Charging Ahead with Battery Storage - How Battery Storage Is Transforming Manufacturing

The Australian manufacturing sector is approaching a significant energy transition as the economics and capabilities of battery storage continue to evolve.

According to Paul Morrissy, Senior Manager, Renewable Solutions at RACV Commercial Energy Solutions, the shift has become noticeable in enquiries from businesses. “Two years ago, the vast majority of our sales activity was solar only. Today, battery storage features in a growing proportion of discussions, either as part of new solar projects or as retrofits to existing sites,” he says.

This trend, he says, reflects wider momentum across the industry. “Businesses are no longer asking if batteries make sense, but how and when to deploy them. As economics continue to improve and operational use cases expand, RACV expects battery storage to become a standard feature of commercial and industrial energy systems over the next five years.”

This move comes as falling system prices, regulatory changes and shifting energy pricing patterns converge to reshape the economics of storage.

“The most significant has been the rapid decline in costs of battery energy storage systems (BESS) — roughly a 30 per cent reduction over the past two years,” Morrissy says.

“At the same time, regulatory changes have enabled commercial batteries to access multiple value streams.”

He adds that pricing dynamics have moved away from the traditional midday peak.

“We’ve moved from a traditional midday peak to higher evening and shoulder peak prices, largely driven by increased solar penetration. That creates stronger incentives for load shifting and energy arbitrage.”

“When you combine lower capital costs, expanded revenue opportunities, and more favourable price signals, battery business cases are now stacking up with much greater certainty.”

Morrissy says the result is a clearer and more compelling business case for BESS – and manufacturing businesses with high energy loads — including advanced manufacturing and materials handling — are among those best situated to take advantage.

A growing part of RACV’s work involves integrating commercial batteries into virtual power plants (VPPs), an integrated system of energy assets including batteries, solar, and controllable loads.

A battery capable of participating in a VPP does more than operate as a standalone asset, Morrissy says.

“In addition to solar soak up and load shifting, it can respond dynamically to market signals, providing services such as frequency control and wholesale price arbitrage,” he says.

“The system makes real time decisions to maximise the overall value of the battery, rather than just minimising a site’s energy bill.”

One outcome that has surprised Morrissy is how quickly the economics of battery duration have shifted.

“Three years ago, one-hour batteries typically delivered the strongest business case for commercial sites, based on payback and upfront cost,” he says.

“Today, two-hour batteries are delivering better overall economics, and based on current trends, RACV expects four-hour batteries to become commercially compelling within the next two to four years.”

He says this reflects both falling costs and “the growing importance of longer duration services in the market.”

Morrissy adds that tor manufacturers, participating in energy markets presents a new revenue opportunity.

“Many businesses manage risk by contracting their energy under fixed price arrangements,” he says.

“By joining RACV’s Virtual Power Plant, batteries can earn additional revenue by providing grid services, such as Frequency Control Ancillary Services (FCAS), as well as participating in wholesale energy arbitrage,” he says.

“This allows businesses to unlock value that simply isn’t accessible through a standalone, behind the meter approach.”

But Morrissy cautions against viewing storage as a standalone investment instead of a broader energy strategy, adding that considering future electrification, EV charging, staged rollouts or additional capacity early on can “prevent unnecessary infrastructure upgrades later.”

Technology choices also matter.

“As systems become more integrated and digitised, the wrong hardware or control architecture can limit interoperability and prevent businesses from maximising returns,” he says.

“We’ve seen cases where poor upfront decisions have materially constrained asset performance.”

Integration between solar, storage, demand management and efficiency upgrades is another area requiring careful planning, Morrissy says.

“Different suppliers use different control systems, communication protocols, and architectures,” he says.

“Selecting compatible hardware — and planning how new assets will integrate with existing solar, demand management systems, and efficiency upgrades — has a significant impact on what the overall system can achieve. When designed correctly, these assets work together as a single, coordinated energy system rather than a collection of standalone components.”

The regulatory environment has become more supportive, but complexities remain, he adds.

“Manufacturers need to manage distribution network connection approvals, fire safety requirements, building codes, and compliance obligations, all of which vary by jurisdiction and network service provider. While these processes are manageable, they do add time and complexity to projects.”

Looking ahead, Morrissy identifies two changes that would speed up adoption.

“First, hardware procurement lead times can still exceed six months. As the market matures, RACV would like to see suppliers holding more local stock to reduce deployment timelines,” he says.

“Second, distribution networks operate under different connection rules and approval processes. Greater consistency and clearer timelines across networks would materially improve project certainty and speed to market.”

For manufacturers planning the next decade, he sees energy management becoming increasingly integrated and digital.

“Best practice will involve highly-integrated, digitally managed energy systems. Manufacturers will combine on‑site generation, battery storage, flexible loads, and market participation to actively manage cost, risk, and resilience,” he says.

His core advice for those considering storage today is to think ahead. “The Australian energy market is one of the most volatile in the world, and having a reliable, controllable energy system is increasingly critical to business operations.”

With solar and batteries working together, he says businesses can secure long‑term certainty.

“As operations electrify further, it’s essential to think long term and design futureproofed solutions,” he says.

“A battery paired with solar provides long term energy certainty and acts as a natural hedge against grid volatility — supporting both operational resilience and commercial performance.”