Battery prices plunge 60 pct in two years, changing face of grid and the nature of contracts
Neoen’s Collie battery. Supplied.
Giles Parkinson
Feb 1, 2026
Battery
Storage
The new owner of one of the most successful battery storage and renewable energy developers in Australia and the world, says battery storage costs have fallen 60 per cent and changed the face of the grid as well as the nature of long term contracts.
The observations were made early Saturday (US time) by the head of Brookfield Renewables, the global monolith that just over a year ago snapped up the assets of Neoen – the French-based company that has led the energy transition in Australia – for $11 billion.
“Make no mistake, batteries are the fastest growing part of our platform today, and we expect that to continue,” Connor Teskey, the CEO of Brookfield Renewable Partners, told analysts in a call to discuss the company’s full year earnings.
“This is really driven by … the simple fact that battery costs have come down so dramatically over the last decade. They’ve come down more than 60% over the last 24 months, and as a result, they are becoming an increasingly economic solution in more and more markets around the world.
“This dynamic continues, costs continue to go down, technology advances continue to be made, and therefore, we are seeing batteries as a potential solution in more and more of our projects and in more and more of our markets.”
Neoen has built and is building some of the biggest battery projects in Australia and around the world, including the Collie battery in Western Australia (pitured above) that is built to support the rollout of renewables, and rooftop PV in particularl, and a similar sized battery in Ontario, to support that province’s nuclear dominated grid.
Brookfield is also heavily invested in nuclear, having picked up a majority stake in the financially stricken Westinghouse in late 2023, and is hopeful that the Trump Administration’s enthusiasm for all technologies that are not renewable will help get its small modular reactor hopes over the line.
But for the moment, in an energy hungry world, Teskey is in no doubt what technologies are lowest cost and fastest to deploy, and top of the buying list for corporations, particularly in IT, wanting to power their new investments.
Battery storage, he says, can be executed faster than any other technology. “Much of the equipment shows up pre-built on site, and because batteries and energy storage reduce grid congestion as opposed to add to it, there is significant incentive from grids to bring batteries online faster.
“Therefore, yes, we have accelerated or increased our outlook for batteries,” he added, noting a 1 GW deal with an unnamed Sovereign Wealth Fund partner and his company’s hunger for more M&A opportunities.
Teskey also noted a change in the nature of contracts written with customers of bit battery storage.
“We’re very excited about the evolution of what we’ve seen in the energy storage space, where only perhaps 2, maybe 3 years ago, a lot of the revenue models were arbitrage or merchant-related.
“Increasingly, what we are seeing is long-term tolling or almost take-or-pay capacity contracts on newly built battery assets. And very simply, as an example of the large project that Neoen is pursuing, that would be on a 100% contracted basis for the entire life of those assets.”
He also added: “Our recent acquisition of Neoen significantly expanded our operating footprint, capabilities, and development pipeline in battery technology, and we expect to quadruple our battery storage capacity over the next three years to over 10 GW.”
Teskey says energy demand is rising at a pace not seen in decades, driven by the multi-decade trends of electrification and renewed industrial activity, and further amplified by AI and the unprecedented investment and energy consumption from some of the largest companies in the world.
“As a result, we are not only transitioning the grid, but adding substantial net new generation for the first time in decades,” Teskey said.
“Said another way, we have shifted from a period focused on energy transition to a period focused on energy addition. This shift is driving a move from incremental grid upgrades to large-scale expansion, prioritizing fast-to-deploy renewables, scale baseload generation, and capacity to ensure reliability.
“Meeting this demand will require a mix of all the scale and efficient technologies over time. Solar and onshore wind will play a critical role, given their speed to market and low cost.
“Hydro and nuclear are important for their baseload and scale, natural gas for its flexibility, and battery solutions will be critical for ensuring the reliability of grids going forward.”
Interestingly, Teskey says there is “no slowdown” in the deployment of solar and battery storage in the US, its biggest market, despite the efforts of the Trump administering.
“We are seeing an acceleration. And this is driven by solar …. it is quick to deploy, it’s cheap, it’s the lowest cost form of production. And quite frankly, the corporates need the power as quick as possible.
“So on solar, we are seeing no change, if anything, an acceleration, and we’re trying to pull projects forward as fast as possible. On wind, onshore wind, there has been some slowdown in permitting from the federal government, but projects are still getting done.”
See Renew Economy’s Big Battery Storage Map of Australia for more information.
reneweconomy.com.au |
