As Australia’s grid steadily decarbonises and synchronous generators retire, maintaining voltage stability and inertia has become one of the most pressing technical challenges of the energy transition. The traditional “free” provision of these stabilising services by coal and gas plants is disappearing, forcing grid operators and transmission network service providers (TNSPs) to deploy new tools and rethink operational paradigms. Australia’s experiments may soon serve as templates for other grids worldwide.
In a synchronous grid, large rotating machines provide two stabilising services:
As inverter-based resources (IBRs) such as wind, solar, and batteries replace synchronous plants, these built-in stabilisers vanish. Without intervention, low system strength can trigger voltage collapse or cascading failures.
TNSPs, the Australian Energy Market Operator (AEMO) and regulators are therefore developing frameworks to replicate the stabilising role of the synchronous fleet.
A pivotal reform, the Improving Security Frameworks for the Energy Transition rule change, introduces new obligations for system strength procurement under the National Electricity Rules. TNSPs acting as System Strength Service Providers must now ensure both minimum fault levels and efficient levels of strength to host IBRs.
AEMO’s Transition Plan for System Security details how it will manage voltage and inertia through this shift.
AEMO told Energy Insights its next update, due December 2025, will outline new operational planning methods and the role of grid-forming batteries in supporting future system strength. Its 2024 plan introduced Transitional Services contracts to procure stability services - such as inertia and fast frequency control - not yet traded through markets.
In parallel, AEMO is now required to publish an annual Transition Plan for System Security, which lays out how it expects to manage voltage, inertia, and related services through the energy transition.
Meanwhile, the Australian Energy Market Commission (AEMC) in October 2025 rejected a new real-time spot market for inertia, reasoning that costs would outweigh benefits.
“This is a prudent decision that protects consumers from unnecessary costs. Our analysis shows that under current conditions, the estimated $5-$10 million in upfront costs, plus millions more in ongoing operation, would far outweigh the modest expected benefits,” AEMC Chair Anna Collyer said.
“This is fundamentally about getting the timing right. We have found that the necessary inertia supply is already being secured through work being done to ensure system strength.”
Given this evolving policy framework, TNSPs are developing hybrid portfolios of stability resources - combining synchronous condensers, grid-forming batteries, modified thermal units, and advanced control systems.
Transgrid’s recent Project Assessment Conclusions Report (PACR) outlines a preferred portfolio for New South Wales: ten synchronous condensers, 5 GW of grid-forming batteries (providing system strength equivalent to ~17 condensers), and 650 MW of synchronous generation converted to condenser mode.
Grid-forming batteries will “provide almost half of NSW’s system strength requirements, with synchronous condensers providing the other half,” Transgrid Acting Executive General Manager of Network Jason Krstanoski said.
“Together, these solutions are expected to deliver $8.8 billion in net market benefits… additional net market benefits of $1.2 billion could be delivered if Transgrid accelerates deployment of synchronous condensers, so we are currently investigating options to fast-track the project.”
In Queensland, Powerlink has adopted a post-coal portfolio strategy. Its 2025 Regulatory Investment Test for Transmission plans a staged deployment of up to nine synchronous condensers across Central Queensland, alongside contracted synchronous and battery solutions. The utility is also investigating grid-forming batteries, pumped hydro, and gas turbines, and even converting existing plants like the Townsville Power Station to operate as a synchronous condenser. “Re-opening triggers” allow a pivot if new technologies prove more efficient or cost-effective.
“Powerlink is delivering a range of initiatives to proactively respond to emerging regional inertia shortfalls and system strength challenges associated with the eventual retirement of synchronous coal-fired generation,” Stewart Bell, Powerlink’s Executive General Manager, Operations and Planning, told Energy Insights.
Across the National Electricity Market, grid-forming inverter advances are accelerating. AEMO’s engineering roadmap has made their deployment a central priority, providing guidance on synthetic inertia. Many regions are already evaluating voltage and frequency contributions from aggregated consumer energy resources (CER) and distributed energy resources.
Hardware alone will not secure the grid; success depends on precise operations and adaptive planning. Synchronous condensers must be strategically located to maximise effectiveness, and TNSPs are increasingly co-optimising system strength and inertia investments. Real-time modelling tools help detect emerging low-inertia risks, while inverter controls must ensure rapid fault ride-through and voltage recovery. Batteries typically reserve a share of capacity for synthetic inertia rather than energy trading, balancing revenue with security obligations.
Yet planning uncertainty persists - around coal closure timing, inverter performance and technology costs - requiring flexible investment frameworks.
As the grid transforms, the window for securing stability is narrow. Delays in commissioning synchronous condensers or large batteries could create temporary vulnerability as coal plants retire. Cost inflation or supply constraints may also force portfolio re-runs. Confidence in grid-forming performance under real disturbances remains essential, as does regulatory and jurisdictional coordination.
The pathway Australia is forging - combining synchronous machines, grid‐forming inverters, contractual services and dynamic operations - is emerging as one of the more advanced blueprints globally. The lessons here will be watched closely by grids in Europe, the United States, and Asia as they wrestle with their own synchronous decline.