Australia’s first privately funded big battery to be hosted in Melbourne

Lumea, an arm of private transmission company Transgrid, on Monday announced plans for a 300 MW big battery to be fully financed from private sector without government funding. To do so, the company has launched a selective Expression of Interest (EOI) tender and is seeking proposals from suppliers and developers.

The big battery would be housed in the Deer Park Energy Hub, which Lumea described as a key source of electricity for metropolitan Melbourne. The company says the tender process will ultimately determine the optimal size and duration of the battery.

Naturally, the energy storage system will be connected to the National Electricity Market (NEM) as it is seeking to supply system reliability services to the grid which are increasingly in demand and often fairly profitable.

In April, electricity rule maker the Australian Energy Market Commission (AEMC) proposed rewards for fast frequency services in the NEM for the first time, with the move largely hailed as a major leg up for big batteries in the country.

Australia currently has a handful of big batteries in operation, including the country’s biggest and most famous, the Hornsdale Power Reserve in South Australia, which has proven lucrative for French owner, Neoen. Australia also six more big batteries currently in construction and a bulging pipeline following what can only be described as an onslaught of battery announcements in the first few months of 2021. Those include a 500 MW / 1000 MWh battery in Western Sydney again from Neoen, which was coincidentally announced on the same day energy giant Origin proposed a 700 MW battery at its Eraring coal generator in the NSW Hunter region. Just yesterday, developer Maoneng lodged plans to construct a ‘critical’ 225 MW/450 MWh utility-scale battery at Gould Creek in South Australia.

Following the slew of battery plans, Cornwall Insight Australia’s Principal Consultant, Ben Cerini, told pv magazine Australia that it could see storage pricing in Australia ‘cannibalise’ itself. In the meantime, almost all of the country’s large-scale energy storage projects have relied on funding from government bodies like the Australian Renewable Energy Agency (ARENA) or the Clean Energy Finance Corporation (CEFC).

Lumea is hoping to demonstrate the big battery market in Australia is mature enough now to stand on its own two feet.

“Lumea is looking to demonstrate that batteries can be fully funded through the market. We know that the energy transition requires innovative pathways to reach its renewable targets. It is critical we also find new avenues to fund these projects through the market to allow the most effective use of all funding sources for lower cost energy,” Lumea’s Head of Infrastructure, Nigel Buchanan said.