BlackRock signs “first of its kind” risk hedging deal for big Queensland battery

Akaysha Energy, the battery storage developer owned by the world’s biggest asset manager BlackRock, says it has landed a “first of its kind” revenue swap and risk hedging deal for the 300MWh Ulinda Park battery it is planning to build in Queensland.

The deal has been struck with the Bermuda-based Re2, a leading climate risk transfer platform, and involves a 10-year revenue swap arrangement that hedges the market risk for the 155MW, 300MWh Ulinda Park Battery Energy Storage System (BESS) near Hopeland.

Nick Carter, the CEO of Akaysha Energy, which is also building the Waratah Super Battery in NSW, the country’s biggest at 850MW and 1680MWh, says the revenue swap will provide a balance of contracted and unhedged revenue.

“The revenue swap product that we have developed with Re2 is exactly the sort of innovative offtake product that we need in the market right now to help accelerate the build-out of large-scale battery projects like Ulinda Park,” Carter said in a statement.

“The 10-year revenue swap provides the right balance of contracted and unhedged revenue, while still allowing us to operate the project and bid into the energy and FCAS markets in the NEM.”

Details of the exact workings of the revenue swap agreement have not been released, so it may well be the “first of its kind.” But various kinds of revenue sharing deals have already been struck for some big batteries.

The Macquarie backed Eku Energy has signed a form of revenue sharing with the ACT government, in return for a fixed quarterly fee that lowers the cost of capital, for the 250MW, 500MWh Big Canberra Battery.

And Genex Power has a revenue sharing deal with Tesla as part of the agreement for the supply of Megapack batteries for the 50MW/100MWh Bouldercombe big battery that is entering its commissioning phase.

Re2 says risk management solutions driven by the private sector will be essential to the build out of energy storage systems at a scale necessary to support the continued growth of variable renewable energy.

“We are … excited to have had the opportunity to collaborate with Akaysha and BlackRock on this risk transfer transaction,:” Re2 CEO Richard Oduntan said in a statement.

“The team at Re2 has a well-earned reputation for bringing innovative products to the renewable energy market, and we look forward to continuing to play a catalyzing role in the energy transition.”

Akaysha expects the Ulinda Park battery to begin construction later this year and commence operations in 2025. It will be located next to the Western Downs substation in an area with multiple wind and solar farms and projects.

Akaysha also proposes to build the Orana big battery in NSW, which could be sized at up to 1600MWh and eight hours storage, and has also unveiled the Elaine big battery project in Victoria, which could be sized at 200MW and 800MWh, or four hours storage.

See also RenewEconomy’s Big Battery Storage Map of Australia