Tesla has announced that by the end of 2026, it expects to have around 4.5GW of grid-forming battery storage operating across Australia. Josef Tadich, regional director of Tesla Energy, APAC, made this claim on LinkedIn, stating that this figure is expected to “double again” in the future as grid-forming battery energy storage systems (BESS) become a staple of the Australian energy system.

The 4.5GW grid-forming battery storage figure applies to both the National Electricity Market (NEM), which spans Australia's eastern and southern states, and the South West Interconnected System (SWIS), which spans much of south-west Western Australia, including Perth.

Tesla's Current Australian Portfolio

Tesla confirmed that it has over 4.5GW/12GWh of grid-forming BESS in the pipeline across Australia, with projects in various stages of development. The company's Australian portfolio of operating projects includes 17 grid-forming projects. Notable installations include Hornsdale Power Reserve (Neoen) at 150MW/194 MWh in South Australia, Victoria Big Battery (HMC Capital) at 300MW/450 MWh in Victoria, Melbourne Renewable Energy Hub (Equis) at 600MW/1,600 MWh in Victoria, and the Orana BESS (Akaysha Energy) at 415MW/1,660 MWh in New South Wales.

Shane Bannister, Tesla's head of business development and sales for Megapack APAC, made remarks during the Clean Energy Council's Australian Clean Energy Summit 2025, stating that he does not believe Tesla will “sell another battery in Australia that's not grid-forming.”

Technical Capabilities and Cost Analysis

Tesla has released two white papers titled “Grid-Forming: The Path to a Stable and Sustainable Future” and “The Role of Grid-Forming Inverters in Providing Inertia,” which detail how grid-forming inverters can provide synthetic inertia to stabilise Australia's NEM as the grid transitions to higher renewable energy penetration. The documents present evidence that grid-forming batteries can deliver reliable inertial responses comparable to those of traditional synchronous generators, while offering greater flexibility and reliability at lower costs.

Tesla challenges the notion that synchronous condensers are superior to grid-forming batteries through cost comparisons cited from the Australian Energy Market Commission (AEMC). New synchronous condensers for inertia have fixed costs of approximately AUD 7,000/MWh/year, with variable costs ranging from AUD 0.20 to AUD 0.50/MWh/hour. In contrast, new grid-forming BESS have significantly lower fixed costs ranging from AUD 0 to AUD 806/MWh/year and variable costs averaging just AUD 0.02/MWh/hour.

The white papers explain that grid-forming inverters deliver synthetic inertia through sophisticated control algorithms. Unlike traditional synchronous generators that provide inertia through rotating mass, grid-forming batteries deliver a controllable, instantaneous active power response that helps limit frequency nadir, the lowest point that the grid's frequency reaches after a disturbance.

Reliability and Performance Advantages

Tesla emphasizes the superior reliability of grid-forming systems compared to synchronous condensers. A case study from AEMO's Operating Incident Report reveals that the Buronga synchronous condensers experienced 20 trip events between November 2020 and March 2022. Specifically, Buronga No. 1 SC tripped seven times, No. 2 SC tripped 13 times, and No. 3 SC tripped five times during this period, with root causes related to protection-control system maloperation and failures.

In contrast, Tesla states that grid-forming batteries feature a modular architecture, allowing continued operation even when individual units fail, remote diagnostics capabilities that reduce downtime, and average availability rates exceeding 99%. Grid-forming BESS are capable of facilitating blackstart operations through a three-stage process. First, the battery storage system initiates power flow to establish a stable voltage and frequency reference.

Next, renewable energy generation sources like solar and wind are brought online as the battery maintains grid stability. Finally, the system achieves complete energization with full power flow established across the network, including industrial facilities and other load centers.

Industry Recognition and Policy Recommendations

The Australian Energy Market Operator (AEMO) has recognized that “the inertial response provided by the 150MW/194 MWh Hornsdale Power Reserve grid-forming BESS is comparable to a typical inertial response provided by a synchronous machine during a frequency event.” Tesla cites ERCOT, EirGrid, National Grid ESO, and Hawaiian Electric as system operators that have acknowledged the technology's capabilities in providing system stability, synthetic inertia, and blackstart functionality.

Tesla's white papers conclude with several policy recommendations aimed at accelerating the adoption of grid-forming technology in Australia. The company calls for streamlining connection processes for grid-forming batteries under the National Electricity Rules and designing mandatory specifications for inertia provision embedded in the NER. Tesla specifically recommends reviewing Clause 5.3.4A(b1) of the National Electricity Rules, stating that current requirements for proponents to aim for the Automatic Access Standard create “a major barrier” to grid-forming battery storage adoption.

Additional recommendations include accelerating inertia procurement mechanisms through a real-time inertia market, incentivizing retrofitting of suitable grid-following batteries, improving transparency on inertia requirements, and fostering education and collaboration among stakeholders. UK-headquartered energy industry data platform Modo Energy has stated that the cost to build a grid-forming BESS is now virtually identical to that of traditional grid-following systems.

While grid-forming systems in the NEM do require additional testing for grid connection, Modo said this only adds marginal expenses to the commissioning process. Converting an existing grid-following battery to grid-forming capability can cost up to 21 times more than implementing grid-forming capability from the beginning, although the absolute cost remains relatively modest, at approximately AUD 12,000 per megawatt for a 250MW asset.

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