Delays at Australia’s most powerful battery lead to a more than $90 million cut in payments

Delays to the start of Australia’s most powerful battery – the Waratah Super Battery on the central coast of NSW – have already resulted in a more than $90 million cut in payments from its contracted role as a giant “shock absorber” to the grid.

The Waratah battery, at its full capacity of 850 megawatts (MW) and 1680 megawatt hours (MWh), will be the most powerful battery in the country, and likely the world, and will also be the most powerful machine ever to be connected to the Australian grid.

The battery itself has been built, and is partially operating, but a “catastrophic” failure at one of its transformers late last year means it is only running at about half of its finally capacity, and won’t be fully commissioned until the end of the year, all going well.

Construction of the project had already been delayed by a combination of bad weather and other complications, according to its owner Akaysha Energy, which caused it to miss its original starting date of May, 2025. That meant it could not start to deliver on its role as a kind of giant “shock absorber” to the grid until later that year.

The financial impact of those delays have now been revealed by the Australian Energy Regulator, which must approve the payments made by regulated network operator Transgrid to the Waratah battery and other components of the System Integrity Protection Scheme (SIPS),

In a filing late Friday, the AER revealed that the total payments to be made to Waratah, and the group of wind, solar and hydro generators that are paired with it as part of the SIPS service, would be cut by $90 million, reducing the total payments to be made over the 5 1/2 year contract to $512.6 million.

The breakdown of the payments between Waratah and the paired generators is not spelled out, but it is reasonable to assume that Waratah accounts for the bulk of the payments since its role is to set aside much of its capacity at at certain times each day so it can be on standby for the grid.

This allows the transmission lines feeding into the major load centres in Sydney, Newcastle and Wollongong to run at greater capacity, knowing there is a backstop, or shock absorber, to respond if anything went wrong.

The paired generators – Metz solar farm, Sapphire wind farm, Tumut hydro and the recently added White Rock wind farm – are called on in case of an incident and if they are required to offset an injection of power by the battery.

The AER has blacked out the payment adjustments for the 2025/26 and 26/27 financial years – due to issues of commercial in confidence – but highlighted the other years and the grand total.

“The net outcome of these contestable adjustments is a reduction in the cost of the contestable components of more than $90 million relative to the cost set out in our initial contestable revenue determinations,” the AER said in its update.

“The reduction is predominantly due to the delay in the operation of the battery service.”

Transgrid filed its first notice of delay in March last year, because of the bad weather, and adjustments were made then. Waratah began its interim SIPS in August, operating at 350 MW and 700 MWh, and was about to move to full capacity before the transformer incident in October.

A revenue adjustment was made at the time, but the quantum was not revealed. Transgrid formally notified the AER of the latest revenue adjustment proposal on March 31 this year, after receiving formal advice on the new timing schedule from Akaysha on February 18.

The delays are unlikely to have a significant impact on the running of the grid, given that the Eraring coal generator it was designed to help replace, and which was due to close in August last year, will now be operating until April, 2029.

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