The Latrobe Valley in Victoria is set to host Australia’s first commercial closed-loop, compressed carbon dioxide (CO2) energy storage system, a significant step towards long-duration grid stability. Announced on Friday, July 10, 2026, the 20-megawatt (MW) and 200-megawatt-hour (MWh) CO2 battery will be developed by the State Electricity Commission (SEC) in partnership with Italian innovator Energy Dome. This Australian-first technology marks a critical advancement in firming Victoria’s energy supply as the state transitions away from coal-fired generation.
The project, to be located at the SEC’s innovation precinct in Hazelwood North, is designed to provide continuous electricity for between 10 and 12 hours. This duration significantly surpasses the four-hour capacity of most existing lithium-ion grid batteries in Victoria, offering a new level of energy security and price stability for households and businesses. The CO2 battery technology operates on a closed-loop system, using steel, water, and CO2, highlighting a move towards diverse, non-lithium storage solutions.
A New Era for Long-Duration Storage
The deployment of this 10-hour CO2 battery addresses a growing need within Australia’s National Electricity Market (NEM) for longer-duration energy storage. Recent periods of low solar and wind generation, often referred to as “winter doldrums,” have underscored the importance of technologies capable of storing energy for extended periods. While lithium-ion batteries excel at shorter-duration firming, typically up to four hours, the Energy Dome system can hold up to three times the electricity of a comparable large-scale lithium-ion battery.
Chris Miller, SEC Chief, emphasised the utility’s focus on deep energy storage, including non-lithium technologies, to provide “around-the-clock reliability of supply that’s needed to power our homes, businesses and communities.”
“Long-duration energy storage will play a foundational, system-level role in Victoria’s future energy system, firming variable renewable generation (from wind and solar) to deliver the around-the-clock reliability of supply that’s needed to power our homes, businesses and communities.”
This investment supports the uptake of more renewables by ensuring that excess generation from solar and wind farms can be stored during periods of high output and dispatched when demand peaks, or renewable generation is low. This mechanism is crucial for mitigating wholesale price volatility and putting downward pressure on energy bills.
Technology and Impact
Energy Dome’s proprietary CO2 Battery technology stores energy by compressing carbon dioxide, which is then expanded to drive a turbine and generate electricity. This process is entirely enclosed, meaning no CO2 is released into the atmosphere. The system’s reliance on readily available and cost-effective materials like steel, water, and CO2 could offer a competitive alternative to traditional battery chemistries, reducing supply chain risks and environmental impacts associated with critical minerals.
The project is expected to create up to 66 jobs, supporting the Latrobe Valley’s economic transition from its historical reliance on coal-fired power. While a specific timeline for commercial operation of the 20 MW/200 MWh CO2 battery has not yet been announced, its development is part of the broader Victorian Energy Jobs Plan, which aims to deliver significant economic benefits to regional Victoria.
This deployment comes amidst Victoria’s broader efforts to expand its energy storage capacity. The state recently fast-tracked planning approvals for 1.64 GW of battery storage, including the 100 MW/400 MWh Chivers Road battery and the proposed 1,000 MW/4,000 MWh Morwell battery project. These projects, alongside the new CO2 battery, are integral to Victoria’s target of 95% renewable energy by 2035.
Shifting the Energy Landscape
The introduction of long-duration storage solutions like the CO2 battery will fundamentally change how Australians consume and manage their electricity. For households, this means a more reliable grid less susceptible to the fluctuations of renewable generation. The ability to store cheap renewable electricity generated during the day and release it overnight directly impacts peak electricity charges. Consumers leveraging smart meters and time-of-use tariffs could see substantial savings by shifting their consumption to periods of lower demand, further enabled by a more stable grid.
This innovation also complements the growing trend of home battery installations. While grid-scale batteries address system-wide stability, residential batteries provide localised backup and greater energy independence. Understanding how these larger grid assets influence wholesale prices and grid reliability can help homeowners make informed decisions about their own energy storage investments. For those considering home battery backup for blackouts, enhanced grid stability from projects like the Latrobe Valley CO2 battery offers an additional layer of resilience. For more on optimising your household energy, consider our guide on Slash Your 2026 Peak Electricity Charges by Up To 70%: Your Daily ToU Tariff Playbook and Home Battery Backup for Blackouts in 2026: Systems & Costs from $7,000.
As Australia continues its rapid energy transition, the diversification of battery technologies and the focus on longer storage durations are crucial for maintaining a reliable, affordable, and clean energy supply. The Latrobe Valley’s new CO2 battery is a tangible example of this evolving landscape.
| Battery Type | Typical Duration | Primary Application |
|---|---|---|
| Lithium-ion (Grid-scale) | 2-4 hours | Frequency control, peak shaving |
| CO2 Battery (Energy Dome) | 10-12 hours | Long-duration firming, seasonal balancing |
| Pumped Hydro | 6-24+ hours | Large-scale, long-duration storage |
| Home Battery (Lithium-ion) | 4-12 hours | Solar self-consumption, backup |
This table illustrates the distinct role the Energy Dome CO2 battery will play in the broader energy storage ecosystem.