ADELAIDE, SA – South Australia has significantly advanced its grid stability and renewable energy integration goals this week, formally awarding contracts for 517 megawatts (MW) and 4,136 megawatt-hours (MWh) of new battery energy storage systems (BESS). The announcement, made on 29 May 2026, confirms an estimated AUD$2.2 billion in local investment, projected to more than double the state’s large-scale battery capacity from 1.1 GW to 2.5 GW by 2029.
These projects, awarded under South Australia’s Firm Energy Reliability Mechanism (FERM), are designed to ensure continuous dispatchable energy, a critical factor as the state targets a net 100% renewable electricity system by 2027. The FERM initiative specifically sought proposals for long-duration capacity, with successful tenderers required to provide committed output continuously for eight hours when needed.
“These projects will grow batteries’ contribution to our state’s generation capacity to more than double that of Victoria, New South Wales and Queensland, adding capacity to reach almost three-quarters of South Australia’s all-time peak demand, eclipsing all other major Australian grids.”
The investment will be delivered in phases, with the initial 375 MW / 3,000 MWh scheduled for completion by November 2028. A further 142 MW / 1,136 MWh will follow by November 2029. This phased approach aims to steadily enhance the grid’s ability to manage the intermittency of wind and solar generation, reducing reliance on gas-fired peaker plants and mitigating price volatility.
Key Projects and Developers
Six projects were awarded Firm Energy Reliability Mechanism Agreements (FERMAs) following a tender that closed in late 2025. These projects represent a combined capacity of 1,334 MW / 5,336 MWh, with the FERM contracts securing a portion of this output.
Leading developers securing contracts include Neoen Australia, AMPYR Australia, and Iberdrola Australia. These companies are already significant players in Australia’s renewable energy landscape. Other successful bidders include Akaysha and Zebre.
| Project Name | Developer | Committed Output (MW) | Storage Capacity (MWh) | Expected Operation |
|---|---|---|---|---|
| Goyder Battery Stage 1 | Neoen Australia | 75 | 600 | By Nov 2028 |
| Goyder Battery Stage 2 | Neoen Australia | 75 | 600 | By Nov 2028 |
| Northern Battery | AMPYR Australia | 270 | 1080 | By Nov 2028 / 2029 |
| Tungkillo BESS | Iberdrola Australia | 270 | 1080 | By Nov 2028 / 2029 |
| Dartmoor BESS | ZEBRE Pty Ltd | 144 | 576 | By Nov 2028 / 2029 |
| (Undisclosed Project) | Akaysha | 92 | 736 | By Nov 2028 / 2029 |
Note: Some project details reflect the overall nameplate capacity, while FERM agreements secure a specific committed output.
Impact on South Australian Energy Market
This substantial investment is expected to have several positive impacts on South Australia’s energy market. By providing significant firming capacity, the batteries will help integrate more intermittent renewable energy sources, such as solar and wind farms, into the grid without compromising reliability. This is crucial for maintaining grid stability and frequency control, especially during peak demand periods or when renewable generation is low.
The increased dispatchable capacity will also contribute to lower wholesale electricity prices by reducing the need for expensive gas-fired generation. This can translate into more competitive retail electricity plans for households and businesses across the state. For insights into optimising household energy costs, readers can explore our guide on the Best Electricity Plans in Australia 2026: A Comprehensive Guide for Households to Cut Costs.
Furthermore, the FERM mechanism aims to de-risk investment in large-scale battery projects, encouraging private sector participation and accelerating the clean energy transition. This aligns with broader national efforts to build a more resilient and sustainable energy future. The focus on long-duration storage also complements the emerging role of Virtual Power Plants (VPPs) in Australia, which allow aggregated home batteries to support the grid. More information on such programs can be found in our article: Unlock $1,000+ Annually: Best Home Battery VPP Programs in Australia 2026 Ranked.
Broader Context and Future Outlook
South Australia has consistently been at the forefront of renewable energy adoption in Australia. This latest round of investment through the FERM mechanism reinforces the state’s commitment to achieving its ambitious renewable energy targets and maintaining energy security. The initiative is a direct response to the challenges of integrating high levels of renewables, particularly the need for reliable, dispatchable power when the sun isn’t shining or the wind isn’t blowing.
The Australian Energy Market Operator (AEMO) has consistently highlighted the importance of transmission and storage infrastructure in its Integrated System Plan (ISP) to support the national energy transition. South Australia’s proactive approach with FERM and significant battery deployment serves as a model for other states navigating similar transitions. The estimated $2.2 billion local investment will also create substantial economic activity and jobs within the state, further solidifying the clean energy sector as a key economic driver.
As Australia continues its journey towards a decarbonised grid, strategic investments in long-duration storage and robust transmission infrastructure remain paramount to ensure a reliable, affordable, and sustainable energy supply for all consumers. Australians concerned about their energy bills can also consult our comprehensive guide on Navigating Australian Energy Bill Relief and Utility Costs in 2026: Your Essential Guide.