The ACT government has selected Macquarie Group’s newly formed global battery group Eku Energy to build one of the largest big batteries in the country in the national capital, and featuring an innovative although secretive financing deal.
The ACT has already reached the equivalent of “net 100 per cent” renewables through a series of long term contracts with wind and solar farms, and is now seeking to boost that renewable share to power electric cars and electric homes, and to balance that with plenty of storage.
The Big Canberra Battery will be sized at 250MW and 500MWh, or two hours of storage. If built now, it would be the biggest in the country, but by the time it is delivered – in late 2025 – it will likely be bested by other battery installations such as the massive 1690MWh Waratah “super” battery in NSW.
The new battery will be located in Williamsdale and its focus will be on supporting the grid during network outages, particularly in peak periods, and to help prevent blackouts and fill in the gaps of wind and solar supply.
It will be able to store enough renewable energy to power one-third of Canberra for two hours during peak demand periods.
The big battery contract is another coup for the newly formed Eku Energy, which only just received its FIRB approval last week, but will inherit other Macquarie and Green Investment Group battery assets, including the big Hazelwood and Rangebank battery projects in Victoria.
True to Macquarie form, Eku has proposed an innovative financing deal with the ACT government for the battery.
It will receive quarterly payments over 15 years, not to deliver any specific grid services like those contracts awarded to the Victoria Big Battery, the Waratah “super” battery and others, but to deliver guaranteed revenue to help lower the cost of capital.
In return, Eku has promised greater rewards to the ACT government over the longer term by sharing the revenue from the merchant operations of the battery in the market.
Unlike the transparency that featured in the ACT’s long term contracts with wind and solar farms, the details of the quarterly payments for the new big battery have not been released and chief minister Andrew Barr said they remain commercial in confidence.
“This procurement has implications for our future procurements, and for (Eku Energy) and their future procurements, but effectively, yes, there is a revenue risk sharing element here,” Barr told reporters. He said, however, it should deliver “net positive value” to the territory.
The Big Canberra Battery is one of three big batteries that are either operating, under construction or about to be built in the ACT. The 10MW/20MWh Queenbeyan battery owned by GPG is already operating, while the 100MW/200MWh Capital battery owned by Neoen (pictured above) is nearing completion.
The Big Canberra Battery is expected to cost between $300 and $400 million and will be developed, built, and operated by Eku Energy, which beat more than 40 other parties in the tender conducted by the ACT government. Construction will start in late 2024 with completion expected in 2025.
The ACT had intended to create a “network” of battery storage through the tender but has chosen instead to go with one big installation.
The announcement of the Big Canberra Battery means that the ACT will have already delivered its target of 250MW from its new Canberra battery “ecosystem”, but it is understood it will go ahead and provide incentives for more batteries, with the likely focus on neighbourhood and other small installations.
“When I first announced the Big Canberra Battery project we had three objectives in mind; grow jobs in our renewable energy sector, create a meaningful revenue stream for the Territory and improve energy security for Canberrans – this contract delivers on all three of those objectives,” chief minister Andrew Barr said in a statement.
“As a combined network, this battery ecosystem can address network constraints, enable more Canberrans to reap solar benefits and present the opportunity for the Territory to reduce costs and generate revenue.
“The ACT has delivered 100% renewable electricity since 2020, and initiatives like this build on that achievement and demonstrate the viability of renewable energy in supporting a robust, affordable, and sustainable energy grid.”
Daniel Burrows, the head of Eku Energy in the Asia Pacific and chief investment officer, said the company is accelerating its deployment of battery assets in Australia now it has been fully incorporated into the global operations of the company.
“The Big Canberra Battery represents a significant milestone for Eku Energy as we celebrate our first GWh of battery energy storage in delivery in Australia,” he said in a statement.
“This brings our global portfolio of battery energy storage assets to over 4GWh.” Eku has yet to choose a battery provider for the Canberra project and Burrows said the finance and revenue sharing deal could be replicated with other battery storage projects.
See RenewEconomy’s Big Battery Storage Map of Australia
