What the next decade asks of us Australia is not just replacing coal's energy. It is replacing coal's reliability and the system services that hold the grid together. The investment decisions made in the next few years will lock in the shape of the grid for generations, so they need to be judged on the full life of the asset, not the lowest upfront invoice. That means costing storage against the days the wind drops, the recharge that never comes and valuing the difference between capacity and capability. The portfolios that hold up will not be the ones that chase the cheapest megawatt hour today. They will be the ones built to keep delivering firm power and system security when the next wind drought arrives. Australia is not confronting this challenge alone. Across Europe, grid operators are planning for increasingly severe renewable energy droughts with research suggesting hundreds of terawatt-hours of long-duration storage may ultimately be required to maintain reliability during extended dunkelflaute events². Britain has responded by introducing a dedicated investment framework for long-duration energy storage, while Spain's 2025 blackout reinforced the importance of maintaining system strength alongside high levels of renewable generation⁴ , ⁵.
The lesson emerging across these markets is remarkably consistent. Building renewable generation is only the first stage of the transition. The harder task is ensuring the system can continue to provide affordable, reliable electricity when the wind is not blowing and the sun is not shining. That is rapidly turning long-duration storage from an energy investment into critical national infrastructure. The choice was never batteries or pumped hydro. Batteries are likely to dominate short-duration balancing and fast-response services. Pumped hydro is likely to remain critical for long-duration firming, synchronous support and resilience during extended renewable droughts. The real question facing Australia's National Electricity Market is not whether we need long-duration storage. It is whether we build enough of it, soon enough, while coal remains available to support the transition. Markets around the world are discovering that replacing coal's megawatt-hours is relatively straightforward. Replacing the reliability, stability and security it provides is the real challenge. The systems that emerge strongest from the energy transition will not be those that generate the most renewable power. They will be those that can depend on it when conditions are at their worst.
Unlocking the grid: Investing in energy security
References 1. ABC News, June 2026
5. Australian Energy Market Operator (AEMO), 2024 Integrated System Plan 2024 6. International Energy Agency (IEA), 2024 Batteries and Secure Energy Transitions https://www.iea.org/reports/batteries-and-secure-energy-transitions 7. Nature Communications, Ziegler, M. et al., 2024 The value of long-duration energy storage under various grid conditions in a zero-emissions future 8. ABC News, October 2025 Snowy 2.0 faces cost blowouts beyond previous $12 billion target
Electricity price spikes and batteries drain as wind drought tests green flag-bearer 2. Kittel, M. & Schill, W-P., 2026 Quantifying the Dunkelflaute: An analysis of variable renewable energy droughts in Europe, Communications Earth & Environment 3. ENTSO-E, 2025 Update on the Iberian Peninsula System Separation Event of 28 April 2025
4. UK Department for Energy Security and Net Zero, 2024 Long Duration Electricity Storage Cap and Floor Scheme
For many years, energy security has largely been seen through the lens of geopolitics: oil supply, fuel imports, the risk of disruption from armed conflicts or trade disputes. Increasingly, though, it is becoming something quite different: an infrastructure challenge.
Jason Fonti Head of Infrastructure Investment & Capital Projects, APAC, GHD
Rajiv Khakhar Executive Director, Asia, Morrison
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