Genex strikes “world first” revenue sharing deal with Tesla for Queensland big battery

Listed renewable and storage developer Genex has struck a “world first” revenue deal with Tesla for its Bouldercombe big battery in Queensland, which will feature Tesla Megapacks and Tesla’s Autobidder technology.

The deal acts as a sort of off-take deal for the battery, providing a minimum amount of contracted revenue that will enable Genex to lock in finance for the 50MW/100MWh battery project near Rockhampton.

Genex is already building the massive Kidston pumped hydro project in north Queensland, and operates the 50MW Kidston solar farm and the 50MW Jemalong solar farm in NSW.

Bouldcercombe is its first battery investment, and the second big battery in Queensland after the Wandoan project that is currently being commissioned.

The decision to use Tesla Megapacks was announced in October, and Genex says the new eight-year revenue sharing deal will provide a guaranteed fixed amount and also the possibility of sharing in “revenue upside” from significant pricing events in wholesale electricity and FCAS markets.

“The unique integration of Tesla Megapack and revenue support arrangements via Autobidder for the BPP reduces the Project’s complexity by effectively streamlining the development, construction and operations phases at BBP,” the company said in statement.

Tesla will operate the BBP using its proprietary algorithm-based bidding system, Autobidder, for a period of eight years, after which Genex will enter into a license agreement with Tesla to operate Autobidder on the project.

It is common for a battery storage developer to lease out its battery to a third party to operate. This is the business model for the Gannawarra, Ballarat, Dalrymple, Wallgrove and Wandoan batteries. But this is the first case we know of where the arrangement is struck with the battery technology provider.

Genex says one of the key attractions of the deal is that their interests are aligned, and both Genex and Tesla are interested in maximising the revenue from the battery. That’s not always the case with some off-take with big utilities, who have their whole portfolio to consider.

“We have a strong mutual interest in maximising the revenues from the plant,” Genex director Simon Kidston told RenewEconomy.

The Bouldercombe battery will feature 40 Tesla Megapacks, the same technology used at the newly opened, but much larger, Victorian Big Battery (300MW, 450MWh), and the soon to be complete 50MW/75MWh Wallgrove big battery in western Sydney.

“The Bouldercombe Battery Project is set to be one of the first standalone large-scale battery energy storage systems in Queensland,” Genex CEO James Harding said in a statement.

“The unique integration of Tesla’s Megapack battery technology and a revenue sharing arrangement utilising Autobidder will reduce the complexity of the project.

“Importantly the structure of the Agreement provides a minimum level of contracted revenues to support project funding, while allowing Genex to retain significant merchant upside.”

The Bouldercombe battery is expected to start operation in early 2023.

See also RenewEconomy’s Big Battery Storage Map of Australia