Batteries
The national grid plan assumes just over half of home batteries join a virtual power plant. It books up to $5 billion against that
If you have put a battery on the wall, or are about to, the country’s
main electricity planning document has an assumption about what you will do with it. AEMO’s
2026 Integrated System Plan forecasts small-scale batteries growing from
5 GW and 12 GWh in April 2026 to 35 GW and 78 GWh by 2050, and
says that of those, just over half of those batteries would be coordinated as part of a VPP
. The plan puts a
figure on what that coordination is worth: it would avoid
up to $5 billion being spent on additional utility-scale storage in the NEM
. It also says,
in the same section, that the consumer trust required to get there is not yet in place.
What the plan actually assumes about your hardware
The Integrated System Plan is AEMO’s roadmap for the National Electricity Market, and its
central case is called Step Change. The household part of it is not a footnote. Under Step Change,
small-scale batteries grow
from 5 GW/12 GWh in April 2026 to 12 GW/33 GWh in 2030, and then 35 GW/78 GWh in 2050
. By
2050 the plan expects around two-thirds of the dwellings with solar
to have a battery
supporting it.
Then the sentence that most battery owners have never been shown:
just over half of those batteries would be coordinated as part of a VPP
. A virtual power
plant is a third party, usually a retailer or an aggregator, controlling when your battery charges
and discharges, bundled with thousands of others.
The same section does the equivalent for cars. By 2050 up to 80 per cent of vehicles are
forecast to be electric, and over 10% of private EVs participating in V2G programs, providing an
additional 4 GW/49 GWh of coordinated storage
. Vehicle-to-grid is the same bargain in a
driveway rather than on a wall.
What the coordination is worth
The plan does not treat this as a nice-to-have. It quantifies it. Coordination
enables CER to respond to market signals, helping to reduce operational demand from the grid and
moderate prices during the evening peaks
, and in the optimal development path that reduction
would avoid up to $5 billion being spent on additional utility-scale storage in the NEM
.
Read that the way a household should. Big batteries in paddocks are one way to get through the
evening peak. Half the country’s home batteries acting together is another, and the plan has
costed the second as up to five billion dollars cheaper. The saving is not booked to the people
whose batteries do the work; the plan is explicit that
This coordination benefits all consumers, not just those who own CER
.
The condition the plan puts on its own assumption
This is the part worth knowing before anyone tells you a VPP is inevitable. Having set out the
coordination case, the ISP says plainly that the conditions for it do not currently exist:
more is needed to build consumer awareness and social licence, so that higher levels of
coordination can be reached
.
And on the terms:
Consumer protections must be in place so that homeowners and small businesses can trust those
providers to run their CER safely, in their interest, and without them having to be energy
experts
. That is the system operator saying, in its own planning document, that the trust the
forecast depends on has to be built and that protections are a precondition rather than a
refinement.
It names what it is relying on to close the gap: financial incentives from third-party
providers, VPP trials including Project EDGE and Project Symphony, V2G trials supported by ARENA
and CSIRO, the National CER Roadmap, and policy support including the Cheaper Home Batteries
Program to remove financial barriers
.
The near-term number moved because of a rebate
One line in the plan shows how quickly this forecast responds to policy. AEMO writes that
High connections under the Cheaper Home Batteries Program in early 2026 have led to an update in
the ISP’s near-term forecasts
. A household rebate ran hot enough in a few months to move
the national planning document’s short-term numbers.
That cuts both ways, and it is worth saying so. A forecast sensitive enough to be revised up by one rebate is a forecast that can be revised down by its withdrawal.
What this does not tell you
These are scenario assumptions for 2050, not commitments and not predictions about your street. The ISP is a planning document: Step Change is its central case among several, and the coordination share is an input to modelling rather than a target anyone is accountable for hitting. Nothing in it obliges you to join a VPP, and nothing in it stops you.
We also cannot tell you from this document how many batteries are in a VPP today. The plan forecasts the share for 2050 and does not publish a current enrolment figure, so the obvious comparison, assumption against reality, is not available here. That is the number worth chasing next, and until somebody publishes it the honest position is that the plan assumes a behaviour whose present level is not disclosed in the plan.
Our view, labelled as such: the assumption is defensible and the disclosure is good. AEMO put the number in writing, put a dollar value on it, and said in the same breath that the trust is not there yet, which is more candour than most planning documents manage. The gap is not in the plan, it is in what reaches households. A person choosing a battery this year is choosing a piece of national infrastructure that the country is counting on being shareable, and almost nothing in the retail conversation says so.
How we did this
Every figure and quotation comes from AEMO’s 2026 Integrated System Plan, 141 pages,
downloaded and read directly on 26 August 2026. Figures are the Step Change scenario unless the
text says otherwise, and the $5 billion is stated for the optimal development path. We have
quoted the plan’s wording rather than paraphrasing where the wording carries the caveat,
because up to
and just over half
are doing real work in those sentences.
A small finding worth recording for anyone else reading this document: the ISP does not use
the word orchestrated
anywhere, which is the term the retail and trade press generally
uses for this. It says coordinated
throughout, and searching the plan for the popular
term returns nothing at all.
One access note. aemo.com.au returns 403 to a scripted request for its HTML pages, including the ISP landing page, but serves the PDF itself without complaint on a direct request. If the page will not load, that is not evidence the document is unavailable.
We have not asked AEMO anything, and this is a reading of a published plan rather than an account of its modelling. Where we have drawn an inference, it is labelled as our view.
Sources
- AEMO, 2026 Integrated System Plan (PDF, 141 pages, downloaded and read 26 August 2026): the Step Change small-scale battery trajectory of 5 GW/12 GWh in April 2026 to 12 GW/33 GWh in 2030 and 35 GW/78 GWh in 2050; the two-thirds of solar dwellings with batteries and the just-over-half VPP share; the 80 per cent EV forecast and the over 10 per cent V2G share with its 4 GW/49 GWh; the up to $5 billion of avoided utility-scale storage; the consumer awareness, social licence and consumer protections passages; the named trials and the National CER Roadmap; and the Cheaper Home Batteries Program revision to near-term forecasts.
See an error? Request a correction and we will check it against the plan and log the outcome here.