French renewables developer Neoen has reported the first-quarter 2020 revenue of €95.8 million (AU$ 161 million), an increase of 61% compared to the same period last year. While the key factor behind the surge was the early generation revenue from its assets commissioned in 2019, another major factor was an unprecedented increase in storage revenues earned in Australia.
In the March quarter, Neoen’s total storage revenue came to €21.6 million (AU$ 36.3 million) – almost all of it from the Hornsdale Power Reserve in South Australia (SA) – up from €4.2 million (AU$ 7 million) in the first quarter of 2019. The key reason behind this very hefty increase was “an exceptional non-recurring event in Australia,” the company said.
After a tornado in late January pulled down the Heywood interconnector between SA and Victoria, SA was islanded from the rest of the Australian grid for 18 days. Upon the request of the Australian Energy Market Operator (AEMO), Neoen’s Hornsdale big battery and two other smaller batteries in the state – Dalrymple ESCRI and Lake Bonney – assumed critical roles during this period in maintaining the grid’s reliability while keeping electricity costs down for consumers.
While such unusual network conditions are not expected to repeat any time soon, the Hornsdale Power Reserve, also known as the Tesla Big Battery, earned more in only one quarter than in all of 2019 or 2018. Last year, the developer recorded a nearly 14% increase in annual revenue to €20.5 million (AU$34.5 million) up from €18 million ($30 million) generated in 2018.
The 100MW/129MWh Tesla big battery, located in Jamestown in SA and adjacent to the 315 MW Hornsdale Wind Farm, has already demonstrated its immense value for the grid in a number of ways, largely through grid stabilization services and savings. But the project, which is being expanded by 50%, through the addition of 50MW/64.5 MWh of Tesla batteries, is set to become an even more valuable asset to the National Electricity Market (NEM) through the addition of digital inertia services.
Solar revenues
Neoen’s solar projects also had a big say in the surge of overall first-quarter revenues. Specifically, PV projects commissioned during 2019 in Australia, Zambia, Jamaica, and France saw Neoen’s solar revenues grow 46% compared to the first quarter of 2019. In Australia, the French developer already has six solar farms under its belt and enjoys the status of Australia’s leading independent producer of renewable energy.
In 2018, the developer commissioned five utility-scale PV farms, all in New South Wales, with a combined capacity of just over 250 MW. In 2019, it commissioned a further 100 MW of PV – the Numurkah project that has a major supply contract secured with the Laverton Steelworks and is one of two solar farms supplying 100% renewable energy to offset Melbourne’s entire tram network. Neoen also tops the list of lithium-ion battery developers and ranks within the top 10 wind developers in Australia.
Last week, Neoen confirmed it would build Australia’s largest solar farm in Queensland’s Western Downs region after securing a contract to sell most of the power to the state government-owned renewable energy generator, CleanCo. On top of this, the group has a number of massive projects in its Australian pipeline, including the proposed Goyder South Project featuring 1200 MW of wind, 600 MW of solar, and 900 MW of battery storage. Last month, Neoen and its partner Mondo Power filed a planning application for a massive 600 MW battery storage project near Geelong in Victoria.
Globally, the cumulative capacity of Neoen’s operational projects stood at 2 GW at the end of March. Assets in operation, under construction and awarded, stood at 4.2 GW.
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I’m finding it interesting, the original TESLA “big battery” was 100MW/129MWh, just increased to 150MW/ 193.5MWh and it seems like for just an incremental storage increase FCAS has almost doubled?
Hornsdale is only that profitable because it is in a badly built, run grid.
Any decently made grid has little use of a battery as just varies generation is far cheaper.
For instance the TECO grid I’m on unlikely one would ever get more than $.10/kwh for peak. Now our solar is growing, even cheaper. peak. Why is we have 20% more generation and grid than we need.
Vs Hornsdale is the opposite, 10-20% too little generation, grid capacity. Rather than battery they should be adding generation like solar that kills the summer peak, fast starting, ramping generation later switching to RE fuels.
And they need to demand EVs with V2G and heat, cold storage,, home, building size CSP, CHP and power heat storage, the cheapest forms of storage.
You mentioned 20% over generation in one place and in Australia, it’s 10% to 20% under generation. A white paper published during the California electricity deregulation attempt in 1999, mentioned that a grid would be least cost and competitive pricing would derive from a grid with 25% over generation available. Fast forward 21 years and the beginning roll out of energy storage ready alternative energy projects or energy storage as part of the project mix, is starting to push energy storage as that “thing” that allows a grid to hold onto non-fueled generation and keep a 25% over generation resource ready day or night. As BEVs become a “more acceptable” alternative to ICE transportation, V2G may become common place and the utility will either get with the program or fall by the wayside. If the utility gets to be the energy storage “captain” first, the utility will profit. If the utility lags behind, it will falter and lose to the public at large.