What actually drives grid-scale battery earnings in the Australian NEM up and down — price volatility, spreads, the duck curve, and fleet cannibalisation.
Battery revenues in the NEM are famously volatile — strong months and weak months can differ by a factor of two or more. That is not random: a battery earns from the differences between prices, so its income tracks how much prices move, not how high they are on average. A handful of forces drive that.
The single biggest driver is the intraday price spread — the gap between the cheapest and dearest intervals of the day. Wide spreads (calm-then-spiky days, heatwaves, wind droughts, generator outages) are payday for arbitrage; flat, mild days leave little to capture. Because volatility is weather- and outage-driven, revenue is lumpy: a few extreme intervals a month can dominate the total.
Rooftop and grid solar have pushed midday prices toward — and often below — zero, while evening peaks stay high. This "duck curve" is what a battery arbitrages: charge cheap at midday, discharge into the evening ramp. As the curve deepens the arbitrage opportunity grows, but its exact timing shifts with the seasons and with how much solar and wind are running on a given day.
For many units FCAS is the swing factor. Contingency FCAS prices can spike when the system is tight or islanded (South Australia is the classic case), lifting revenue sharply for units holding capacity there. When FCAS markets are calm and saturated, that stream thins out.
The longer-run force is the fleet itself. As more storage comes online, batteries increasingly charge in the same cheap intervals and discharge into the same peaks — flattening the very spread they rely on, and setting the price against themselves more often. This self-cannibalisation is why per-MW revenues can fall even as the market works exactly as intended. NEMPulse tracks it directly on the market economics page.
Two cautions. First, headline revenue scales with size, so compare batteries on a normalised basis ($/MW or $/MWh), not in raw dollars. Second, public figures are gross spot estimates — a unit heavily contracted on caps may look mediocre on spot while doing fine commercially, and vice versa.
More guides: How does a grid-scale battery make money in the NEM?2-hour vs 4-hour batteries: why duration matters in the NEMWhat is capture rate? Benchmarking battery performance
See also: Market economics — is the fleet competing with itself?Market events
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