Post: Heatwaves, price spikes and the limits of short-duration storage

Heatwaves, price spikes and the limits of short-duration storage

During the Australia Day heatwave, South Australia’s battery fleet was put to a real-world stress test.

As temperatures climbed beyond 40°C, a four-hour AU$1,000/MWh pricing event unfolded across the South Australian region of the National Electricity Market (NEM). Battery energy storage systems (BESS) entered the evening peak approximately 90% charged, positioning them well to capitalise on extreme volatility. From a revenue perspective, the event delivered. From a system and asset-design perspective, it revealed some limitations.

Imperfect value capture

South Australia’s batteries discharged into successive high-price intervals as expected, contributing to what became the third-highest average daily spot price in NEM history. But most assets were unable to sustain output across the full duration of the pricing event.

Key observations from the event include:

• the average battery duration in South Australia remains below 1.5 hours
• many assets exhausted their energy before the most prolonged high-price periods concluded
• some batteries discharged too early, while others were constrained simply by limited duration
• by around 20:00, depleted batteries had exited the market, leaving thermal generation to set prices for much of the remaining window

The result: exceptional volatility monetisation early in the event, followed by missed opportunity as scarcity conditions persisted.

What determined performance?

This event reinforced that battery success is no longer just about capacity; it’s about precision. The assets that performed best shared several characteristics:

• disciplined charge retention into the most valuable intervals
• sophisticated forecasting and dispatch optimisation
• clear alignment between asset duration and expected stress-event profiles

In prolonged scarcity events, short-duration storage faces an unavoidable challenge: once energy is depleted, optionality disappears, regardless of how high prices go.

Lesson for the NEM

South Australia continues to act as the NEM’s live test case for storage economics at high renewable penetration. This event highlights a clear trajectory:

• batteries are increasingly effective at monetising volatility
• short-duration BESS struggle in extended stress events
• longer-duration storage, alongside evolving market frameworks, will be critical as renewable penetration deepens
• advanced optimisation platforms will increasingly separate average returns from best-in-class outcomes

As heatwaves become more frequent and demand peaks sharpen, the value of holding energy for the right moment will only increase.

At GridBeyond, we work with battery owners, developers and investors to ensure assets are:

• optimised for real-world volatility
• dispatched with forward-looking price intelligence
• designed and operated with duration, degradation and thermal limits fully accounted for

South Australia’s Australia Day event was a reminder that storage economics shine brightest when technology, market insight and optimisation work together, and that duration matters more than ever.

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