Alinta wins court battle forcing contractors to hand over key battery project parts

Alinta has won a court battle against the former contractors for its Wagerup big battery project, after the Supreme Court of Western Australia ordered them to deliver delayed components.

The Court granted a mandatory interlocutory injunction requiring China-based Shanghai Electric Power Design Institute and the Perth-based Sunterra Energy to deliver inverters, cables, transformers and batteries for the delayed $182 million project.

The 100 megawatt (MW), 200 megawatt-hour (MWh) battery Wagerup began construction in late 2023 and was originally supposed to start commissioning in late 2024 and to be completed by the end of January this year.

But by September, the project was still unfinished and Alinta cancelled its contracts with Shanghai Electric Power Design Institute and Sunterra Energy, awarding a $50 million contract to ASX-listed GenusPlus Group to finish the job.

But the contractors refused to accept the termination, and refused to let GenusPlus collect the last pieces of equipment. 

The energy giant sued the two companies over $110 million of missing equipment and told the court that delays in getting the final pieces of equipment were costing it $300,000 a day.

Last week Justice Alain Musikanth ordered both contractors to deliver all of the remaining pieces of equipment.

In his reasoning, published yesterday, Justice Musikanth said Alinta had fully paid all of the payment milestones to the point where they were ready to dispatch.

Although later milestone payments for delivery to site hadn’t been made, Justice Musikanth said payments up to dispatchability effectively meant Alinta now owned the equipment, and the contractors had to “deliver up” the inverters and batteries when it terminated their contracts. 

The injunction doesn’t mean the contractors won’t, or can’t, continue the legal fight, Justice Musikanth said.

The project is now anticipated to be finished in April next year, meaning the Wagerup battery will be more than five months late to a contract with the Australian Energy Market Operator (AEMO) to store excess rooftop solar output in the middle of the day and feed it back into the grid in the evening.

The “solar soaker” contract was supposed to start on October 1.

An Alinta spokesperson did not respond to questions about the impact of the delay on the AEMO contract, but did say the company is now focused on “the timely completion of the battery.”