Arcadis has become a key advisor for the adoption of grid-scale and behind-the-meter battery energy storage systems in Australia.
Doors continue to open for Australia’s renewable energy industry, underpinned by a policy environment prioritising the decarbonisation of industries and civilisation as we know it.
The Federal Government is focused on accelerating the renewables roll out, underpinned by attractive subsidies and the loosening of governmental red tape. Pro-renewables reform of national environmental law, the EPBC Act, in November and a $4.9 billion expansion of the Cheaper Home Batteries program in December show where Australia’s priorities lie.
But for this revolutionary movement to see tangible success, the energy industry and government must work in lockstep with stakeholders and communities to ensure all interests are being catered for during the roll out.
Technology selection is equally critical, with storage systems just as important as generation infrastructure in realising a sustainable future.
This is where consulting companies such as Arcadis – with 36,000 employees worldwide – play a critical role.
As Muhammad Ali, Arcadis’ national discipline lead for energy advisory, explained, the Australian renewable energy industry should be approaching storage based on the duration demands at play.
“Australia’s grid is shifting from coal to variable wind and solar, so we need multiple storage durations,” he told Energy.
“Short-duration batteries (typically up to four hours) are often optimised for grid stability and FCAS (frequency control ancillary services) demands. We have medium duration – four to 12 hours – which covers evening peaks and multi-hour lulls, and then long duration – 12-plus hours to days – which covers extended low-renewable periods and improves resilience.
“While batteries are important for short and medium durations, the longer the storage duration required, the more important pumped hydro becomes as a solution.”
Ali pointed to the Australian Energy Market Operator’s (AEMO) guidance that, in order to maintain system reliability once coal retires, the grid will require a mix of storage and firming capacity such as gas.
The electricity landscape
Released in December, AEMO’s 2025 Transition Plan for System Security (TPSS) report highlighted that if key technologies aren’t operational ahead of the retirement of the Yallourn and Eraring coal-fired plants in 2028 and 2029, respectively, AEMO may have to intervene in the market more frequently to maintain system reliability.
These interventions, while designed to avoid supply disruptions, could occur at significant cost to consumers and underscore the importance of timely delivery of firming, storage, and system strength solutions.
Synchronous condensers, which mimic the grid-stabilising role of coal generators, are the key technology in discussion, with clutch-fitted gas turbines and grid-forming BESS also critical.
Ali said the energy industry was facing several challenges to deliver adequate storage infrastructure. This includes connection and network constraints such as queue times, system strength requirements, marginal loss factors, and congestion risk.
Planning approvals, social licence to operate and environmental constraints (particularly for long-duration storage) are other headwinds, along with supply chain and delivery risks such as long lead times and commissioning complexity.
Storage systems are also changing the revenue profile of the energy market.
FCAS demands typically call for short-duration batteries, while the arbitrage market, which sees electricity purchased when prices are low and sold when prices are high, require medium- and long-duration batteries.
“We’ve seen 2023, 2024 and 2025 be very different in how battery revenue is generated,” Ali said. “FCAS revenue was high in 2023–24 because battery uptake was low. In 2025, we are seeing FCAS prices decline very quickly as battery uptake increases.”
Ali said the flood of BESS is causing a “supply and demand” shift, with less of a need for the short-term FCAS function, which rapidly corrects frequency deviations to keep the grid stable at around 50Hz, and a greater ability to strategically plan revenue generation through arbitrage methods.
This is because longer-duration batteries can be relied upon to discharge electricity throughout higher demand periods, creating a more predictable revenue cycle.
While longer-duration batteries can support more sustained dispatch across peak periods, revenue predictability ultimately depends on market conditions, contracting structures, and access to capacity or firming mechanisms.
How a BESS comes to life
There are many variables at play when it comes to designing and installing BESS, meaning operators must be able to turn to a trusted partner to ensure the optimised planning and roll-out of these systems.
This is where Arcadis comes to the fore.
“Arcadis supports battery developers in technical and commercial advisory and due diligence, project management, commissioning and development,” Ali said.
“Arcadis also works extensively with lenders and investors, providing lender-grade technical due diligence and bankability assessments to support financing decisions for storage projects.
“We map out a path for the developer to safely get their BESS up and running.”
Ali said Arcadis has specialist teams dedicated to each phase of the project development process. This extends from Ali’s role in initial strategy and investment, to electrical and environmental teams which deliver required studies such as the EIS (Environmental Impact Statement) and GPS (Generator Performance Standards) studies, and project, cost and commercial management teams who oversee program controls and commercial oversight to optimise budgets, manage risk and change, and drive delivery certainty.
Once operations are underway, Arcadis also provides optimisation services to ensure the BESS is performing as desired.
Ali said there are many considerations Arcadis discusses with its clients during the initial scoping phase.
“Operators must be mindful of Australia’s regulatory and planning environment – what studies are required for connecting a battery into the grid, including EIS, and the supply chain requirements,” he said.
“They must also understand the development and delivery timeline required for a BESS, which is typically not 1–2 years, but more like 4–5 years for utility-scale projects with complex grid connections.”
There must also be recognition of the rapidly evolving nature of today’s energy market, with two-hour storage solutions now being outpaced by medium- and long-duration solutions.
“A project might have made a financial investment decision in 2024 or 2025 for two hours of storage and then realise that the market is moving further towards arbitrage and longer durations,” Ali said.
“So operators must factor in the high volatility of the market from a battery application and revenue stack perspective.”
Ali said operators must also intimately understand the technology factors such as warranty terms, degradation assumptions and product availability, along with safety attributes such as fire detection and suppression, separation distances of the battery units, and emergency response planning.
A trusted consultant
Arcadis is supporting multiple utility-scale and behind-the-meter (BTM) BESS projects across the National Electricity Market, ranging from smaller BTM systems to grid-scale projects in the hundreds of megawatts.
“Here, we are providing owner’s engineering, grid connection support, technical due diligence, and delivery and commissioning assurance for multiple NSW, Victorian and Queensland utility-scale BESS projects, along with confidential preparatory discussions with a range of other early-stage projects,” Ali said.
When asked what battery adoption could look like in 2030, Ali said he expects to see BESS become the dominant firming infrastructure on the market, particularly 2–8-hour systems.
“I also see more hybrid projects (wind/solar and storage) to improve dispatchability and contracting, along with growing BTM and VPP (virtual power plant) participation and greater policy and investment support through initiatives such as the Capacity Investment Scheme,” he said.
“Storage is no longer ‘optional firming’ – it’s becoming the operating backbone of a renewables-led grid. The winners will be the projects that combine strong grid engineering, bankable delivery, and smart commercial optimisation from day one.”
This feature appeared in the March edition of Energy.
