Extract from ABC News
Analysis
Energy Minister Chris Bowen is reluctant to forecast what might happen in the years ahead. (ABC News: Matt Roberts)
Two giant chimneys towering over the site of the old Liddell coal-fired power station came crashing down in a controlled demolition, on the very day the first electricity price cut in years was finally confirmed.
For years, Liddell, in the NSW Hunter Valley, played a central role in the climate and energy wars.
When AGL first announced plans for closure more than a decade ago, the then-Coalition government went into a mild panic. Ministers tried to shame the company into changing its mind, while some backbenchers talked about either forcibly seizing Liddell or using taxpayer funds to build a new coal plant on the site.
It achieved little beyond a brief extension of Liddell's operating life.
The generating units were finally switched off in 2023.
In the weeks that followed the Liddell closure, the Coalition reached for a new, crazy-brave policy idea. Taxpayer-funded nuclear power plants. Peter Dutton nominated Liddell as the site where one such plant could be easily plugged into the grid.
Former Liberal leader Peter Dutton had nominated Liddell as the site where a taxpayer-funded nuclear plant could be easily plugged into the grid. (ABC News: Matt Roberts )
In 2026, a battery bonanza is underway
Today, there is no nuclear plant at Liddell. Nor a new coal-fired power plant.
There is, however, a large-scale battery capable of supplying energy to 200,000 homes for two hours.
It's just one of the grid-scale batteries behind a battery bonanza underway in Australia.
According to data from the Clean Energy Council (CEC) this week, investment in new large-scale wind and solar fell in 2025 to one of its lowest levels in a decade. It's a worrying drop, said the CEC, "threatening to stall momentum, as energy demand continues to rise and coal-fired power increasingly fails".
But when it comes to batteries, it's a very different story.
Home battery installations surged 260 per cent last year, driven in large part by government subsidies. The "Cheaper Home Batteries Program" remains wildly popular and is now forecast to fund 2 million installations at a taxpayer cost of $7.2 billion.
Large-scale battery capacity also recorded extraordinary growth of 233 per cent last year, driven by plunging costs and the speed of installation.
Amazingly, Australia (55th in the world on population and 13th on economic size) now ranks third in the world for grid-scale batteries, behind only China and the United States.
Australia has quickly become a lithium-ion leader. The scale of this transformation was unforeseen only a few years ago.
Not a cheap exercise
As critics of the energy transition regularly point out, this hasn't been an inexpensive exercise. Renewables, batteries and transmission lines are all coming at enormous cost. And fossil fuels are still needed to keep the lights on.
But as those Liddell chimneys were coming down on Tuesday, the Australian Energy Regulator (AER) was confirming a potentially important shift.
The AER ordered a cut in the Default Market Offer (a benchmark for energy retailers) across several states.
The reduction of up to 10.7 per cent for households and 20.9 per cent for small businesses is the first drop in power prices since the start of the war in Ukraine sent gas prices through the roof more than four years ago.
AER Chair Clare Savage was clear about what's driving the reduction.
"A big surge in batteries and solar into the system", she said, "is displacing the need for more expensive gas-fired generation and hydro generation at peak times".
In other words, batteries are flattening the peaks in demand, and prices are finally falling as a result.
A potential fork in the road
So, is this the turning point the government has been waiting for?
Savage is careful about predicting the future, noting there's still a risk of "global volatility" in the years ahead.
As the Iran war fuel shock has shown, the international environment is highly unpredictable.
Energy Minister Chris Bowen is also reluctant to forecast what might happen in the years ahead. No one wants to repeat the 2022 election campaign mistake of promising power prices would fall by $275.
There's also the unknown impact on prices from rising energy demand as the AI data centre boom continues and more households shift to electric vehicles.
But within the government, there's quiet confidence the battery boom will continue to gather pace and help shield Australia from both global shocks and domestic demand surges, driving prices even lower.
Prices are unlikely to fall all the way back to where they were before Labor came to power in time for the next election in two years. But the direction of prices will matter.
One Nation, the Liberals and Nationals are all united on scrapping the net-zero target and ending subsidies for both household batteries and large-scale renewables. They see this week's energy price reduction as a meaningless drop in the bucket and believe a return to more fossil fuels is the answer.
But if it's the start of a more permanent move to lower prices and greater grid stability, thanks largely to battery take-up, this week could mark a new chapter in the climate and energy wars.
David Speers is national political lead and host of Insiders, which airs on ABC TV at 9am on Sunday or on iview.
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