Can Australia’s long-duration batteries deliver grid reliability before coal exits?

Australia is moving quickly toward phasing out coal-fired power, and long-duration battery storage is shaping up as one of the most critical tools to maintain grid stability during the transition. Energy Vault’s newly acquired 125 MW/1,000 MWh Stoney Creek Battery Energy Storage System (BESS) in New South Wales is a prime example of the kind of large-scale, eight-hour system that could define the next decade of energy reliability in the National Electricity Market (NEM).

The Australian Energy Market Operator (AEMO) projects that up to 90 percent of NEM coal-fired capacity will retire by 2035, with full closure by 2040 under its Step Change scenario. That same roadmap calls for dispatchable storage to expand to 49 GW—or 646 GWh—by 2050, up from today’s relatively modest base. In the near term, AEMO has flagged potential supply shortfalls in New South Wales by 2027–28 without a faster build-out of storage, transmission, and renewable capacity.

How Stoney Creek’s eight-hour capacity positions it to address New South Wales’ looming reliability gap

With 125 MW of power and a total energy capacity of 1,000 MWh, Stoney Creek BESS can deliver eight hours of continuous discharge at full load. That duration puts it in the long-duration storage category—a niche with significant market value as coal exits and renewables take the lead. Strategically sited to serve both the NEM and regional load centres, the project is designed to provide energy shifting during solar peaks, frequency control ancillary services (FCAS) in moments of grid instability, and firming capacity for wind and solar portfolios.

Few projects in Australia currently offer this combination of scale and duration. Victoria’s 300 MW/450 MWh Victorian Big Battery and South Australia’s Hornsdale Power Reserve are strong contributors to fast-response needs, but their shorter discharge windows limit long-duration coverage. Pumped hydro projects like Snowy 2.0 promise multi-day storage but face high capital costs and delivery uncertainty.

By contrast, Stoney Creek’s eight-hour lithium-ion configuration, paired with Energy Vault’s EVx energy management platform, is engineered to optimise revenue from wholesale arbitrage, FCAS participation, and long-term capacity contracts. That versatility is critical for meeting both commercial performance targets and policy-driven reliability obligations.

The broader market context strengthens the economics of long-duration battery storage in Australia. New South Wales is preparing to close multiple coal plants before the end of the decade, and the NEM is becoming increasingly dependent on variable renewables. Large-scale batteries capable of multi-hour discharge can help manage wholesale price volatility, reduce reliance on peaking gas plants, and secure long-term offtake agreements with retailers and commercial-industrial customers.

Peer activity underscores the competitive yet under-supplied nature of the market. Fluence Energy recently commissioned the 150 MW/300 MWh Hazelwood BESS in Victoria, Tesla continues deploying Megapack systems in multiple states, and Powin Energy is advancing multi-gigawatt-hour projects in Queensland and South Australia. Still, long-duration assets like Stoney Creek remain relatively rare—offering a potential first-mover advantage in securing capacity contracts and reliability tenders.

For investors and policymakers alike, the race is on to see which of these large projects can reach commercial operations before major coal retirements trigger reliability shortfalls. Every year of delay increases the risk of price spikes, load-shedding events, and over-reliance on high-emissions peaking plants.

Why long-duration battery projects like Stoney Creek will be the real test of Australia’s grid reliability after coal

Projects like Stoney Creek will be central to answering the question of whether Australia’s grid can maintain reliability through the coal phase-out. The facility’s eight-hour profile, strategic location, and integration into a broader build-own-operate portfolio give Energy Vault a competitive position in Australia’s long-duration storage market.

Execution will be the deciding factor. On-time commissioning by late 2026, effective integration of control systems, and proactive asset management will determine whether the project delivers its intended performance. Market conditions will also matter—continued volatility in wholesale prices and strong FCAS demand can lift revenue, while any policy delays could constrain returns.

If delivered on time and operated at full capability, Stoney Creek could emerge as a flagship case study in how long-duration battery energy storage systems can underpin grid reliability during the critical final years of Australia’s coal-to-renewables transition. Its eight-hour profile directly addresses one of the biggest challenges in the National Electricity Market—how to shift surplus renewable energy from midday peaks to evening demand without relying on gas peakers or coal back-up.

A strong operational track record would not only validate the technical and economic case for large-scale, eight-hour lithium-ion projects, but also influence the appetite of institutional investors, infrastructure funds, and energy retailers to back similar developments. Successful performance could accelerate the rollout of long-duration systems across other high-demand zones in New South Wales, Victoria, and Queensland, creating a replicable template for both financing and market participation.

In the broader context, Stoney Creek’s impact may help shape Australia’s energy transition trajectory—determining how quickly dispatchable storage can replace retiring thermal capacity, how market rules evolve to reward multi-hour flexibility, and how confidently policymakers and investors commit to scaling grid-scale storage as a primary reliability resource in the decade ahead.