​Battery energy storage in the NEM earns a majority of revenues from energy trading. This is markedly different from when the first grid-scale batteries came online. At that time, there were higher FCAS prices, including some periods of exceptional return. In the past few years, battery buildout has pushed FCAS revenues down under normal conditions.

However, transmission outages still cause periods of high FCAS prices and subsequent revenues in South Australia and Queensland.

This report analyses which transmission outages have the greatest impact and why, how bidding behaviour interacts with supply constraints to drive up prices to extremely high levels, and how transmission and battery buildout will reduce these opportunities in the future.

​Executive summary

• Transmission line outages have caused significant FCAS earnings opportunities. 19% of revenues since 2023 for batteries in Queensland, and 23% for batteries in South Australia, came from outage-constrained FCAS.
• These opportunities are relatively rare (once or twice a year) as they rely on outages in a few major lines. But they can be a major driver of revenues; 47% of South Australian battery revenues in 2025 so far have come from outage-driven FCAS price spikes.
• These opportunities will be short-lived, as improved interconnections and battery buildout relieve FCAS markets even in constrained conditions. Developers should not rely on outage-driven FCAS earnings to improve the investment case for planned projects.
• However, market operators should continue to account for outages on interconnector line complexes. They will be a major driver for extremely high earning opportunities in FCAS until new providers - mainly batteries - enter the grid.

One-fifth of South Australian and Queensland battery revenues since 2023 came from outage-constrained FCAS

Under normal conditions, BESS and demand-side response providing FCAS at low prices have saturated FCAS markets. But transmission outages can cause a need for procurement of FCAS within a region, constraining supply and driving up prices. This is known as FCAS islanding.

47% of South Australian battery revenues in 2025 so far have come from providing local Lower 1-second contingency FCAS (L1) in July and August. And in 2024, one-third of revenues for Queensland batteries came from local procurement of FCAS.