Bowen backs NT renewables drive with $250 million for batteries, solar and grid upgrades

Federal Labor will tip $250 million into upgrading and expanding the electricity grid in the Northern Territory, in a deal with the Lawler government that will accelerate the rollout of transmission projects and of community-scale solar and storage.

The agreement is the fifth that federal energy minister Chris Bowen has negotiated under the $20 billion Rewiring the Nation program, with previous deals in New South Wales, Tasmania, Victoria and Western Australia.

In a joint statement on Thursday, the federal and NT governments say projects financed under this particular deal “will contribute to the energy mix across the Territory by increasing amounts of renewable generation such as solar and wind and reducing reliance on power generation from fossil fuel.”

A high priority for funding would be the NT government plan – announced in March – to treble the size of large-scale battery energy storage system installed on Territory’s main grid, the Darwin-Katherine Interconnected System (DKIS), which powers the homes of around 150,000 people.

The addition of big batteries to the Darwin-Katherine grid aims to reduce the amount of gas generation the NT has spinning in reserve, with the first 35 MW BESS expected to save at least $9.8 million a year in fuel costs and pay for itself within five years of commissioning.

The government said in March that a second 70MW battery will deliver more fuel savings, and enable more solar capacity by providing frequency and voltage control services. Commissioning is targeted from 2026.

“Battery technology will play a significant role in our target of reaching 50% renewable energy consumption by 2030,” NT chief minister Eva Lawler said on Thursday.

“By owning our assets we can keep power prices low.”

Beyond the DKIS, the $250 million in federal funds announced this week is also expected to be used for clean energy projects in Alice Springs and Tennant Creek, as well as to deploy community-scale storage, rooftop solar and clean energy technologies for consumers locked out of rooftop solar.

“The Albanese government sees the states and territories as key partners in unlocking more jobs and cheaper power bills through the energy transformation,” Bowen said on Thursday.

“Today’s deal with the Northern Territory government is another step towards that.

“This agreement will put downward pressure on energy costs for Territorians.”

The news of the funding for the NT was welcomed on Thursday by the Australian Conservation Foundation, which said it would create hundreds of clean energy jobs and contribute to the Territory’s economic and energy resilience during climate extremes.

But the ACF also noted that the money from the Rewiring the Nation program made the Albanese government’s continued support for the Middle Arm fossil gas precinct seem even more misguided.

“Environmentally irresponsible plans to frack for climate-wrecking gas in the Beetaloo Basin would be facilitated by the government’s promised subsidy for a gas processing facility at Middle Arm in Darwin Harbour,” said ACF climate and energy program manager Gavin MacFadzean.

“It’s time for the Albanese government to stop trying to walk both sides of the street on energy.”