In December 2025, grid-scale battery revenues in the National Electricity Market (NEM) fell 9% month-on-month to $62k/MW/year - the lowest level since March 2024. Mild peak demand and the addition of 660 MW of new grid-scale battery capacity kept energy market spreads subdued across the NEM.

With little volatility in the Lower Contingency FCAS markets, revenue was supported primarily by energy arbitrage. December highlights how quickly FCAS-driven upside can disappear, and why alternative revenue streams are crucial for battery returns.

Batteries could have lifted quarterly earnings by trading cap contracts. Cap prices for Q4 settled around $15/MWh below the premium, creating an opportunity to capture additional value.

This article reviews grid-scale battery revenues in December 2025, including comparisons with prior months, the contribution of energy and FCAS markets, results by state, and asset-level drivers of performance relative to the index. It also assesses cap contract values, the share of capacity a battery can reliably defend, and the impact on merchant revenues.

Find last month’s report here.

marcus@modoenergy.com

Executive summary

• NEM-wide battery revenues averaged $62k/MW/year, down 9% from November and the lowest level since March 2024.
• Mild demand and rapid battery build compressed spreads everywhere except South Australia – tying first with New South Wales for the widest spreads.
• Cap prices for Q4 settled around $15/MWh below the premium. In a low-volatility quarter, cap trading could have lifted quarterly revenues by $4–16k/MW.

December battery revenues fell 9% month-on-month due to mild demand and rapid battery deployment

NEM-wide battery revenues averaged in December. Mild peak demand and additional battery capacity entering the market kept energy price spreads subdued across most regions. December also typically sees weaker commercial and industrial demand as activity slows over the Christmas and holiday period.