A $3 billion renewable energy hub in South Australia will begin construction within the next two years after French-based developer Neoen landed a contract for the first 100MW of wind capacity with the ACT government, with a record low price for Australia.
The $3 billion Goyder project is one of the most ambitious in Australia, poposing to combine 1200MW of wind, 600MW of solar and 900MW/1800MWh of battery storage. Each component is the biggest of their kind in Australia, and together the hub is the biggest of its kind in the world.
Neoen announced on Tuesday morning that it has been awarded a 14-year contract to supply 100MW of wind energy from Stage 1 of its Goyder Renewables Zone as the result of the Australian Capital Territory government’s latest renewables auction, a win that will also see it build a 50MW big battery in Canberra, with locals offered the opportunity to co-invest.
The ACT said the contract was awarded at the price of $44.97/MWh, which is a record low for a publicly disclosed price for a wind auction or power purchase agreement in Australia.
Given that this is a fixed and flat price for 14 years, the “real price” for when the contract starts in 2023 relates to $35/MWh to $37/MWh, depending on your assumed inflation rate. That equates to less than half the average wholesale price in NSW and the ACT last financial year.
Goyder is expected to be able to deliver this because it has a great wind resource and will have a healthy “net” capacity factor of around 45 per cent, and the certainty of a long term contract will allow it to secure finance for the first stage, and then be able to build upon that over time.
The Neoen battery in Canberra will, in effect, be a replica of Neoen’s Hornsdale big battery in South Australia and will deliver much the same services – frequency control, inertia, arbitrage and other grid services. There is no direct subsidy for the battery.
The ACT has already contracted enough wind and solar to meet the equivalent of all its annual electricity needs, but last year sought a minimum 200MW of wind, or 250MW of solar, plus battery storage, to take into account economic and population growth, and the electrification of transport and building energy use.
The second contract awarded on Tuesday by the ACT government is for a 100MW expansion of the Berrybank wind farm in Victoria, and developer GPG will also build a 10MW/20MWh battery. The 10 year contract is for $54.48 per MWh.
It is the fourth contract win with the ACT for Neoen, which built the first three stages of its Hornsdale wind farm in South Australia as a result of previous ACT auction wins. It then built the so-called Tesla big battery at Hornsdale and also recently won a Queensland tender with the 420MW Western Downs solar farm.
Neoen recently started the planning process for Goyder, where it hopes to leverage the exceptional wind and solar renewable resources of the area and deliver a significant economic boost to the local community. Construction is expected to start in 2022 for the first stage.
The location for the Canberra big battery is not yet decided, but the installation will be at leat 50MW, possibly bigger, and with one or two hours of storage. It is separate to the world-leading 900MW big battery with two hours storage planned for Goyder.
“The Goyder Renewables Zone that supports this contract is a landmark project that will not only provide a significant boost to the South Australian economy but will also allow all Canberrans to benefit from clean, reliable and affordable electricity,” Neoen’s Australia chief Louis de Sambucy said in a statement.
ACT climate change and sustainability minister Shane Rattenbury said the ACT has been an Australian leader in being powered by 100% renewable electricity and is using reverse auctions like this to make sure we continue this as our city expands and our power consumption increases.
“The batteries will also help support the territory’s own grid, particularly providing power to help avoidblackouts during periods of high demand and when large fossil fuel generators fail in heatwave conditions.”
South Australia energy minister Dan van Holst Pellekaan, who aims to reach “net 100 per cent renewables” by 2030, says the Goyder project was proof of the benefits of the proposed new transmission link between South Australia and NSW.
“It’s proof of the investment we can secure with the interconnector – leading to cleaner, more affordable, more reliable power,” he said in a statement. “Without the interconnector, SA cannot host a project of this scale.”
The contract will extend a partnership between Neoen and the Canberra Institute of Technology’s Renewable Energy Skills Centre of Excellence, where Neoen will co-develop programs in cyber security for renewables, Indigenous land care and hydrogen.
Work will also commence with ANU (Australian National University) on an industry-leading research project focussed on grid-scale battery performance optimisation, as well as a feasibility study for a solar panel and/or battery recycling facility.
The public exhibition for the Goyder project opens today.