Sostoneo, launched only last month by Italy-headquartered insurance and asset management provider Generali Group, has acquired 100% of the $400 million (USD 254 million) Koorgangie Energy Storage System (KESS) project being developed near Kerang in Victoria by Edify Energy.
The 185 MW/370 MWh Koorgangie project, being built within the planned Murray River Renewable Energy Zone (REZ), is supported by a 15-year term offtake agreement with Shell Energy and includes a 20-year system support agreement with the Australian Energy Market Operator (AEMO) for the provision of system strength.
Developed and structured by Sydney-headquartered Edify and due to begin operations in early 2025, the KESS will utilise Tesla Megapacks, equipped with grid-forming inverters that operate in ‘virtual machine mode’.
Edify founder and Chief Executive Officer John Cole said this will allow the battery energy storage system to operate in a manner akin to a conventional generator and provide crucial system strength services to increase the renewable hosting capacity of the Murray River REZ.
“We love the fantasticness of KESS,” Cole said, noting “it’s ability to provide system strength services to AEMO while not compromising on its ability to perform in the energy market for the benefit of Victorian electricity consumers and providing a path to a 100% renewable electricity future.”
The KESS project is the first investment in Australia for Sosteneo following its launch last month.
The company, which includes former Australian Renewable Energy Agency (ARENA) CEO Ivor Frischknecht, and Umberto Tamburrino, formerly at Elliott Green Power, among its team, said the project forms part of its plan to grow a clean energy portfolio spanning Australia, New Zealand and Europe.
Frischknecht, managing partner and chief investment officer for Sosteneo in the Asia Pacific, said the KESS project delivers on the company’s strategy of investing in greenfield infrastructure projects that produce or enable clean energy use and accelerate the transition to net zero.
“With revenues secured through long-term agreements with Shell Energy and AEMO, the KESS project is well-aligned with our objective of delivering stable commercial returns to clients whilst making an active contribution to the decarbonisation of the energy system,” he said.
While the KESS project has long-term deals in place with Shell and AEMO, it will benefit from part of a $480 million investment the Victorian government is making through its Renewable Energy Zone Fund in 12 projects to address capacity constraints and strengthen and modernise the state’s grid.
The project will also contribute to Victoria’s drive to meet legislated energy storage targets of at least 2.6 GW of storage capacity by 2030 and 6.3 GW by 2035.
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