Graph of the Day: The off-take market for big batteries heats up

There is no questioning that battery storage is the most popular, and most successful technology right now in the midst of Australia’s green energy transition.

More than half of the wind and solar farms that won Capacity Investment Scheme agreements (CISAs) in the latest generation tender have a battery on the same connection, and the development of battery storage in general is streaking ahead of large scale wind and solar.

According to ITK’s David Leitch, co-host of Renew Economy’s popular Energy Insiders podcast, the first three tenders of the CIS alone have locked in 8,469 MW of battery capacity with 30,377 MWh of battery storage.

That compares to 6,554 MW of big wind capacity, and 6,461 MW of large scale solar capacity. And those numbers are just for the NEM, they do not include the separate Western Australia grid.

Of course, a CIS underwriting agreement is one thing, and it serves a useful purpose in taking some of the financing risk away and acting as a kind of safety net. The most important thing for big battery project developers, apart from those few prepared to go merchant, is to line up contracts.

And, according to Modo Energy’s Wendel Hortop, these are coming in thick and fast, with 13 seperate offtake deals have been announced in the NEM, from ten different offtakers.

Hortop says these contracts span the four major offtake types: the traditional physical toll, and the newer virtual toll, revenue swap, and firmed PPA.

New players to battery storage, such as the federal government owned Snowy Hydro, have entered the market, although some of the bigger players, such as AGL and EnergyAustralia, have stepped back, perhaps because they have already filled their boots with their own projects and other deals.

Here is a graph from Hortop and Modo illustrating the off-take deals that have been publicly announced.

The BHP deal is interesting, as it is part of a “baseload renewables” contract with Neoen that also includes the Goyder North wind project. Like a similar contract with the Goyder South wind farm and the Blyth battery, it will help power the huge Olympic Dam mine and refinery operations.

Rio Tinto’s is also significant because it is with Edify Energy and will be used to help power its giant smelters and refineries in Gladstone, which it says must switch from coal power to renewables and storage by the end of the decade if they are to have a future.

Origin Energy has also locked in two major contracts with the Supernode battery in the outskirts of Brisbane, destined to the biggest in Australia once the first three stages, which includes another PPA with Stanwell, are completed.

If you wish to support independent media, and accurate information, please consider making a one off donation or becoming a regular supporter of Renew Economy. Your support is invaluable.