Spanish energy giant Iberdrola says it is making a half billion investment in a four hour battery project in South Australia, as it focuses a sizeable war chest on battery storage in this country.
Iberdrola announced on Thursday that it is buying the Tungkillo battery project from RES Australia in what it says “will involve an investment of” 275 million euros ($A495 million).
The 270 megawatt (MW), 1,080 megawatt hour (MWh) project comes with key planning approvals but no grid connection as yet, and it’s expected to be online in 2028.
Iberdrola says it plans to invest 1 billion euros ($A1.7 billion) in Australia until 2028, following the release of its new global strategy, which focuses mostly on network investments in the US and the UK.
Iberdrola Australia will mostly focus that cash on battery storage, it revealed to Renew Economy last week.
Tungkillo will bring the number of Australian battery projects in Iberdrola’s development orbit, be they developed or owned by the Spanish company, to 12. These total 5,055 MW and 9,045 MWh, according to data from RenewMap.
It already operates the Lake Bonney battery next to its wind farm, and the 65 MW, 130 MWh Smithfield battery is now operating next to an existing gas power plant in NSW. The two hour Broadsound battery, which is co-located with solar, in Queensland is the next to shift into operations with a plan for it to be on the grid next year.
Iberdrola says Tungkillo, which is next to the proposed 288 MW Palmer wind project and east of Adelaide, will be used to integrate new renewable capacity in the state and provide added flexibility for the National Energy Market (NEM).
For Iberdrola itself, Tungkillo and its other batteries are providing backup capacity for its portfolio of energy sales contracts to customers.
Globally, Iberdrola is planning to spend 58 billion euros on network investments in the UK and the US, and has been selling off assets in some jurisdictions that have been deemed not core to a strategy of choosing locations come “with an A rating equipped with stable, predictable and attractive regulatory frameworks.”
It’s also keen to get into the network business in Australia, which until New South Wales (NSW) set up its renewable energy zones, has been carved out for non-generator monopolies only.
Iberdrola is leading a consortium pitching to become the network operator for the proposed New England Renewable Energy Zone (REZ) in northern NSW, and is reportedly involved in a bid for the $4 billion VNI West transmission line linking NSW and Victoria.
