INTERVIEW: Australia’s growing battery market demands complex solutions, says Valo Energy

Australia's shift towards renewable energy is creating opportunities for large-scale battery storage, but increasingly complex grid requirements and pressure on project economics will shape the market's development, Suraj Narayan, Managing Director, Australia, Valo Energy, a battery energy storage system integrator, told Platts in an interview in the week of Oct. 30.

As coal-fired power stations retire and renewable generation expands, batteries are expected to play a growing role in balancing electricity supply and demand.

"The challenge is no longer simply about deploying battery capacity," said Narayan. "Customers need systems that can meet increasingly demanding grid requirements while remaining commercially viable throughout their operating lives. Engineering execution, testing, and commissioning would be particularly important as projects grow larger."

Cost remains another consideration. While materials account for an important part of battery pricing, Narayan said the overall calculation also includes system capacity, storage duration, technical specifications, software, grid compliance, and long-term servicing.

"Customers increasingly need to consider the value a system can deliver over its operating life, rather than focusing solely on the initial capital investment," he said.

The choice of storage duration will also influence investment decisions. Four-hour batteries can shift electricity from periods of high renewable generation to times when demand or prices are higher. Longer-duration systems may help bridge extended periods of lower renewable output, but require more energy storage capacity and greater upfront investment.

Narayan said developers would need to match storage duration to individual project requirements and potential revenue streams. No single configuration would suit every application, he said, with economics depending on market conditions and the services each battery could provide.

Narayan expects demand to grow for larger batteries with advanced grid-support capabilities as Australia integrates more renewable generation. He said the pace of development would depend on network requirements and whether individual projects could establish a viable commercial case.

Battery storage could also support Australia's emerging hydrogen, ammonia, and methanol industries, particularly where production facilities depend on variable renewable electricity. Narayan said batteries could help manage short-term fluctuations in power supply and provide operational flexibility for electricity-intensive processes such as hydrogen electrolysis.

The commercial case, however, would depend on each facility's electricity requirements, operating schedule, and available alternatives, he added.

Valo sees Australia's energy transition creating opportunities for battery storage, but Narayan said success would depend on more than installed capacity. Projects would also need to meet grid requirements, control costs, and deliver dependable performance throughout their operating lives, he said.

Valo was established in October through a joint venture between Wärtsilä and RCT Solutions. It combines Wärtsilä's energy storage technology and GEMS energy management software with RCT Solutions' engineering, manufacturing, and supply chain expertise.The company says it builds on experience spanning more than 20 gigawatt-hours across more than 130 utility-scale projects worldwide.