AGL to begin construction of Australia’s biggest “grid forming” battery in 2024

One of Australia’s biggest batteries – and the biggest, ever, with grid-forming inverter capabilities – will begin construction in the new year, following a final investment decision by AGL Energy for its 500MW/1,000MWh Liddell project in New South Wales.

AGL said on Tuesday it has reached FID on the 500MW, two-hour duration battery it is developing at the Hunter Energy Hub – the site of the Liddell coal fired power station which AGL shut down in April.

The gentailer says construction on the roughly $750 million project is expected to begin in early 2024, with commencement of operations targeted for mid-2026. Fluence is the engineering, procurement and construction provider.

The battery will be funded on AGL’s balance sheet, using operating cash flows and existing debt facilities including AGL’s recently secured green capex loans.

The project will also be supported by a $35 million Arena grant and a Long-Term Energy Service Agreement (LTESA), arranged by AEMO Services on behalf of the NSW government, after it was announced as a winner of the Large Scale Battery Storage Funding Round, last month.

The capacity tender, jointly run by the federal and NSW governments, was held to fill a potential supply gap from the planned closure of Australia’s biggest coal fired power generator, the 2.88GW Eraring facility, on the NSW central coast, currently scheduled for August, 2025.

Arena says the Liddell battery – originally planned at half the size (250MW/500 MWh) – is one of eight projects selected for support through the auction that, together, promise to deliver a tenfold increase in grid-forming electricity storage capacity in the National Electricity Market.

“As coal and gas generators retire, or start to play a lesser role, we’ll …need these new batteries to provide the crucial system security services that are currently provided by these traditional generators,” Arena chief Darren Miller said on Tuesday.

“This is why it is important to fund batteries like AGL’s that are equipped with smart inverter technology which can help stabilise the grid as we transition to renewables.

“We look forward to the construction of AGL’s battery in Liddell and expect to see the other Arena funded grid-forming batteries reach similar milestones in 2024.”

The other winners include the 415MW, four-hour battery (1660MWh) proposed by BlackRock’s Akaysha Energy at Orana in the state’s central west; a 65MW, two-hour battery at Smithfield in Sydney built by Iberdrola, and 90MW of demand response capacity – including three separate virtual power plants – put together by Enel X.

All the projects must be built by December, 2025, and all must be available to deliver at least half their capacity to any LOR3 events (a signal of potential supply shortfalls) that are declared by the Australian Energy Market Operator.

For AGL, the Liddell battery will be its third, having already built big batteries at Torrens Island in South Australia (250MW, one hour) and the soon to start operating Broken Hill (50MW, one hour). It also has contracts to operate third-party batteries at Wandoan in Queensland.

The Liddell battery is one of many around Australia being proposed for development next to an ageing or closed coal plants – sites considered ideal for renewable makeovers due to existing infrastructure, like switching stations and transmission lines.

It also comes on the same day that the NSW government announces winners of its long duration (at least eight hours) storage tender, including two giant eight hour batteries in the state’s north and the upper Hunter Valley, and a world-first (at this scale) compressed air storage project near Broken Hill.

AGL managing director and CEO Damien Nicks says final investment decision on the Liddell battery marks another “significant milestone” in the gentailer’s decarbonisation pathway and the transition of its energy portfolio.

“The Liddell battery will be a key component of achieving our interim target of approximately 5GW of new renewables and firming capacity in place by 2030,” Nicks said on Tuesday.

See RenewEconomy’s Big Battery Storage Map of Australia

And also: World’s biggest eight-hour lithium battery wins NSW long duration storage tender