Dan Mercer

Well, we alluded to this earlier, Sam, when we were talking about the difference between this year's crisis and the one in 2022.

And a big explanation for that difference is batteries.

It's really quite extraordinary how quickly and how seriously they've come onto the scene in Australia.

Four years ago, there basically weren't any big batteries in Australia's major grids.

And now there are heaps.

I mean, in Western Australia, where I live, there's now so much battery capacity in this state's main grid that they're able to meet about 40% of peak demand.

The eastern states, I'm told, are about 18 to 24 months behind WA, but the same story is playing out there and the eastern states will catch up for sure.

In simple terms, those batteries are taking excess solar power from the middle of the day and discharging it in the evening as the sun sets.

The effect of this is we simply need less gas power to meet peak demand.

It just means that prices are not rising nearly as high as they were, you know, short-term spot market wholesale prices are not rising nearly as high as they were when the market depended much more on very expensive gas power.

Because there are now so many batteries and they have such a collective capacity, albeit restricted to about four hours when they run out,

Yeah, there's just now so much more competition to supply that evening market.

The flip side of this is daytime prices are also flattening, but in the opposite direction.

Until recently, there was so much solar power in the middle of the day and nowhere for it to go, really, that prices were cratering, even turning negative, meaning generators had to pay someone to take their output off their hands.

With batteries, they're soaking up most of that surplus solar production, and so daytime prices are now rising.

But arguably, Sam, all of this is good news for consumers because it means the market is less volatile.

And hopefully this means more stability for bills too.

I think there's probably more to it, Sam.

I mean, it's true that generation costs are easing, but that's relative to the extraordinary highs that we saw a few years ago.

We've never seen highs like that.