The South Australia government has announced that its 100MW battery storage tender – which it says is the world’s largest – has been won by Tesla and French renewable energy developer Neoen.
The 100MW/129MWh battery bank will be built at Neoen’s huge Hornsdale wind complex near Jamestown, where the last stage of a 309MW project is currently being completed.
Premier Jay Weatherill said the Hornsdale Power Reserve will become the state’s largest renewable generator, and while the lithium battery would be the biggest in the world.
“South Australian customers will be the first to benefit from this technology which will demonstrate that large-scale battery storage is both possible and now, commercially viable.”
The announcement was made jointly with Tesla founder and CEO Elon Musk, who flew into Adelaide for the announcement. Musk said the installation would be three times bigger than the next installation.
“This is a chance to show you can really do a heavy duty, large-scale utility battery and battery system, and South Australia was up to the challenge. If South Australia is willing to take a big risk then so are we,” he said.
Financial details of the bid were not revealed, but Neoen deputy CEO Romain Desrousseaux said the company had been “aggressive and very positive” in its bid with Tesla. He told RenewEconomy Neoen would provide all the equity for the project, and then seek bank finance once it was up and running.
“There was no time to talk to the banks,” he said. “What we are showing today is that this is only the beginning for more renewables. Everyone wil be looking at South Australia, hoping to replicate this at other projects. We hope to replicate it at many other projects.”
The addition of the storage facility at the biggest wind farm in the state will add to the state’s energy security – providing quick reactive power in the events of faults, and smoothing the output of wind – it will also add much needed competition into the state’s energy market.
The arrival of a “dispatchable” renewable energy generator means that prices will no longer be controlled only by a handful of gas-fired generators, who have been largely responsible for the state’s soaring gas prices. It will also likely mean new rules that threaten to restrict wind output will also be dropped.
The tender was flagged earlier this year after the series of blackouts and load-shedding that afflicted the state following a series of extreme weather events and equipment failures, and after a billionaire tweet exchanged prompted by Tesla’s claim to be able to fix the problem in 100 days.
It is the largest battery storage tender in the country, although Victoria is also seeking proposals for two 20MW battery storage facilities with up to 100MWh of storage, and a 20MW/34MWh storage facility will be built alongside a 196MW wind farm powering the Nectar Farms glasshouse facility near Stawell.
Other governments are also looking at battery storage, including Queensland which has flagged it as part of a 400MW tender for new renewable energy projects, and the Northern Territory last month allocated a tender for a 5MW battery storage facility to Vector Energy, using LG Chem.
During the billionaire tweets between Musk and Australia’s Mike Cannon-Brookes, Musk promised that if the facility was not built in 100 days, it would be done for free. That offer still stands.
“It has been agreed between Tesla and the South Australian Government that the starting date for the 100 days will be once the grid interconnection agreement has been signed,” Weatherill’s statement said.
“After leading the nation in renewable energy, the 100MW / 129MWh battery places South Australia at the forefront of global energy storage technology.”
The battery will operate at all times providing stability services for renewable energy, and will be available to provide emergency back-up power if a shortfall in energy is predicted.
Weatherill said Neoen was selected on a merit basis after a multi-stage procurement process attracted around 90 responses to the Expression of Interest, with 14 proponents invited to supply, and 5 shortlisted for detailed assessment.
Those that expressed interest are believed to have included all the leading battery storage manufacturers, including LG Chem, AES, Kokam, and others, and developers such as Zen Energy, Carnegie Clean Energy and AGL Energy.
Weatherill said the consortium “provided a highly competitive commercial offer with the best value for money” although details were not immediately available.
“Neoen and Tesla have a track record in comparable scale projects, and are committed to deliver on time at the lowest cost with a suite of value-adding initiatives,” the statement said.
“I’m thrilled with the selection of Neoen and Tesla, whose experience and world leadership in energy security and renewables will help South Australia take charge of its energy future,” Weatherill said.
Neon’s Desrousseaux said the Hornsdale Power Reserve will become home to the largest lithium ion battery in the world, and would take the company’s long-term, direct investment in South Australia to almost $1 billion since 2013.
The company also recently announced that 196MW wind project and 20MW/34MWH battery storage installation in Stawell in western Victoria to power the country’s biggest glass-house for vegetable growing and supply the grid. (That $563 million project has been ignored by most mainstream media).
The company has also been an aggressive bidder in Australia, winning contracts for all three stages of its Hornsdale wind farm from the ACT government, under its 100 per cent renewable energy target, and three solar farms in NSW in the ARENA large scale solar tender.
Desrousseaux said the battery storage technology will demonstrate that large-scale battery storage is both possible and now, commercially viable.
“Together, the South Australian Government, Neoen and Tesla will demonstrate that renewables can provide dependable, distributable power that will turn a new page in Australia’s energy future.”
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