Blacked out: Contract for “world’s most powerful battery” to be kept secret for now

The money to be paid by the NSW government to the Waratah super battery, dubbed the world’s most poweful, is to be kept secret – at least for now – after the Australian Energy Regulator agreed to black out the details.

The Waratah “super battery” has been commissioned by the NSW government as part of its response to the early closure of the country’s biggest coal generator, the 2.8GW Eraring facility that is now scheduled to shut in 2025.

The battery is designed to act as a sort of giant “shock absorber”, allowing more electricity to be funnelled into the major load centres of Sydney and Newcastle, and in that way will have a similar role to the Victoria Big Battery and the original “Tesla big battery” at Hornsdale in South Australia.

But the scale of the Waratah battery is several times bigger than the ones that preceded it, and the contract could be worth around $200-$300 million – or even more – over a five and a half year period.

A tender for the battery was awarded to the newly established Akaysha Energy, a surprise winner given it has not yet built its first big battery, even though it has big plans and the backing of the US funds management giant BlackRock.

The Waratah super battery – to be built at the site of the shuttered Munmorah coal plant will have a total capacity of 850MW/1,680MWh. Up to 700MW/1400MWh will be reserved for the System Integrity Protection Scheme (SIPS) contract to be operated by transmission company Transgrid.

The AER report says it is satisfied that there was a “genuine and appropriate” competitive process, which evaluated 27 expressions of interest in full, before whittling the contenders down to just two. But is not happy that the payment details have not being released. All have been blacked out.

“The AER strongly believes that consumers should be informed of the costs and benefits of network infrastructure projects that they are ultimately required to pay for,” it says.

“We consider that there is a discipline that transparency imposes and that NSW electricity consumers expect our determinations to provide this transparency for all contestable and non-contestable network infrastructure projects.”

The Hornsdale battery, for instance, is paid $4 million a year for its services – including the SIPS contract – while the Victoria Big Battery is getting $12.4 million a year, for a 250MW/125MWh component, and just for the summer months (December to end of March). Both batteries are owned by Neoen Australia.

if the Waratah battery receives a similar sum to the Victoria Big Battery then it could receive more than $500 million over the course of the contract.

One reason it might be less is that the Waratah contract is based on a “seasonal sculpted” core service, which requires different capacity at different times of the day.

In the summer months, it will reserve at least 700MW and 1400MWh of battery capacity for the SIPS Service between 5am and sunset, when power system demand and paired generation availability levels are relatively high.

The AER says it expects that at least the aggregate and total payments for the battery SIPS services, and the “paired generation” that will be subject to another auction in 2023, will ultimately be revealed.

“For this determination we have agreed to redact the total and annual amounts in the public version of the determination on the basis that we will publish the aggregate total and annual amounts payable for the SIPS Service and Paired Generation Services once we have made our determination for Paired Generation Services,” it said.