One of the largest lithium-ion batteries in the world is planned for the southern state of Victoria after the renewable energy company Neoen won a contract to build it near the regional city of Geelong.
Neoen, one of the world’s leading and fastest-growing producers of exclusively renewable energy, has been awarded a 250-megawatt (MW) grid services contract by the Australian Energy Market Operator (AEMO).
Once constructed, the battery will have a power capacity of 300MW and a storage capacity of 450 megawatt-hours, making it more than twice the size of the battery at Hornsdale, South Australia, also owned by Neoen, which was the biggest in the world when it began operating in 2017.
Like the Hornsdale facility, the Geelong battery will be delivered in collaboration with Tesla, using its Megapack technology, and network partner AusNet Services.
The Victorian state Labor government energy and climate change minister, Lily D’Ambrosio, said it would be installed near Moorabool Terminal Station and would be ready for the 2021-22 summer.
“By securing one of the biggest batteries in the world, Victoria is taking a decisive step away from coal-fired power and embracing new technologies that will unlock more renewable energy than ever before,” Ms D’Ambrosio said.
It is expected to store enough energy to run about 500,000 homes for half an hour.
It has been scaled back since it was first flagged in April when it was expected to be 600MW and cost $300 million.
While among the largest batteries in the world, it is smaller than batteries yet to be built in California and New York.
The Labor government aims to source 40 per cent of the state’s electricity from renewable energy by 2025, and 50 per cent by 2030.
She said consumers would pay for the use of the battery through their power bills, but suggested it would lead to a reduction in wholesale energy prices so that Victorians were charged less for electricity.
Independent analysis found that Victorians would receive $2 in benefits for every $1 invested in the battery, she said.
Energy consultancy Aurecon found the Hornsdale Power Reserve saved consumers $116m in 2019.
Neoen won the right to build the Victorian battery through a tender run by the AEMO.
Its contract, which runs until 2032, requires the battery to fill the breach if there is an unexpected network outage.
It will also provide network services needed to support variable renewable energy, such as fast frequency control.
The tender process was initiated by the Victorian government.
Audrey Zibelman, AEMO’s CEO, said: “AEMO’s competitive procurement and evaluation process attracted significant interest.
“Neoen’s solution, developed with Tesla and AusNet Services, on a unit cost basis, was a significantly more cost competitive and attractive market response than other recent major battery developments in Australia.”
Victoria’s Australian Greens Party welcomed the announcement, saying it was part of what it had proposed under its “green new deal” plan.
However, the acting leader, Ellen Sandell, said the battery should have been publicly owned.
The conservation group Environment Victoria said it was a “game-changer for Victoria’s transition from old coal-burning power stations to clean energy”.
“This big battery gets us halfway to the storage target we need to prepare for the closure of Yallourn coal-fired power station,” the group’s chief executive, Jonathan La Nauze, said.
There are expected to be 80 jobs during construction of the battery, but just six full-time permanent positions once it is built.
The introduction of another large battery into the grid will further chip away at the extent to which it relies on gas-fired power for “dispatchable” generation that can be called on to support variable renewable energy.
Xavier Barbaro, Neoen’s Chairman and Chief Executive Officer said: “The Victorian Big Battery and the grid support services it will provide heralds a new era for large scale energy storage in Australia.
“We will continue to build on this experience to deliver world-leading solutions that help to shape and transform the grid of the future for the benefit of industry and consumers across Australia and around the globe.”
AEMO has estimated the national grid is likely to need between six and 19 gigawatts of dispatchable power by 2040 as the system is increasingly dominated by solar and wind.
It found renewable energy may at times provide nearly 90 per cent of electricity by 2035, which meant the amount of gas-fired power would fall as pumped hydro and batteries came online and there was no place for new coal-fired generation.
AEMO’s chief executive, Ms Zibelman, said a portion of the battery’s capacity would be reserved to increase electricity supply over an interconnector cable between Victoria and New South Wales.
EcoNews is an independent publication that relies on contributions from its readers.
WE’RE BUILDING A PLATFORM WITH A CLEAR FOCUS ON THE ENVIRONMENT, CULTURAL AND SOCIAL GOOD. CONTRIBUTE AND TOGETHER WE CAN MAKE AN IMPACT.
If you value EcoNews, but are unable to contribute via sponsorship or advertising we ask that you promote our online store The Native Shop – www.nativeshop.com.au via your social media to assist us to fund this valuable service.
