity forward contract prices. By smoothing supply and demand, the increase in behind-the-meter and grid-scale batteries in the NEM has reduced the frequency of high energy price events, particularly during peak demand windows such as when the sun begins to set, contributing to lower electricity spot prices.
The reduction in high spot price events and spot price volatility may in turn lead to lower forward contract market prices and therefore retail electricity contract prices.
Our aim is to provide you with all the information you need to continue making smart, informed energy decisions.
To stay up to date on the latest energy insights and wholesale energy market trends, subscribe to our Powering On newsletter and monthly wholesale market reports, with commentary from our expert trading team, here.
Share
9 June 2026
Lower LGC prices give large Australian businesses a cost-effective opportunity to meet renewable energy targets through Shell Energy’s industry-leading RECO solution.
Explore how our integrated retail solutions help Australian businesses navigate market volatility, manage cost risk, support renewable goals and unlock greater electricity contract value through informed, flexible energy decisions.
5 March 2026
Steve Rogers, Executive General Manager for B2B Retail, shares how Shell Energy’s customer service commitment has secured its place as number one for customer satisfaction in the UMI survey for the 15th year.
