Bowen signs deal to treble large scale wind and solar capacity, and double storage in the West

The federal and state Labor governments have signed a deal that locks in Commonwealth funding to nearly treble the amount of large scale wind and solar capacity in Western Australia, and provide another massive boost to storage capacity in the state.

The deal announced by the two governments comes as the first big battery storage tender – seeking 500 megawatts (MW) of capacity and 2,000 megawatt hours (MWh) of storage opens on Monday. A total of 1,100 MW and 4,400 MWh of storage will be sought in this and subsequent storage tenders, with most likely to be in the form of big batteries.

The deal signed by federal energy minister Chris Bowen and his state counterpart Reece Whitby also flags 6.5 terrawatt hours (TWh) of new generation, which is equivalent to more than 2 gigawatts (GW) of new wind and solar.

That will effectively treble the amount of wind and solar on the state’s main grid – known as the South West Interconnected System – and lift its share of generation to more than 50 per cent. (The state currently has around 1.2 GW of large scale wind and solar and annual production of around 3.6 GWh).

With the addition of the state’s rapidly growing rooftop solar installations, this new capacity will take the total share of renewables to around 70 per cent, perhaps more, by 2030 when the last of its remaining coal fired generators are expected to retire.

The deal with Western Australia is the second signed by the federal government as it seeks to lock in details of the funding agreements under its Capacity Investment Scheme, now the flagship policy to help reach its ambitious of reaching 82 per cent renewables by 2030.

Two weeks ago, Bowen signed a deal with South Australia for around one gigawatt of new wind and solar, and 600 MW (2,400 MWh), which will take that state to 100 per cent net renewables, the first grid in the world to reach that milestone without the assistance of hydro or geothermal.

Western Australia’s grid will not reach such a high percentage, but a 70 per cent share of wind and solar will still be significant, and world-leading in an isolated grid of its size. The W.A. grid has no links to other states or countries so it cannot export and import power when needed. That presents bigger challenges to the grid operator.

“This is an important day for Western Australia and our partnership that’s delivering certainty and progress, and cheap, clean reliable energy to the market and to households,” Bowen said in a statement.

“Through our Renewable Energy Transformation Agreement we’re collaborating to lower the remaining obstacles to delivery of energy infrastructure, and ensuring progress continues seamlessly across jurisdictions.“

Whitby said the state Labor government is already investing more than $5 billion in new solar, wind and battery developments, and the CIS would further boost its decarbonisation efforts.

The state government has recently signed contracts for two of the biggest battery storage installations in Australia – the 2,240 MWh Collie battery being built by Neoen – the first stage of which has already been energised – and the nearby 2,000 MWh battery being built by Synergy.

A number of other smaller battery projects are also being built to help solve one of the state grid’s biggest challenges – to soak up excess rooftop solar in the middle of the day and time shift it to the evening peak.

The new tender for 500 MW and 2,000 MWh of battery storage that opens on Monday will have a broader remit

“The procurement of additional storage will be critical for firming wind and solar power during peak demand, complementing existing public and private investment in big batteries in Collie and Kwinana,” Whitby said.

W.A. also released a discussion paper last week proposing higher and longer capacity payments that it hopes will encourage new investment, over and above that sought in the CIS. The state has had relatively few big projects delivered in recent years, with the major roadblock being a lack of transmission capacity and connection delays.

The first tenders held under the CIS have already been overwhelmed by excess capacity. More than 40 GW was registered for the tender for 6 GW of new generation capacity, with 25 GW of capacity making an actual bid, while more than 19 GW of capacity was bid into the 600 MW and 2,400 MWh sought for storage in Victoria and South Australia.

The W.A. storage tender that opens on Monday is reserved for those projects connected to the SWIS and with a minimum size of 30 MW.

There should be no shortage of contenders, with Alinta recently unveiling a plan for a 300 MW, 600 MWh stage two battery at Wagerup, Frontier and Naturgy both proposing solar and battery hybrids, and Atmos Renewables and Sunrise Energy proposing 100 MW batteries (with around four hours of storage) elsewhere in the state.

Further details of the tender are yet to be released, but a webinar will held on Wednesday to provide more information. The winners of this tender are not scheduled to be announced until next March

See Renew Economy’s Big Battery Storage Map of Australia for more information about project locations and progress.