We need more than short-term storage to support the closure of Eraring

Energy transition

Gas

Renewables

Renewable energy

5 min read

We need more than short-term storage to support the closure of Eraring

Written by

Sean Fleming

Published on

12 February 2026

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260211 Transmission Mwh Storage Capacity In The NEM 1

The recently announced two-year extension of the Eraring Power Station came with little surprise across the energy sector.

The Australian Energy Market Operator’s (AEMO’s) recently released Transition Plan for System Security clearly shows that the National Electricity Market (NEM) is not yet ready for the retirement of the NEM’s biggest generator.¹

The Eraring announcement has been met with calls for the urgent introduction of more ‘big batteries’ and renewables.

These commentators are right - we need vast amounts of energy storage to support the electricity system during extended periods of low renewable generation. However, to close our remaining coal power stations, we need what’s known in the energy sector as 'deep energy storage'. That is, the kind that can run for days or weeks, not just hours.²

Retiring coal power stations is one of the biggest single emissions reduction activities that we can undertake, but before we take this step, we must ensure the closure of Eraring won’t impact the reliability of our energy system.

260211 Transmission Mwh Storage Capacity In The NEM 2

The vital role of deep storage during the transition

The role of deep energy storage is most critical during winter. At these times, heating demands can be high, solar is reduced, and wind can be strong but intermittent.³

Batteries will play a crucial role in supporting renewables but can’t provide the deep energy storage we need to support the electricity system through major outages or extended renewable droughts. We need firm, dispatchable generation that can run for days or weeks.

This is the role that gas powered generation (GPG), supported by deep gas storage, will play. AEMO’s 2026 draft Integrated System Plan, published in December 2025, forecasts the need for investment in approximately 12GW of new GPG by 2050 to support the integration of renewables.⁴

Comparing the capacity of our biggest batteries to the energy available at our largest gas storage facilities on Australia’s east coast clearly illustrates this.

The biggest battery in the NEM is currently a 1,770MWh grid-scale storage facility in NSW. The Iona Gas Storage Facility, south-west of Melbourne can store 24,400TJ of gas, the energy equivalent of around 3,800 of these ‘big batteries’.⁵

These enormous gas storage facilities will provide the resilience our energy system needs once the coal power stations have exited the system. Other options such as pumped hydro and compressed air storage are maturing but are many years away from being able to provide the required level of long duration energy storage.

Just how much energy these gas storage assets hold compared to batteries in the NEM and other storage options can be clearly seen below.

260211 Transmission Mwh Storage Capacity In The NEM 4

'Proposed' is capacity that is classified as committed and anticipated by AEMO. 'Existing' is capacity that is operational. All PJ to MWh conversions assumed a straight energy conversion (no heat rate applied).

Other gas storage projects are also under development. In February 2025, APA announced the proposed Riverina Storage Pipeline as part of APA’s East Coast Grid Expansion Plan. This project would add 200 terajoules of new gas storage with the potential for expansion up to 500 terajoules, the equivalent energy storage of more than 75 ‘big batteries’.

Storage pipelines like Riverina are complementary to larger deep gas storage infrastructure. Where larger facilities support seasonality and demand across the year, storage pipelines are agile, providing intra-day localised solutions and supporting the integration of new gas-powered generation.

260211 Transmission Mwh Storage Capacity In The NEM 3

GPG’s role in essential system services

Underlying the decision to extend Eraring is a clear concern from the market operator about its ability to operate the NEM securely and within defined ‘technical limits’ in its absence.

These ‘technical limits’ are measurable characteristics – such as frequency, voltage, and power flow – required for the safe and stable operation of the NEM.⁶ The large, rotating mass created by thermal generators, both coal and gas, has historically played this role.

AEMO has acknowledged that the assets required to deliver system strength in Eraring’s absence would not have been in place ahead of the earlier planned retirement date.⁷ However, the recently released NEM Review Final Report presents a pathway to address this issue.

Gas turbines can provide similar system services to the turbines in retiring coal power stations. Through the delivery of new GPG, the NEM can secure a lower cost solution to the issue of system security to standalone solutions, such as synchronous condensers. And new gas generators can also operate with a ‘clutch’ and provide these essential system services without burning gas.

Deep gas storage and new GPG infrastructure will ensure our energy system has all the tools it needs to operate securely as we retire our coal power stations.

¹ AEMO, 2025 Transition Plan for System Security, December 2025, p8
² AEMO, 2024 Integrated System Plan, June 2024, p65
³AEMO, 2024 Integrated System Plan, June 2024, p68
⁴ AEMO, 2026 draft Integrated System Plan, December 2025, p70
⁵ The Iona gas storage facility stores 24,400TJ or 6,777,777MWh of energy. Other big batteries are planned in the NEM.
⁶ System strength refers to the ability of a power system to remain stable following a disturbance.
⁷ AEMO, 2025 Transition Plan for System Security, December 2025, p8