A grid with no smokestacks: Octopus snaps up biggest battery project and solar hybrid in push to replace coal

Octopus Australia, an offshoot of British clean energy investment giant Octopus Group, has struck deals for the purchase of two major battery projects, one a massive facility of up to 4.8 gigawatt-hours in NSW, and the other a smaller solar-battery hybrid project in Queensland.

Octopus is buying the Hanworth battery project near Bannaby, west of Bowral, from development company Enervest, which at full scale will deliver 1.2 gigawatts (GW) and 4.8 gigawatt-hours (GWh) of storage capacity. If built now it would rank as the biggest in the country.

It is also buying the Dunmore hybrid project in Queensland from Korean giant Samsung, which will combine a 300 megawatt (MW) solar farm paired with a 150 MW, 300 MWh battery. Together, the projects would represent investment of more than $3 billion once built.

“Australia still needs new power stations to replace ageing coal plants. The difference is that today we can build them using a mix of solar, wind and batteries instead of smokestacks,” Octopus Australia managing director Sam Reynolds said in a statement.

“By owning and operating our projects as one portfolio, we can deliver reliable power every day of the year – not just when the sun shines or the wind blows. This is about replacing coal with clean energy that works in the real world.”

Octopus is positioning itself as one of the most powerful clean energy investors in Australia, and already owns several operating assets, and with a host of new projects in developments, mostly involving storage.

Reynolds says the huge Hanworth battery energy storage system (BESS) – which is due to begin construction in June 2028 – will form part of a “ring of batteries” Octopus wants to build around Sydney to satisfy contracts for firm power on “the strongest part of the grid, closest to the big demand centre.”

The decision to acquire the Queensland Dunmore project, he says, was more “opportunistic,” as a good fit with Octopus’ operational Dulacca wind farm in the state’s south, near Roma.

“We also will start construction in June on our Blackstone 1 GWh battery just outside of Brisbane, and it’s a good example of exactly the model we want: wind, solar and a number of batteries in there to provide that reliable energy to compete with coal.”

Reynolds, who is a born and bred Brisbanite, says Octopus remains bullish about the Queensland renewable energy market, despite the marked change in policy direction since the late 2024 election of the Liberal Crisafulli government.

“I think for a quite a few investors [the shift in policy has] changed the game. They’re seeing … a little bit less encouragement, if you like, in Queensland from the government,” he told Renew Economy on Thursday.

“We are probably taking a bit of a different view. We’re actually seeing this as quite a big opportunity.

“If the Queensland government is removing some of the investment from government organisations – CleanCo, CS Energy, Stanwell – if they are making planning approval a little bit more challenging for new projects… what those things are doing, they’re reducing the potential for new supply to be hitting the grid as soon as it’s needed.

“Their coal-fired power stations, even though they’ve got a relatively young fleet, it’s still a 30-year-old fleet of energy generators. And what we’re doing at Octopus is building today’s technology.

“Yeah, it just happens to be renewable, but we’re just building today’s technology to put electricity into the grid. And if we can’t build today’s technology and compete with a 30 year asset, we’re probably doing something wrong.”

Reynolds says Octopus Australia’s multi-pronged investment strategy – including its ability to raise significant chunks of capital from big institutional investors – has allowed the company to step up and continue growing its portfolio at a time when others are stepping back.

“We can develop with confidence because the money we raise is all for deployment in Australia,” he tells Renew Economy.

Another of the company’s key strategies is to ensure that the product it is supplying is firmed power – “a similar product to what you might buy of coal or gas, but it is just happens to come from renewable energy.”

Another priority for Octopus has been to ensure that it’s looking after the community it’s working in, including ensuring a decent share of local content for each project.

“On our [solar and battery] asset in Fulham in Gippsland, 30 per cent of the workforce is from Gippsland, and we’re really keen to make sure we promote that local benefit – to get jobs back into the rural area.

“It just helps helps the overall project. There’s a bit of pride in what people are doing on site because they’re from the local area.

“I think it [also] helps our branding – the communities talk a lot; our southern Queensland community will talk to our community in Riverina, and talk to Gippsland.

“I actually don’t know how they get each-other’s numbers, but they talk to each other and ask, ‘Does Octopus deliver on this stuff, or are they just all talk? Do they back up their promises through the development?’,” Reynolds says.

“We develop to own for 30 or 40, years. So it’s a bit more difficult, I guess, for us to hide. We’re not selling the project for someone else. So if we promise something, we need to deliver on it, because we’re going to be with the community for 30 to 40, years.”

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