Batteries elevated in optimised system strength plan for NSW grid

Transgrid has optimised its preferred system strength portfolio in response to rapidly changing market conditions, including the rising cost and delayed availability of synchronous condensers, and updates to anticipated NSW coal retirement timelines.

The grid operator is now inviting feedback on the updated plan, which reconfirms the critical need for synchronous condensers but reduces the number of additional units required in future stages of the program.

“The power system is becoming more complex at a faster rate, with shifting demand patterns, evolving technologies and multiple possible future pathways,” Transgrid Executive General Manager of Network Jason Krstanoski said.

“In this environment, maintaining flexibility in how system strength is delivered is critical to ensuring the lowest cost outcome for consumers.”

In the revised portfolio, Transgrid has reduced the number of synchronous condensers required for system strength on its network from ten large units (or equivalent) to eight, complemented by existing system support services including hydro and gas, and an expanded role for grid-forming batteries.

“Synchronous condensers remain a critical foundation for system strength in NSW. The Accelerated Phase 1 program, delivering the equivalent of five large units, is essential to keep the grid secure following the retirement of Eraring Power Station in 2029, and is progressing as planned,” Mr Krstanoski said.

“The timely deployment of additional Phase 2 synchronous condensers remains essential to enable subsequent coal power station retirements in NSW.

“Updated modelling from the Australian Energy Market Operator anticipates that several NSW coal generators may remain in service longer than previously assumed, meaning they can provide system strength for longer during the transition.

“Together, these changes shift the relative value of different technologies and support a greater role for more flexible, non‑network solutions.”

Transgrid’s initial plan relied heavily on batteries, but only for a grid-stabilising role to enable new wind and solar generators to connect and operate securely, known as the ‘efficient’ level of system strength.

In the updated portfolio, the delay to expected coal retirement dates has provided additional time for grid-forming batteries to prove they can also help meet the ‘minimum’ level of system strength needed to keep the power system safe and secure.

“We’re creating a pathway for grid‑forming batteries to form part of the minimum-level portfolio in a measured way, with their role subject to confirmation of their technical credibility, which we hope to see in the coming years,” Mr Krstanoski said.

“This includes confirming that battery systems can reliably provide the required characteristics and performance of system strength needed for the safe operation of protection systems, before we rely upon them to deliver it in practice.

“Our portfolio includes fallback options such as hydro and gas support, ensuring minimum system strength levels can still be delivered if battery capability is delayed or under-delivers.

“By combining proven infrastructure with emerging technologies, we are maintaining system security while increasing flexibility and reducing costs for consumers.”

Transgrid’s preferred portfolio delivers $39 billion in market benefits compared to a ‘do nothing’ scenario, plus $467 million in additional benefits if grid-forming batteries prove credible to contribute to the minimum-level portfolio.

The updated analysis found that an additional $1.9 billion in benefits could be achieved if the Phase 2 synchronous condensers were able to be accelerated.

Transgrid's Material Change in Circumstances assessment report, and more information on how to make a submission by 1 August 2026, can be found here.

Media enquiries: Mark Nolan – 0429 047 136