Neoen gives nod to 540 MWh second stage after signing ‘virtual battery’ agreement

French renewables developer Neoen has pressed go on the 270 MW / 540 MWh second stage of its Western Downs Battery being built in Queensland after striking a long-term “virtual battery” contract with AGL Energy.

August 27, 2024 David Carroll

Image: CIMIC Group

Neoen has signed a 10-year offtake agreement with AGL that will allow the energy generating and retailing giant to virtually charge and discharge up to 200 MW / 400 MWh of the Western Downs Battery at any time, helping keep its power supplies stable as it gradually closes baseload coal units.

The service will be backed by the Western Downs Battery being built by Neoen alongside its existing 400 MW solar farm near Chinchilla in Queensland’s southwest.

The first 270 MW / 540 MWh stage of the battery energy storage system is nearing the commissioning phase and Neoen has confirmed it will now push ahead with the development of the second stage that will take the combined capacity to 540 MW / 1,080 MWh.

UGL, which is currently constructing the first stage of the battery, has been appointed to design and construct the second phase which is to include 140 Tesla Megapack 2XL units.

Stage 1 of the battery is expected to be operational in early 2025 and Stage 2 is expected to commence operations by mid-2026.

This is the second virtual battery agreement between AGL and Neoen, following the seven-year agreement announced in 2022 relating to 70 MW of Neoen’s 100 MW / 200 MWh Capital Battery in the Australian Capital Territory.

AGL Chief Operating Officer Markus Brokhof said the offtake agreement increases the gen-tailer’s contracted virtual battery capacity, helping the delivery of reliable and flexible energy to the market.

“The ability to virtually charge and dispatch this battery increases the number of tools we can use to support our customers’ needs while also supporting electricity supply into the grid,” he said.

“Virtual battery agreements provide flexibility within our firming portfolio without the requirement to build, operate, and maintain the physical battery.”

For Neoen, the arrangement gives it a contracted customer for 200 MW capacity of the Western Downs battery and leaves it with enough to provide services to the grid.

“We are delighted to secure this second virtual battery contract with AGL and value their continued trust in our innovation,” Neoen Australia Chief Executive Officer Jean-Christophe Cheylus said, noting that the second 270 MW / 540 MWh stage takes the company’s portfolio of assets in operation or under construction to more 1 GW in Queensland.

Neoen also owns and operates the 300 MW / 450 MWh Victorian Big Battery near Geelong, and the 150 MW / 193.5 MWh Hornsdale Power Reserve in South Australia, and is building the 560 MW / 2,240 MWh Collie battery in Western Australia.

For AGL, the offtake agreement is a key component in its strategy to deliver the energy supply mix of the future, which includes a growing battery energy storage portfolio.

AGL already operates the 250 MW / 250 MWh Torrens Island in South Australia and the 50 MW / 50 MWh battery at Broken Hill in New South Wales (NSW).

It has commenced construction of the 500 MW / 1,000 MWh Liddell battery and is developing the 500 MW / 2,000 MWh Tomago battery in NSW, in addition to other big battery projects in that state, Victoria, South Australia, and Queensland. It also has contracts to operate the 100 MW / 150 MWh Wandoan South battery in Queensland and the 30 MW/8MWh Dalrymple battery in South Australia.

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