Australia is again looking to maintain its position as having the world’s largest battery storage system. The Australian Energy Market Operator (AEMO) announced on Thursday it had completed the System Integrity Protection Scheme (SIPS) procurement process on behalf of the Victorian Government and confirmed Neoen had been awarded the contract.
The France-based renewable energy producer will deliver the battery in collaboration with Tesla and network partner AusNet Services and will oversee its ongoing operation and maintenance.
Under the SIPS contract, which extends until 2032, AEMO will reserve 250 MW of the battery’s 300 MW capacity to operate in a control scheme to increase the capability of the Victoria to New South Wales Interconnector (VNI) and respond to unexpected network outages.
AEMO said the battery will provide an automatic response in the event of an outage, providing additional means of ensuring grid stability. The battery will also participate in the National Electricity Market (NEM) and support increased penetration of renewables in Victoria through network services such as fast frequency control.
AEMO managing director and CEO Audrey Zibelman said the procurement process had attracted significant interest with Neoen’s proposal a standout.
“Neoen’s solution, developed with Tesla and AusNet Services, on a unit cost basis, was a significantly more cost competitive and attractive market response than other major battery developments in Australia,” she said.
Neoen Australia’s managing director Louis de Sambucy said the company was looking forward delivering a “world-leading battery storage facility”.
“We are extremely proud to be launching a project of this scale and innovation in support of Victoria’s clean energy transition,” he said.
The Victoria Big Battery will be installed near the Moorabool Terminal Station near Geelong and is expected to be operational by November 2021.
It will be the largest battery yet constructed in Australia at twice the size of 150 MW/194 MWh Hornsdale Power Reserve in South Australia. Tesla and Neoen partnered on both stages of the Hornsdale battery project.
The new Victorian battery is just the latest for Neoen which has in recent months secured tenders for the first stage of the Goyder South project in South Australia and a big battery in Canberra. Neoen also built the soon-to-be commissioned 20 MW/ 34 MWh Bulgana green power hub in north west Victoria.
The Victoria Big Battery will rely on Tesla’s Megapack technology which is also being utilised in Transgrid $61.9 million Wallgrove Grid Battery in Western Sydney.
Victorian Minister for Energy, Lily D’Ambrosio, said the “humongous” will be instrumental in helping the state reach its objective of 50% renewables by 2030.
“Victoria is embracing new technologies that will unlock more renewable energy projects than ever before – delivering clean, cheap, reliable power to all Victorians,” she said.
“By securing one of the biggest batteries in the world, Victoria is taking a decisive step away from coal-fired power and embracing new technologies that will unlock more renewable energy than ever before.”
Clean Energy Council chief executive Kane Thornton said the battery will play a significant role in the state’s accelerated transition to renewable energy.
“The battery … will provide key grid support services, particularly in peak periods should there be unexpected network outages,” he said.
“Consumers will also benefit from low-cost power, with the battery able to store energy from clean wind and solar.”
The battery is expected to have a major impact on wholesale energy prices with independent analysis showing that every $1 invested in the battery will deliver more than $2 in benefits to Victorian households and businesses.
Criticism from generators
Meanwhile, the Australian Energy Council (AEC) has raised concerns about the lack of independent regulatory scrutiny of costs associated with the project.
De Sambucy refused on Thursday to reveal the cost of the project, saying only that “the cost of technology is going down” and AEC chief executive Sarah McNamara said it is unclear how costs will be passed on to end users, or if any detailed cost-benefit analysis has been undertaken.
“The AEC supports private investment in response to market signals, however this battery will be funded by Victorian consumers whether or not it proves useful,” she said.
“It is being developed under new legislation that allows the Victorian Minister to direct such developments outside the national planning and regulatory framework.
“It will also impact private investment decisions made in good faith within that framework.
“Every decision like this unavoidably affects market investments so careful individual assessments should be carried out at arms-length from political decisions. While it is clear this battery will participate in the energy market, it is not clear who will make decisions on when or how it will be used, which will unavoidably affect other market participants.”
This article was updated on 6/11/2020 to include comment from AEC and the additional detail from Neoen regarding its price.
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