The Queensland state government’s clean energy generator CleanCo says it is still in the market for storage projects, despite awarding the entirety of the state’s long awaited RE400 tender to a single wind project with no current storage proposals.
CleanCo’s state government owners announced last week that the entirety of the 400MW in the renewable and storage tender would go to the huge MacIntyre project south west of Warwick which, armed with a 400MW contract for 10 years, and a 103MW wind farm to be built on the same site for CleanCo, will forge ahead to build a 1026MW wind facility, the biggest in Australia.
The MacIntyre project put forward by Spanish renewable energy developer and construction giant Acciona beat nine other proposals in the tender, with all but one of the competitors planning a significant storage component to their wind or solar projects.
RenewEconomy approached CleanCo late last week to ask about the absence of storage, and why the entirety of the auction had been delivered to a single project.
A spokesperson said the company had assessed the RE400 proposals along several dimensions including commerciality, deliverability, and compliance with best practices and procurement principles.
“The MacIntyre precinct could potentially be upgraded with storage in the future, and CleanCo is continuing to evaluate storage opportunities around the state of Queensland,” the spokesperson said.
Indeed, RenewEconomy understands that several projects are in discussion with CleanCo, possibly with a view of helping it meet its mandate of adding a further 1000MW of renewable energy capacity by 2025.
CleanCo also indicated that size did matter in the last auction, and suggested that the opportunity to build its own 103MW wind farm – a project within the project – was too good to refuse as it would be of “significant value” to the state.
“The CleanCo RE400 offtake enabled ACCIONA to scale up the project from around 580MW to 1026MW, greatly improving the commercial proposition for CleanCo and increasing new renewable generation for Queensland,” the spokesperson said.
“The MacIntyre precinct is well located, connected to the grid, and is advanced in terms of its maturity relative to other wind projects in the state — so it is a good choice for CleanCo to participate as both an owner and an offtaker,” the spokesperson said.
Price is considered to be one significant factor, as well as the relative value of a large wind farm in a state with a huge amount of rooftop solar and utility-scale solar.
Energy minister Anthony Lynham has previously boasted he could buy wind energy at around $44/MWh, and the futures market is betting on a wholesale price of around $50/MWh in 2022, indicating that the MacIntyre contract is likely to have been delivered under that price and likely the cheapest PPA to date in Australia.
CleanCo’s portfolio currently comprises “dispatchable” generators such as the Kareeya and Barron Gorge hydro plants in the north of the state, now playing a critical role in whether two solar farms and a wind farm affected by modelled “system strength” issues get to generate, along with the Wivenhoe pumped hydro facility and the Swanbank E gas generator.
Asked about this, the CleanCo spokesperson said: “The pricing was such that we assessed this as a commercial and attractive project delivering good value for Queensland.”
Acciona Australia boss Brett Wickham told RenewEconomy in an interview on the popular Energy Insiders podcast that battery storage was a possibility at MacIntyre, but right now he struggled to understand the commercial opportunities for battery storage at such scale, given that the FCAS market was not big, and the markets for storage not developed.
Acciona is to install an 8MWh battery at its South Mortlake wind farm in Victoria, currently under construction, which it will use to test the market.
“We are looking to use that as a bit of a learning tool for us, learn how to operate the batteries, how to dispatch and charge the batteries,” Wickham told the podcast.
“All our projects going forward we will seek planning for batteries to be included. We are moving towards hybrid projects, which is wind, PV and battery, it’s the way of the future and enable us to provide firmer renewables.
“I’m just not sure our regulatory framework at the moment has grappled enough with batteries. Prices are coming down, but I think we are still a way off.”
Queensland is not short of dispatchable generation, with a large fleet of coal and gas generators, the Wivenhoe pumped hydro storage plant (operated by CleanCo), and a new 100MW/150MWh battery proposed by AGL for the huge Wandoan solar farm.
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