The difference between grid forming vs grid following comes down to who sets the voltage. A grid-following inverter measures the network's voltage and injects current in step with it, while a grid-forming inverter sets its own voltage and frequency and lets current flow from that. As synchronous generators retire from the NEM, that difference decides whether inverter-based plant leans on the grid or helps hold it up.
For a developer or asset owner, the choice is not just a tick box on an inverter datasheet. It changes the inverter rating, the battery's energy budget, the protection design, the study scope and what the generator performance standards (GPS) can offer.
How Each Works
A grid-following inverter uses a phase-locked loop (PLL) to track the angle of the grid voltage, then controls its output current against that reference. It behaves like a controlled current source. It needs a reasonably stiff voltage to lock onto, and in a weak network the PLL and current controllers can interact with the grid and become unstable.
A grid-forming inverter behaves like a voltage source behind an impedance, much as a synchronous machine does. It holds its own internal voltage magnitude and angle, and power flows according to the angle difference with the grid. Common control schemes include droop control and the virtual synchronous machine (VSM), which mimics the swing equation of a rotating generator. Because it does not wait to measure a disturbance before responding, it reacts within the first cycle.
| Characteristic | Grid-following (GFL) | Grid-forming (GFM) |
|---|---|---|
| Reference | Tracks grid voltage angle with a PLL | Sets its own internal voltage and frequency |
| Behaves like | Controlled current source | Voltage source behind an impedance |
| Response to a disturbance | Measures, then reacts through its control loops, typically over tens of milliseconds or more | Responds immediately, as current flows from its internal voltage |
| Fault current | Limited to around rated current, injected as programmed reactive current | Also limited by semiconductor rating, but supplied naturally and faster; some designs allow a short overload |
| Inertia-like response | None unless a fast frequency response function is added | Inherent, set by control parameters such as virtual inertia and droop |
| Weak-grid operation | Stability degrades at low short-circuit ratio | Can operate at very low short-circuit ratio, and in islanded mode |
| Model type | RMS and EMT models are well established | EMT models essential; RMS representations still maturing |
A grid-forming inverter is still an inverter. Its semiconductors cannot deliver the several times rated current a synchronous machine supplies during a close-in fault. What changes is the speed and character of the response.
What Changes in the Design
Inverter rating headroom
A grid-forming inverter responds to disturbances by itself, so it needs current capacity in reserve to do it. If the inverter is already running at full current when a phase-angle jump or frequency event arrives, it hits its current limit and drops into a limited mode that behaves much less like a voltage source.
In practice, that means rating the inverter fleet above the plant's contracted export, or capping normal operation below full rating. How much headroom is needed depends on the services the plant must provide and the OEM's current-limiting strategy. Settle it at concept design, because it drives inverter count, the collection system and transformer rating.
BESS energy reserve
An inertia-like response draws real power. A grid-forming battery has to hold enough state-of-charge headroom, both up and down, to deliver that response at any time it is expected to. That reserve sits alongside FCAS commitments and energy arbitrage, so the operating strategy and revenue model need to account for it. A grid-forming function on a battery that regularly runs to 0% or 100% state of charge is limited exactly when it might be called on.
Protection
Low fault current is the long-standing protection problem with inverter-based plant, and grid-forming control only partly eases it. Points to check:
- Negative-sequence current. Many network protection schemes rely on negative-sequence quantities for unbalanced faults. Grid-following inverters often suppress it. Grid-forming inverters may supply some, depending on the OEM's control design, but the behaviour must be confirmed, not assumed.
- Fault level for protection grading. Settings in the plant and at the connection point need to work with the real fault contribution, which is still close to rated current.
- Islanding detection. A grid-forming plant can hold up an island, which is useful for black start but a hazard if anti-islanding protection does not detect it.
Plant controller
The power plant controller (PPC) sets slower active power, reactive power and voltage targets. With grid-forming inverters, the fast response comes from the inverters themselves, and the PPC must not fight it. The PPC and inverter control parameters need to be tuned together and tested as a pair, both in models and at commissioning.
What Changes in the Studies
Grid-forming plant puts more weight on EMT studies. RMS (positive-sequence) models in PSS/E are still needed for the wider network and for AEMO's model submissions, but the fast behaviour that makes grid-forming valuable happens on timescales RMS tools simplify heavily. The work that typically grows:
- EMT studies in PSCAD. These cover current limiting, phase-angle jumps, unbalanced faults and recovery, using the OEM's validated EMT model.
- Weak-grid stability. This checks behaviour across the full credible range of short-circuit ratio, including minimum fault level and planned outages. Grid-forming plant should handle low SCR well, but it still has to be shown.
- Interaction studies. Several grid-forming and grid-following plants close together can interact through their controls, and sub-synchronous oscillations have been seen in weak parts of the NEM. Nearby plant has to be in the model, not just the project.
Grid-forming firmware is developing quickly, so the OEM model used in the studies must match the firmware version actually installed. Our guide to PSS/E and PSCAD modelling for renewables in Australia covers what those model packages must contain, and our explainer on steady-state vs dynamic studies sets out where each type fits.
What Changes in the GPS
The access standards in Schedule 5.2 of the National Electricity Rules do not set a separate class for grid-forming plant. The plant still negotiates the same performance standards as any other generating system. What changes is how readily it can meet them and what it can be held to.
Areas where grid-forming capability tends to help:
- Disturbance ride-through and reactive current. A fast, voltage-source response can make it easier to ride through faults and recover cleanly, particularly at weak connection points.
- Frequency response. An inherent inertia-like response adds to the plant's frequency control capability, provided the energy and current headroom are there.
- Stability at low short-circuit ratio. This supports the system strength assessment, and can reduce what the plant draws from the network.
What grid-forming capability does not do is prove itself. AEMO and the NSP will want to see the claimed behaviour in validated models, and later in commissioning and hold point tests. A GPS that commits to a grid-forming response becomes an obligation the plant must meet for its whole life, so the commitment should only be as strong as the evidence behind it. AEMO has also published a voluntary specification for grid-forming inverters, which is a useful reference when writing the technical specification for the inverter supply.
For the wider GPS process, see our guide to AEMO generator performance standards.
The 2026 Evidence: Two Positions, Both Worth Reading
The question that matters most commercially is whether a grid-forming battery can substitute for synchronous plant in providing system strength. In 2026, the answer depends on which part of system strength you mean.
AEMO's caution
In its 2026 General Power System Risk Review, AEMO said grid-forming batteries have not yet been confirmed as able to deliver the fault current needed for minimum system strength, the level that underpins protection operation. AEMO has launched a fault-current trial to build that evidence. Results are not yet published, and the position may change once they are.
Transgrid's plan
Transgrid's July 2025 plan for New South Wales, set out in the Project Assessment Conclusions Report for its regulatory investment test, proposed ten synchronous condensers, about 5 GW of grid-forming batteries and 650 MW of existing generators running in condenser mode. Its July 2026 update, released for consultation, cut the synchronous condensers needed in later stages of the program from ten to eight, with the Phase 1 units proceeding as planned, and opened a pathway for grid-forming batteries to form part of the minimum-level portfolio. It treats grid-forming batteries as part of the solution, alongside synchronous machines rather than in place of them.
Reading them together
The two positions are not really in conflict. Grid-forming batteries are seen as useful for stability and the efficient level of system strength. Their contribution to minimum fault level, the protection-grade current that synchronous machines provide in quantity, is the part still being proven. For a project counting on a grid-forming battery to self-remediate system strength or to support a GPS case, the practical rule is to claim only what can be shown in EMT studies, and expect the NSP and AEMO to test it.
For battery projects at an earlier stage, our guide to BESS project development in Australia covers where these decisions sit in the overall program.
Model Your Grid-Forming Plant Before You Commit
The grid-forming decision affects inverter selection, rating headroom, battery operating strategy, protection and the GPS. It is cheapest to get right at concept stage, before the inverter supply contract is signed and the connection application is lodged.
ElectraGlobe's power systems team builds and runs PSS/E and PSCAD models for solar, wind and BESS connections across the NEM, including weak-grid, interaction and system strength studies. We can test what a grid-forming configuration will do at your connection point and what it can credibly commit to in the GPS. See our steady-state and dynamic studies service, or contact us to discuss your project.
Frequently Asked Questions
Can grid-forming batteries replace synchronous condensers?
Not on the current evidence, at least not fully. Grid-forming batteries can provide fast voltage and frequency support and help stability in weak networks, but their fault current is limited by their semiconductors to around rated current. AEMO has said their ability to supply minimum system strength is not yet confirmed and is running a trial. TNSP plans such as Transgrid's use both technologies together: its July 2026 update cut the synchronous condensers needed in later stages from ten to eight and gave grid-forming batteries a larger role, while its Phase 1 condensers proceed as planned.
Do grid-forming inverters cost more?
Usually somewhat, though the premium varies by OEM and is falling as grid-forming becomes a standard offering. The larger cost often comes from the system around the inverter: extra current headroom, energy reserved in the battery, and a heavier EMT study scope. Those costs should be weighed against any reduction in system strength charges or remediation, and any extra services the plant can provide.
Can an existing battery be converted to grid-forming?
Sometimes. Some inverter platforms support grid-forming control through a firmware upgrade, but the hardware must have the current headroom, and the change usually means new models, new studies and an amended GPS with AEMO. Treat it as a project in its own right, and confirm with the OEM what the hardware can actually sustain.
Does AEMO require grid-forming for new batteries?
As of late 2026, there is no general requirement under the access standards for new batteries to be grid-forming. AEMO has published a voluntary specification, and grid-forming capability is increasingly attractive for system strength and for weak connection points. Requirements are under active review, so check the current position with AEMO and the NSP at the start of each project.