Short version: the Australian energy market is a mess and was being gamed by a small (2 or 3) number of operators of gas peaking plants who were driving the spot price up to several orders of magnitude higher than normal wholesale prices. The battery by simply existing cut the ability of these operators to game the market as heavily, because they could only bid up to the floor price the state government had set for the battery to bid in at.

This is direct state interference in a competitive market so the “floor” is still quite high. With more private operators entering the market the ability to game the system will be eroded further since everyone wants to get the easy money.

The savings were mostly due to cutting the fat out of the market gouging practices. No/little change to actual supply occurred.