Neoen makes call on Collie battery after winning second AEMO contract

Neoen confirmed it has been awarded a 300 MW, four-hour capacity services contract for the South-West Interconnected System (SWIS) by the Australian Energy Market Operator (AEMO) as it looks to address risks relating to the retirement of ageing coal-fired generators and increasingly high penetration of rooftop solar in Western Australia (WA).

The services contract will be satisfied by the 341 MW / 1,363 MWh second stage of the Collie battery energy storage system being built near the town of the same name about 200 kilometres south of state capital Perth.

The second stage follows on from the 219 MW / 877 MWh first phase, which won a 197 MW, four-hour contract with AEMO in mid-2023, and is currently being built and is on track to commence operating in Q4 2024.

Neoen said it has now provided notices to proceed to construction contractor UGL and battery manufacturer Tesla, which is providing the energy storage technology, with stage two of the battery expected to be operational in late 2025.

AEMO’s non-co-optimised essential system services (NCESS) contract requires the battery to provide 300 MW of storage capacity and discharge that capacity for four hours across the evening peak. The contract is valid for a period of two years starting from 1 October 2025.

“This is intended to address the risks AEMO has identified related to the retirement of coal power plants, high penetration of rooftop solar and increasing energy demand in Western Australia,” Neoen said.

The developer said the combined 560 MW / 2,240 MWh Collie battery is poised to become a critical component for the stability and efficiency of WA’s electricity network, noting it will have the ability to “charge and discharge 20% of the average demand” in the SWIS.

“Long-duration storage is becoming a clear need for electricity networks in transition, particularly as new constraints emerge,” Neoen Chairman Xavier Barbaro said.

Energy Policy WA Coordinator of Energy Jai Thomas said the Collie battery project is another important step toward a greener and more resilient power system as the state moves away from coal-fired generation.

“Once complete, the battery will be a massive boost for energy storage and stability in the South-West Interconnected System,” he said.

The notice to proceed on the second stage of the Collie battery takes Neoen’s total asset portfolio in Australia to 4 GW of capacity in operation or under construction.

“It represents an extraordinary collective effort over the past 12 years,” Neoen Australia Chief Executive Officer Louis de Sambucy said.

That Australian portfolio includes 1.3 GW of solar, 1.1 GW of wind, and 1.7 GW / 4.2 GWh of battery energy storage across six Australian states and territories. The company is aiming to have 10 GW in operation or under construction by 2030 in Australia.