A new AEMO report says SA’s giant lithium battery outperformed coal and gas generators on key measures last summer.

The Hornsdale Power Reserve - which features the world's biggest lithium-ion battery - was built in the wake of blackouts across South Australia in 2016.

The Australian Energy Market Operator (AEMO) says the speed, precision and agility of the battery is unprecedented when it comes to dealing with both major power system disturbances and day-to-day variations.

Its abilities were on show on December 18, when a coal generator in New South Wales tripped and other markets were called on to fill the gap.

The battery responded to the sudden loss of 689 megawatts of generation within a fraction of a second.

The Hornsdale Power Reserve provides Frequency Control Ancillary Services (FCAS), which means it holds power in reserve to be used for correcting the supply/demand balance in the network.

FCAS services can be tapped in major events like power station fires, broken transmission lines or when big industrial users switch off.

FCAS services in Australia have typically relied on traditional coal, gas, diesel and hydro generators, which take much longer to respond when needed.