21 October 2026
4 min read
#Renewable Energy, #Mergers and Acquisitions
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• Battery energy storage systems (BESS) have become the most sought-after renewable energy asset class, with investors favouring construction-ready storage projects.
• Execution certainty is driven by value, with grid connections, planning approvals and contracted offtake attracting premium pricing.
• The transition to the GO scheme is creating new due diligence and transaction structuring considerations, particularly for operating assets and legacy Power Purchase Agreements.
Australia’s renewable energy sector remains one of the most active M&A markets globally, and that momentum has continued into 2026. The scale, diversity, and geographic breadth of transactions we see across solar, wind, battery storage and development platforms continue to reinforce Australia’s position as a core destination for clean energy investment.
Investor appetite for storage assets has grown significantly, and BESS now sits at the centre of many acquisition strategies. Infrastructure capital has moved decisively towards execution-ready storage assets, with a clear preference for late stage or construction-phase projects that carry contracted offtake and reduced delivery risk.
Across the market, buyers are favouring de-risked assets with stable cash-flow visibility over speculative development pipelines, and sellers that have successfully completed key development and construction milestones are finding a ready pool of institutional acquirers.
From our perspective, a two-sided dynamic is emerging around BESS. On the sell side, developers are bringing developed or near-development assets to market, often once they have been sufficiently de-risked to attract institutional buyers. On the asset management side, those same developers and operating asset owners are adding BESS to their existing projects to improve the commercial performance by mitigating curtailment risk while enhancing their attractiveness to future acquirers. As a result, BESS is increasingly seen as a value-add that strengthens the case for a renewable project rather than a standalone investment.
The strategic rationale is reinforced by a growing grid constraint problem. The Australian Energy Market Operator (AEMO) has warned that major solar farms in south-east Australia may be forced to curtail more than a third of their output by 2027 due to transmission delays. BESS provides a commercial hedge against this risk by storing excess generation and dispatching it during periods of peak demand or network constraint. For investors, co-locating or acquiring adjacent storage capacity is increasingly embedded in the acquisition thesis for operating renewable assets.
Grid connection timing, EPC pricing, planning approvals and the growing complexity of competing land use rights, including conflicts with mining and pastoral tenures, are also adding material execution risk to portfolios that appear attractive on paper. In this environment, sellers with credible projects, secured grid connections and contracted offtake continue to command premium pricing.
Australia’s renewable energy certification system is also undergoing fundamental change. The transition from the Large-scale Generation Certificates (LGC) regime to the Guarantee of Origin (GO) scheme is adding a further layer of complexity for renewable energy transactions. Both regimes will operate in parallel until 31 December 2030, although only one certificate – either an LGC or a Renewable Electricity Guarantee of Origin (REGO) certificate – can be created for each unit of energy.
For investors acquiring operating renewable assets or portfolios with legacy Power Purchase Agreements drafted around LGC mechanics, this is a material due diligence and contract renegotiation issue. The certificate revenue assumptions embedded in acquisition models will need to be carefully stress-tested against the REGO framework, which operates under different commercial and market dynamics.
Misalignment between contractual obligations and scheme requirements can expose buyers to revenue risk and, in some cases, greenwashing scrutiny.
We expect deal flow in this sector to remain strong in 2027, driven by Australia’s target of 82% renewable electricity by 2030, the Capacity Investment Scheme and AEMO’s estimated AU$142 billion investment pipeline.
BESS will continue to attract the strongest institutional interest, while development assets with secured grid connections and a clear path to financial close are expected to remain in demand. However, investors will continue to be selective. Curtailment risk, wholesale pricing dynamics and contractual uncertainty around the LGC-to-REGO transition will influence risk allocation and pricing in transactions, as will evolving FIRB conditions on foreign-owned energy infrastructure.
If you have any questions regarding these insights, please contact us here.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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