The four ways a grid-scale battery earns revenue in the Australian NEM — energy arbitrage, FCAS, frequency performance payments and contracts — and how they stack.
A grid-scale battery in the Australian National Electricity Market (NEM) earns money by buying and selling flexibility. It has no fuel cost, so almost everything it earns is margin — but that margin comes from several distinct markets at once, and a well-run battery is optimising across all of them in every five-minute dispatch interval. There are four main revenue streams.
The most intuitive stream: charge when the wholesale spot price (the Regional Reference Price, or RRP) is low, discharge when it is high, and keep the spread. In the NEM the price shape is dominated by the "duck curve" — cheap, solar-flooded middays and expensive evening peaks — so a battery typically charges in the afternoon and discharges into the evening ramp. How much it can capture depends on its duration (how many hours it can sustain full output) and on how volatile prices are that day.
Frequency Control Ancillary Services are separate markets where AEMO pays units to hold capacity in reserve to correct grid frequency around 50 Hz. Batteries dominate FCAS because they respond within milliseconds. There are ten FCAS markets — fast contingency services that fire when a generator trips, plus two continuous regulation services that follow AEMO's control signal second by second. Crucially, capacity a battery commits to FCAS in an interval is unavailable for arbitrage in the same interval, so the two compete for the same megawatts. For many smaller NEM batteries FCAS, not arbitrage, is the larger earner.
From June 2025, AEMO's FPP scheme pays or charges regulation-FCAS providers according to how accurately they track its control signal. A battery that follows the signal well earns FPP credits; one that tracks poorly is debited. It is a smaller, newer stream, and because its inputs are not fully public NEMPulse treats FPP figures as estimated.
Many batteries also earn outside the spot markets entirely — through cap contracts and hedges sold to retailers, tolling or offtake agreements, or state-backed network-support schemes (such as SIPS in South Australia). These are private and not published, which is the single biggest caveat on any public revenue estimate.
NEMPulse reconstructs the first three streams from AEMO's public 5-minute data: it settles each interval's energy and FCAS dispatch at the observed spot price to estimate gross market revenue. It cannot see the fourth. So every figure on NEMPulse is gross spot revenue — what a unit would earn settling at the pool price — and deliberately excludes contracts, hedges and network schemes. Actual commercial revenue will differ, sometimes substantially.
More guides: What is FCAS? Frequency control in the NEM, explainedWhy do battery revenues rise and fall in the NEM?What is capture rate? Benchmarking battery performance
See also: Energy arbitrage — glossaryBattery fleet revenueMethodology
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