In January 2025, average battery energy storage revenues in the Australian NEM decreased to $105k/MW/year. However, extreme price events in Queensland meant that batteries there significantly outperformed the rest of the NEM. Queensland batteries earned five times more revenue than batteries in other regions. In contrast, New South Wales battery revenues decreased by 77%.
Executive Summary
- The Modo Energy NEM BESS Index in January 2025 was $105k/MW/year, 7% lower than the previous month
- Battery revenues significantly varied by state, from $47k/MW/year in New South Wales to $277k/MW/year in Queensland
- Price spikes in Queensland led to batteries there earning more than five times the revenue of batteries in other states
In this article, we refer to the Modo Energy NEM battery index, which represents the average revenues (inclusive of marginal loss factors) earned by batteries within the NEM across a period of time. The average is weighted and normalised by a battery’s rated power. All currency figures quoted are in Australian dollars (AUD).
The index and this article cover merchant revenues, defined as revenues from the NEM’s publicly traded wholesale energy and FCAS markets. Batteries may have other revenue sources, such as government contracts and power purchasing agreements.
This article is part of an ongoing series, reporting on changes in battery energy storage revenues in the NEM each month. For our first article, access has been made free.
Average battery revenues in the NEM decreased by 7% from December
Grid-scale battery revenues averaged $105k/MW/year in January 2025, a 7% decrease from the figure in December 2024. This is also 31% lower than the figure in the same month in 2024 and 29% below the 2024 annual average of $149k/MW/year.
Like in December 2024, energy trading continued to be the dominant stream for merchant revenues. In January, 84% of revenues came from energy trading, 12% from contingency FCAS, and only 4% from regulation FCAS.
Energy revenues were relatively similar to January 2024. However, batteries in January 2024 received exceptionally high revenues from raise contingency FCAS. This was not the case in January 2025, resulting in lower revenues.
Price spreads decreased in all states except Queensland
Average 1-hour spreads for energy halved in New South Wales, decreased in South Australia and Victoria, and stayed flat in Queensland.
In all mainland states except Victoria, days with extreme energy price spreads significantly drive up the average. Excluding days with spreads of at least 500 dollars, average energy spreads are much lower.
FCAS prices remain low, with Raise and Lower Contingency services moving in opposite directions
FCAS prices across the NEM remained relatively stable in January compared to December 2024. Raise Contingency prices decreased from their previous low set in December. This was primarily due to reduced Raise 1-second FCAS prices.
Compared to January 2024, Raise Contingency prices were much lower. This was mainly because Raise 1 Second prices were much lower in January 2025. 1-second FCAS was introduced in October 2023. As the 1-second FCAS market matured, Raise 1-second FCAS prices started to drop in February 2024.
Lower Contingency prices increased from Lower 60 Second FCAS prices in Queensland going over $10,000/MWh for an hour on 15 January. However, the monthly average did not increase significantly since the price spike was in only one state for an hour.
Queensland battery revenues were more than five times that of other batteries in the NEM in January
Although NEM-wide battery revenues slightly decreased in January, revenues by state differed greatly. New South Wales batteries earned 77% less revenue compared to December, while Queensland batteries earned 30% higher revenue and continued to outperform the rest of the NEM.
New South Wales revenues fall 77% with fewer extreme price spikes
Battery energy storage in New South Wales earned $47k/MW/year in January. This was 77% lower than the earnings of $205k/MW/year for December 2024. This was due to a period of extremely high energy prices on 2 December that was not repeated in January.
From 17:50 to 18:35 on that day the energy spot price increased to over $10,000/MWh. Batteries in the state were able to export during the 45-minute period and earn very high revenues from energy trading. There were New South Wales energy price spikes in January, but much fewer, with the average price spread in the region halving.
South Australia revenues fall 22% with no repeat of price spikes
South Australian revenues also decreased by 22% from December for a similar reason. On 5 December, energy prices in the state went over $10,000/MWh for a total of 15 minutes in the early afternoon, and batteries also took advantage of that. No such arbitrage opportunities happened in January. In fact, energy prices in South Australia did not exceed $1,000/MWh for the entire month.
Victoria revenues continue to trend below the NEM average
Victorian battery energy storage systems earned 19% more than in December. Victorian revenues for both months are still lower than the NEM average due to the state's lack of extreme prices. In January, energy prices in Victoria did not exceed $480/MWh; in December, they did not exceed $769/MWh. This meant the state continued to see the lowest price spreads of the four the mainland NEM regions.
Queensland revenues jumped 30% to outpace the rest of the NEM
Despite decreasing NEM-wide revenues, Queensland battery revenues increased by 30% from December to $277k/MW/year in January. This was over five times higher the average revenue for batteries in the rest of the NEM, at $53k/MW/year.
This outperformance was due to more periods of prices above $10k/MWh in January than in December. In December, Queensland energy prices exceeded $10k/MWh for 8 trading intervals, or 40 minutes. In January, prices went over that threshold for 21 trading intervals, or 1 hour and 45 minutes.
57% of Queensland battery revenues in January were earned on one day
Extreme prices on 22nd January allowed batteries in Queensland to generate very high revenues from energy trading, earning 57% of their revenues for the month on this day alone. Batteries earned over 4 times the second-highest earning day of the 15th January, when FCAS Lower 60 Second prices spiked in Queensland.
On that day, Brisbane and other parts of Queensland experienced very high temperatures, leading to record-breaking electricity demand in the state. This resulted in energy prices in the state going over $10k/MWh from 18:00 to 19:35.
But even at very high prices, some batteries did not discharge at maximum power. During the spike, batteries in Queensland generated a maximum combined 375 MW, only 83% of the 450 MW of registered battery power in the state.
While Bouldercombe discharged at an average of 91% rated power across the price spike, other batteries only reached between 54-68%.
The different discharge profiles led to similar batteries performing differently across the month. Bouldercombe earned $365k/MW/year in January, 38% more than Western Downs and Chinchilla, even though all are two-hour batteries in Queensland.
To conclude, extreme price events continued to drive NEM battery energy storage revenues in January 2025. Since these events are often isolated to a single state, battery revenues diverged significantly by region. However, even in each individual state, differing dispatch profiles resulted in similar batteries earning varying revenues.