The federal government owned Snowy Hydro has finally signed its first ever deal for a big battery, and in doing so has agreed to the biggest “virtual tolling agreement” yet seen in Australia.
Snowy Hydro announced on Wednesday that the tolling deal has been signed for the proposed new Elaine battery in Victoria, which is to be built by Akaysha Energy at a scale of 311 megawatts (MW) and 1,244 megawatt hours (MWh).
The virtual tolling agreement relates to 220 MW of that capacity, and will last for 15 years. It is Snowy Hydro’s first battery offtake agreement, and Akaysha says it is the largest four-hour virtual toll arrangement in the Australian market, setting a precedent for the sector.
Construction of the Elaine battery is expected to start this month. Akaysha is already commissioning the country’s most powerful battery, the 850 MW, 1680 MWh Waratah Super battery in NSW, and is putting the finishing touches on the Brendale and Ulinda Park batteries in Queensland, and is also building the Orana battery in NSW.
Dennis Barnes, the CEO of Snowy Hydro, noted that the company has previously looked to its hydro and pumped hydro assets, and its peaking thermal assets, to support wind and solar across the grid.
“This deal with Akaysha adds a new short-duration storage layer to our portfolio, which will work hand-in-hand with the long-duration storage capabilities of our pumped hydro assets,” he said in a statement.
It is understood that Snowy Hydro has been working on a battery deal for some years, but has struggled to find the right arrangement that fits in with its other firming assets, such as the hydro and peaking plants.
Under virtual tolling agreements, the buyer has the right to notionally charge and discharge a ‘virtual battery’ as if it owned or operated the physical battery itself. The battery is actually operated and discharged by the battery owner, so its effectively a financial rather than a physical contract.
Akaysha says the 15-year deal with Snowy Hydro for Elaine sets a “new benchmark” for investment-grade battery contracts in Australia. It follows a previous virtual tolling agreement signed in August, 2024, with EnergyAustralia – a 12-year, 200 MW offtake for its 415 MW, 1660 MWh Orana BESS.
Akaysha Energy also announced a long-term battery revenue swap agreement with trading hour Gunvor for the Brendale battery, and had previously sealed the first battery revenue swap agreement with Re2 Capital for the 155 MW, 310 MWh Ulinda Park battery.
“This agreement represents a step change in the way large-scale storage can be delivered to the market and showcases strong market confidence in the value of BESS as a long-term energy solution,” said Paul Curnow, the managing director and chief commercial officer at Akaysha Energy.
“By partnering with Snowy Hydro, we’re demonstrating how flexible, long-term virtual offtake arrangements can unlock major battery projects and deliver value in the wholesale energy market.”
Akaysha now has total contracted capacity across its portfolio of more than 1.6 gigawatts, including two assets in construction and two in final commissioning.
It should be noted that none of its assets are yet complete, with Waratah – the biggest single connection point in Australia’s main grid for any technology – still working through its commissioning process.
Akaysha has a growing portfolio, however. Apart from Elaine, it also on underwriting agreements in the latest federal government Capacity Investment Scheme auction for its proposed Deer Park battery in Victoria, and for a second stage project at Ulinda Park.
Snowy Hydro, meanwhile, is still working on its Snowy 2.0 pumped hydro scheme – now very late and very over budget – and is starting the commissioning process for its equally controversial gas fired power station at Kuri Kurri.
See also Renew Economy’s Big Battery Storage Map of Australia
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