Sydney-based developer Genex Power has struck a deal with the Australian arm of United States-based electric vehicle manufacturer Tesla that will provide a minimum amount of contracted revenue for the Bouldercombe Battery Project (BBP).
The two-hour-duration BBP, which will feature Tesla’s Megapack technology integrated with the company’s Autobidder machine learning program for automated energy trading, will be built on land leased from transmission provider Powerlink beside its Bouldercombe substation, 20 kilometres south of Rockhampton.
The offtake agreement announced on Thursday ensures a minimum amount of contracted revenue that will enable Genex to secure financing for the large-scale battery energy storage system, while retaining the ability to capture revenue upside beyond a fixed guaranteed amount.
Genex said the deal provides a fixed and floating revenue share structure that extends cash flow certainty to project lenders and allows the company to retain upside revenue exposure to merchant cash flows from the energy arbitrage and frequency control ancillary services (FCAS) markets.
Genex chief executive officer James Harding said the integration of Tesla Megapack and revenue support arrangements via Autobidder would help streamline the development, construction and operations phases of the project.
“The unique integration of Tesla’s Megapack battery technology and a revenue sharing arrangement utilising Autobidder will reduce the complexity of the project,” he said.
“Importantly the structure of the agreement provides a minimum level of contracted revenues to support project funding, while allowing Genex to retain significant merchant upside.”
Under the offtake agreement, Tesla will operate the project using its proprietary algorithm-based bidding system, Autobidder. At the completion of the eight-year deal, Genex will enter into a license agreement with Tesla to operate Autobidder on the project.
Already deployed on more than 1 GWh of projects globally, including the Hornsdale Power Reserve in South Australia, Autobidder is a real-time trading and control platform that uses a machine-learning algorithm to reportedly optimise dispatch behaviour while adapting to new markets and services. It is hoped it will maximise the revenue of the project.
“The agreement … represents a key milestone for the project as we move forward to financial close,” Harding said.
The offtake agreement comes after Genex signed a supply agreement in October that will see Tesla provide the project with 40 Tesla Megapacks, an all-in-one utility-scale energy storage system.
Bouldcercombe is Genex’s first battery investment. The developer is also building the 250 MW/2000 MWh Kidston Pumped Hydro Project in north Queensland, and operates the 50 MW Kidston Solar Farm and the 50 MW Jemalong Solar Farm in New South Wales.
The Bouldercombe battery is expected to commence operation in early 2023.
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