Lyon teams with Fluence, JERA to pursue big solar and battery storage

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Lyon Infrastructure teams with two major international energy and storage groups to pursue its portfolio of solar and battery projects in Australia, and others overseas.

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Ambitious solar and storage project developer Lyon Infrastructure has teamed up with two major international energy and battery storage groups to pursue its portfolio of projects in Australia, and others overseas.

In joint announcement on Tuesday, Lyon says it has signed a “collaboration” agreement with Japan’s JERA and US-based Fluence to “identify and pursue utility-scale battery storage development and investment opportunities in Asia-Pacific markets.”

The agreement may provide renewed momentum for Lyon’s list of major solar and storage projects, which have attracted big headlines and publicity, but are yet to advance to contracting, financial close, or construction.

The three Australian projects flagged in this deal were due to begin construction in 2017 (see table below) and executive chairman David Lyon still promises that an announcement for a start in the first of those will be made in the first “within a few months”.

A legal battle with US solar giant First Solar over the details of one of Lyon’s projects appeared to take the wind out of its sails late last year.

But while the legal dispute is ongoing, Lyon’s David Green told RenewEconomy he is confident the company can move forward and it will not impact its projects.

Both JERA and Fluence are joint ventures created by some of the biggest energy players in the world.

JERA is joint venture of two major Japanese electricity companies, TEPCO Fuel & Power Inc and Chubu Electric Power Co, while Fluence is an equal joint venture of Siemens and AES that focuses on battery storage.

Together, the three groups say they will look at utility and industrial scale battery storage solutions in new projects and at existing renewable and thermal generation plants.

Lyon would be the project developer, JERA an investor, and Fluence the energy storage solution and service provider.

Top of the list in Australia are three long talked about projects that Lyon has been developing, and was talking about a year ago as on the point of development:

  • Cape York, Queensland (55MW solar + 20MW/80MWh storage)
  • Nowingi, Victoria (253 MW + 80MW/320MWh)
  • Riverland, South Australia (253MW + 100MW/400MWh) (up to 330MW solar including stage 2)

“This collaboration agreement is based on a shared understanding that the world requires low emissions energy systems that are also secure, reliable and affordable,” Green says in a statement.

“Utility-scale battery storage solutions across new and existing generation plants will be a key enabler.”

Lyon had previously identified AES, now part of the Fluence joint venture, as its battery partner, and Fluence is already building one large-scale battery storage project in Victoria, a 30MW/30MWh installation at a network terminal in Ballarat.

Its Asia-Pacific representative Mark Leslie was featured in a recent Energy Insiders podcast published on this web-site.

Fluence says that the combination of solar and storage as envisioned in Cape York, Nowringi and Riverland, will provide lower-cost energy, improve reliability on regional electric grids and eliminate the need for expensive and under-utilised assets such as peaking gas plants.

“Australia is working to solve difficult ‘grid-in-transition’ issues at scale as they usher in the next generation electricity network that is cleaner, lower cost, and more reliable,” said Jan Teichmann, VP of Global Markets for Fluence in a statement.

“Fluence is the most experienced global energy storage supplier and is excited to help JERA and Lyon bring their energy storage projects to life in Australia, Japan, and throughout the Asia Pacific region.”

Green says Lyon still intends to move forward with four-hours of storage in the Australian projects, and says the delays in the projects had been due to challenges in modelling and connection agreements.

It should be said that such difficulties also caused delays in the announcements and completion of other storage projects in Victoria and in South Australia at Wattle Point.

The Tesla big battery in Hornsdale stands unique for its punctuality, driven by Elon Musk’s promise of delivering the world’s biggest lithium ion battery within 100 days “or it’s free”, and the needs of the market operator and the then state government.

Green says Lyon is discussing power purchase agreements and is “quite close in pricing” with several parties.

JERA is expected to be an investor in the projects, but Green also said that  “couple of other parties” were also interested in investing in the projects.

“Lyon’s tranche 1 projects will include four-hour Fluence battery storage systems and are scheduled to commence construction in the coming months,” the company statement says.

“This collaboration agreement positions Lyon, JERA and Fluence to lead the world in the deployment and use of utility and industrial scale battery storage.”

John Zahurancik, Fluence’s chief operating officer, told RenewEconomy in a phone interview from his base in Virginia, that the agreement shows the partnership with Lyon is moving ahead, and reinforced with the addition of JERA a a financing partners.based in Virginia.

Zahurancik said that four hours of storage was looking to be sweet spot for the combination of renewables and batteries, because of the ability to time shift the output of wind and solar, and to provide firming capacity.

“A lot of batteries have been aimed at grid reliability,” Zahurancik said.

“These (battery projects) will be able to do that, and provide firm peak capcity, off peak capacity, and shoulder periods during the day when the sun is coming up or going down.”

Is the economics there yet?

“We are finding that this combination is what is needed in the market. There is a greater need for flexibility and peak capacity – we are seeing this in Australia and in other parts of the world that are moving towards, 3, 4, 5 hours of storage.”

In a separate statement, JERA described the agreement as a “Memorandum of Understanding creating a framework for strategic development among the parties of the energy storage business for the Asia-Pacific region.”

It says all three parties understand that a low emission energy system will be at the heart of the sustainable future.

“To realize such future, the parties will work together utilizing each party’s strength to develop commercial models and potential applications to utilize utility-scale battery storage solutions,” it says.

“JERA believes that energy storage systems help to achieve a sustainable energy system and expand JERA’s renewable power business.”

 

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