(Updating with new information from government on battery sizes).
Six new big battery projects – two in Victoria and four in South Australia – have been named as the winners of the federal government’s first test of its Capacity Investment Scheme, its flagship policy to propel the country towards its 2030 renewable energy target.
The projects, which include one of the biggest batteries to be built in Australia in the heart of the Latrobe Valley, will deliver more than 1,000 megawatts of capacity and significantly more than the 600 MW sought in the pilot tender.
It is a promising result to the first tender in the CIS program, which will seek a total of 23 gigawatts (GW) of new wind and solar and 9,000 MW of battery storage over the coming years to take the country close to its target of 82 per cent renewables by 2030.
The winners will be announced by federal energy and climate minister Chris Bowen at a conference in Gippsland on Wednesday, and the biggest of them all is located in that region, the 350 MW, 1,400 MWh Wooreen battery to be built by energy giant EnergyAustralia just outside of Morwell.
The other winner in Victoria is the 115 MW, 230 MWh Springvale Energy Hub, which will be built by Progress Power on a former landfill site in south-eastern Melbourne, and which is looking to add a major EV charging precinct and a second stage battery. Both Victorian batteries will be on line in 2027.
EnergyAustralia was also successful with another battery project in South Australia, a 50 MW, 200 MWh battery it will build near the Hallett wind farms near Canownie, while Pacific Blue, which used to be known as Pacific Hydro, has already begun building the 60 MW, 143 MWh battery next to its Clements Gap wind farm in the mid-north.
The other winners in South Australia are Zen Energy’s Solar River hybrid project, which will feature a 170 MW /653 MWh battery paired with a 230 MW solar farm, for a combined export capacity of 256 MW. That is located between Burra and Morgan.
There is also the 250 MW, 1,000 MWh Limestone Coast battery, proposed by Pacific Green near the border with Victoria, and which will be the biggest in the state. It will mean South Australia will have at least 11 operating big batteries in the state by that time. It currently has four, with another three under construction or commissioning.
Bowen says the market response to the pilot tender was huge, with 19 gigawatts of projects – 32 times more than was originally sought – being offered. The winning projects will soak up “cheap, clean energy from renewable generation” and will be discharged back into the grid as needed.
“This was a pilot auction for the broader scheme. And that pilot has been very successful,” Bowen says, according to an excerpt of the speech released by his office ahead of time.
“Today I’m pleased to announce the six very high-quality battery projects that have been successful. They will deliver nearly 1000MW of storage by 2027. That is considerably more than the 600MW we went out to tender for.
“We are able to over-deliver on our promise because of the high quality of bids received. This is a huge indication of the strength and quality of the projects underpinning our transition, that are ready to be delivered now.”
However, Bowen said the price was not the only criteria for the selection.
“These projects will improve reliability, put downward pressure on electricity prices, and help us move to a net zero economy,” Bowen says.
“But they also deliver major benefits to their local communities. Importantly, those benefits will start flowing now, not in twenty years’ time.
“This is a key feature of how we’ve designed the reliable renewables plan. We aren’t looking for the cheapest projects. We are looking for projects that transform the electricity sector and transform local communities.”
The CIS provides a sort of underwriting agreement which guarantees minimum revenue for the projects, which helps them secure cheaper finance, and requires them to share a portion of any excess profits with the government.
It’s a model that is being used in NSW, and is also being rolled out in Western Australia. It is not yet known if prices will be revealed.
Battery storage, along with rooftop solar, has been the strong point of the energy transition, but the real test will be in the government’s ability to jump start the rollout of wind and solar, which has been largely stalled as a result of planning, supply chain, labour and connection issues, and because the industry has been waiting for the CIS to start.
“This transition is going to happen: the climate demands it, and economic reality demands it,” Bowen says.
“But will it be orderly or disorderly? My goal since becoming Minister has been to make the transition faster and more orderly.
“The key to an orderly transition is certainty. This region needs jobs. Jobs need investment. Investment needs certainty. It’s a simple as that. Our policies are designed to create that certainty. Certainty as to our destination. And certainty as to our road map to get there.”
Battery storage has been the go-to technology for investment in the past two years, supported by a range of government and agency programs designed to boost grid capacity, essential services, and to test the technologies that will be required to phase out coal and gas.
The success of the tender will be particularly satisfying for EnergyAustralia, which made clear its hopes of securing contracts for the Woreen and Hallett batteries earlier this year.
They will be the first battery projects the company builds, although it also has off-take and operating agreements for batteries such as the Gannawarra and Ballarat batteries in Victoria and the Darlington and Riverina batteries in NSW, as well as the Kidson pumped hydro plant in Queensland that is still being built.
It has also signed a 12-year ‘virtual toll’ offtake agreement with Akaysha Energy for its huge Orana battery in NSW, and is proposing a big battery at the site of its Mt Piper coal plant in NSW, and a pumped hydro project in the nearby Lake Lyell.
The Hallett battery, which has already begun construction, may be scaled up to 200 MW and 800 MWh at a later date, and the Limestone battery in the same state has planning approval for up to 500 MW and 1500 MWh.
South Australia, which already runs at more than 70 per cent wind and solar, is legislating to lock in its target of 100 per cent net renewables by 2027, which will require considerably more storage than it has now.
“It was a South Australian Labor Government that was at the forefront of bringing grid-scale batteries into the electricity system,” said state energy minister Tom Koutsantonis.
“This template is now being keenly taken up around the world with the recognition that renewable energy, when firmed with batteries, can provide greater reliability and flexibility than once thought possible.
“The system we pioneered continues to set records and break barriers. We are seeing batteries proposed that may have substantially larger storage capacity, longer duration, or both.”
Bowen, meanwhile, used the speech to renew his attack on the federal Coalition’s nuclear policy, and its determination to slow down or even block new investment in wind, solar and storage.
“The Liberal Party and National Party say they want to stop renewable energy investments and stop offshore wind,” Bowen says.
“They want to stop investment, stop jobs, and stop benefits in favour of waiting for a nuclear fantasy that may never come true.”
For more information about big battery projects see Renew Economy’s Big Battery Storage Map of Australia.
