The NSW state government has launched a new tender for long duration storage – it’s fourth to date – with the latest focused specifically at ensuring that enough capacity is available for when the last of the state’s coal fired generators are due to retire in ten years time.
The new tender will seek projects with a total of 1 gigawatt (GW) of capacity and at least eight hours of storage, and which can be completed by 2034 – a timeline that will accommodate pumped hydro projects that typically take longer to build.
NSW has the country’s biggest fleet of operating coal generators, but these are all expected to retire within the next decade, starting off with the country’s biggest at Eraring, possibly in August, 2027, followed by Vales Point, Bayswater and Mt Piper.
The state has estimated it needs 2 gigawatts and 16 gigawatt hours of long duration storage capacity by 2030, and a total of 28 GWh by 2034. The latest tender to be managed by AEMO Services will deliver at least another 8 GWh, perhaps more if pumped hydro wins a spot, on top of the 18 GWh already secured.
The state’s tenders for long duration storage have had mixed results so far. The first – announced in April, 2023 – awarded an underwriting agreement to a single project, RWE’s 50 MW, 400 MWh battery at Limondale that was a landmark nonetheless because it was the first eight-hour battery project in the country.
The next tender in late 2023 awarded contracts to two more eight hour battery projects – Lightsource’s Goulburn River (49 MW and 392 MWh) and Ark Energy’s Richmond Valley (275 MW, 2200 MWh) – and also to Hydrostor’s first of its kind advanced compressed air storage project at Broken Hill (200 MW and 1600 MWh).
The third tender for long duration storage awarded contracts to another two eight hour batteries – Enervest’s Stoney Creek (125 MW, 1,000 MWh) and Eku’ Griffith (100 MW, 800 MWh) – but also finally landed a pumped hydro project, the 800 MW, 11,900 MWh Phoenix project proposed by Acen Renewables.
There are a number of pumped hydro projects developers still hopeful of securing government mandates or underwriting agreements, and AGL this week bought two potential pumped hydro projects from a private company owned by former prime minister Malcolm Turnbull and his wife Lucy.
Pumped hydro, however, has been hard to do, mostly because of the rise in civil construction costs – as the experience with Snowy 2.0 underlines. And the timelines in the federal Capacity Investment Scheme, which wants projects up by 2030, has all but ruled them out.
AEMO Services says projects in the new tender – to be known as Tender 6 (there have been several generation only tenders in between) – will be limited to those in renewable energy zones, or able to access existing infrastructure.
“To be eligible for this tender, projects must have the ability to dispatch at their registered capacity for a minimum of eight hours,” it says.
Executive general manager Nevenka Codevelle says the success of the recent Tender 5 for long duration storage projects, which were announced in February and included that first pumped hydro project, would serve as a running start for the next round.
“Tender 5 was the most successful long duration storage tender to date. It demonstrates the strong market interest to invest in long duration storage projects and we’re excited to see more in Tender 6.”
The announcement of the new tender completes a busy week for the NSW government, coming after the winners of grid access rights to the country’s first renewable energy zone, Central West Orana, were revealed earlier this week.
That tender included 10 projects, including three battery projects co located with proposed solar farms, and a solar battery hybrid. That included more than 5,000 MWh of battery storage in total, but mostly four hours or less to deal with intraday or day to day needs.
Long duration storage targets multi-day and seasonal variations in the output of wind and solar.
Project bids for the new tender will close on June 10.
“AEMO Services uses a two-stage tender process that assesses a project’s social licence commitments, deliverability, impact on the grid and quality of proponent,” Codeville says. “The second assesses a project’s financial value to NSW electricity consumers.
“We want to see more short lead time projects that contribute to our 2030 minimum objective. With the recent addition of a new minimum objective of at least 28 GWh by 2034, we are now able to support projects with a longer lead time that will come online in the next decade.”
AEMO Services says it has already supported projects expected to contribute more than 2.4 GW of generation, 18 GWh of long duration storage and almost 3 GWh of firming capacity to NSW’s energy grid.
