Massive AGL deal set to push Australia into the battery age

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Australia’s biggest power producer, AGL, has signed a deal with Maoneng Group (Maoneng) to secure electricity prices during peak periods through the development of four large-scale batteries.

The deal will see Maoneng develop four large-scale batteries, each 50 MW/100 MWh in capacity in New South Wales (NSW). That’s enough energy to power up to 30,000 homes. AGL will have the ability to draw on this stored energy at a fixed price for 15 years. The lack of fluctuation in the cost of electricity means AGL customers can look forward to fewer price fluctuations during peak periods. 

Maoneng Group Vice President, Qiao Han Nan, spoke to the role energy storage will play in the energy transition. “Energy storage will play a critical role in balancing both the energy market and ensuring the stability of the network for Australia’s future,” Nan said. “Our agreement with AGL will accelerate the country’s transition to renewable energy and help provide reliability and security for AGL customers during peak periods well into the future.”  

AGL CEO Brett Redman said the agreement heralds a new era for the company, customers and the National Electricity Market (NEM). “This is the dawn of the battery age and AGL is proud to lead the way,” Redman said. 

The dawn of the battery age? One might be forgiven for thinking Redman guilty of exaggeration, of living in a dream world. But a new dawn is first witnessed by the dreamers, those who travel at night. Nobody thought the atom splittable, the word ‘atom’ itself means uncuttable, and yet split it was, and so dawned the Atomic Age. 

We have been living with batteries for a long time now, and perhaps it is time they came of age. The dawning of the Atomic Age brought with it the ability to release immense amounts of energy, and it is time we gained the ability to store such energy. Is that so romantic? Actually, it’s rather prudential. In the Atomic Age, we nearly destroyed our world, in the Battery Age we have the chance to save it. 

Redman acknowledges that the NEM is undergoing significant changes, changes which cannot be sustained without large-scale battery storage. These batteries, says Redman, “will be pivotal in providing firming capacity in the shift between baseload power and renewables.” AGL believes this large-scale battery access will support at additional 200 MW of dispatchable capacity in NSW. 

Of course, these are not the only energy storage projects AGL has in the pipeline. The Dalrymple Battery Project in South Australia (SA) came online in January 2019, not to mention two massive pumped hydro energy storage projects at Kanmantoo in SA and Bells Mountain in NSW’s Hunter region. 

Of course, AGL is also in the process of expanding its residential battery program, a Virtual Power Plant (VPP) across four states – Victoria, South Australia, New South Wales and Queensland after successful trials in SA.  

The deal builds on the 300 MW Solar Offtake deal AGL signed with Maoneng in December 2017 by which AGL sources energy from, among other solar projects, the 255 MW Sunraysia Solar Farm. 

Though it seems as if Maoneng has not yet decided on the chemistry of the batteries it intends to build, the company is confident the four batteries will be operational from 2023. 

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