Image: Artist impression of Australia’s first CO2 battery planned for Victoria. Source: Energy Dome
Australia added a record amount of battery storage capacity in recent years, with the Australian Energy Market Operator forecasting that the National Electricity Market will require tens of gigawatts of dispatchable storage by 2050 as coal-fired power stations retire. At the same time, renewable generation continues to grow rapidly, creating an increasing need for technologies capable of storing electricity for longer periods.
One emerging solution is the CO2 battery Australia is now preparing to deploy for the first time. Planned for Victoria’s Latrobe Valley, the project will use compressed carbon dioxide to store renewable energy for up to 12 hours, providing another option for firming solar and wind generation.
Developed by the State Electricity Commission and Energy Dome, the Australian-first project could demonstrate how long-duration energy storage technologies may complement lithium-ion batteries and help maintain grid reliability as the nation accelerates its clean energy transition.
Quick summary
- Australia’s first commercial CO2 battery is planned for Victoria’s Latrobe Valley.
- The project could provide between 10 and 12 hours of renewable energy storage.
- CO2 batteries may complement lithium-ion batteries by delivering longer-duration storage.
What is a CO2 battery?
A CO2 battery stores electricity using compressed carbon dioxide in a closed-loop system.
When excess renewable electricity is available, carbon dioxide gas is compressed and converted into a liquid. The heat generated during this process is also captured and stored.
When electricity is needed, the liquid CO2 is reheated and expanded through a turbine, generating electricity before returning to its gaseous state.
Unlike conventional batteries, the technology relies on industrial equipment such as compressors, turbines, and heat exchangers rather than lithium battery cells.
Expert tip
Long-duration storage technologies are designed to complement, rather than replace, lithium-ion batteries. Different storage technologies will likely perform different roles within Australia’s future electricity system.
Where will the battery be built?
The project will be developed at SEC Energy Works in Hazelwood North, within Victoria’s Latrobe Valley.
Historically known for coal-fired electricity generation, the Latrobe Valley is increasingly becoming a centre for renewable energy investment and energy transition projects. According to the Victorian Government, the project is expected to support approximately 66 jobs while helping diversify the region’s energy industry.
Victorian Minister for the State Electricity Commission Lily D’Ambrosio said:
“This Australian-first battery will help lower power prices and increase grid reliability for households and industry.”
The project will become the first development within the new 143-hectare SEC Energy Works precinct.
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Why does Australia need long-duration energy storage?
Battery storage plays a critical role in balancing renewable electricity generation and consumer demand.
Solar generation falls to zero overnight, while wind generation can vary significantly depending on weather conditions. Short-duration lithium batteries perform exceptionally well at managing evening demand peaks and providing grid stability services. However, Australia’s energy transition increasingly requires technologies capable of storing electricity for much longer periods.
According to AEMO’s Integrated System Plan, long-duration storage will become increasingly important as coal-fired generation retires.
CO2 batteries could potentially provide renewable firming during:
- Extended cloudy periods
- Overnight demand peaks
- Low wind events
- Network disruptions and extreme weather events
Expert tip
Long-duration storage is often considered the “missing piece” of the renewable energy puzzle, allowing excess daytime solar generation to be shifted across longer periods.
How much energy could the project store?
SEC has announced that the project will have an output capacity of 20 MW and provide electricity continuously for between 10 and 12 hours.
This suggests an estimated storage capacity of approximately 200 to 240 MWh.
While SEC has not yet confirmed the final energy capacity, this would place the project firmly within the long-duration storage category. For comparison, many of Australia’s existing grid batteries currently provide between two and four hours of storage.
Energy Dome claims its technology can achieve round-trip efficiencies above 70 per cent and operate for decades with minimal degradation.
Expert tip
Storage duration is becoming just as important as storage capacity. A battery capable of operating for 12 hours can perform a very different role to a battery designed for only two hours of discharge.
How does a CO2 battery compare with lithium batteries?
The technologies have different strengths.
| Feature | CO2 battery | Lithium-ion battery |
| Storage duration | 8 to 24 hours | 1 to 4 hours typical |
| Critical minerals | Minimal reliance | Significant reliance |
| Response speed | Fast | Very fast |
| Commercial maturity | Emerging | Highly mature |
| Degradation | Low expected degradation | Gradual degradation over time |
CO2 batteries are unlikely to replace lithium batteries entirely.
Instead, Australia’s future electricity system will likely use multiple storage technologies, including pumped hydro, lithium batteries, thermal storage, hydrogen, and compressed CO2 systems.
Frequently asked questions
What is a CO2 battery?
A CO2 battery is a long-duration energy storage system that uses compressed carbon dioxide in a closed-loop process to store and generate electricity. It does not burn carbon dioxide and does not continuously release emissions during operation.
Where is Australia’s first CO2 battery being built?
Australia’s first commercial CO2 battery is planned for Hazelwood North in Victoria’s Latrobe Valley as part of the SEC Energy Works innovation precinct.
How long can a CO2 battery provide electricity?
The Victorian project is expected to deliver electricity continuously for between 10 and 12 hours, significantly longer than many existing lithium-ion batteries.
Are CO2 batteries better than lithium batteries?
Neither technology is necessarily better. They are designed for different purposes. Lithium batteries excel at short-duration applications, while CO2 batteries may be better suited for long-duration storage.
Why is long-duration storage important?
Long-duration storage helps maintain electricity reliability during periods of low renewable generation and supports Australia’s transition away from coal-fired power stations.
Key takeaways
- Australia’s first commercial CO2 battery is planned for Victoria’s Latrobe Valley.
- The project could provide between 10 and 12 hours of renewable energy storage.
- CO2 batteries use compressed carbon dioxide in a closed-loop process.
- Long-duration storage is becoming increasingly important as coal generation retires.
- Successful deployment could pave the way for additional projects across Australia.
Sources
- Australian Energy Market Operator (AEMO) Integrated System Plan
- Victorian Government media release on SEC and Energy Dome project
- State Electricity Commission project announcement
- Energy Dome technical documentation
