The Energy Security Corporation, the $1 billion green bank created by the NSW state Labor government, has announced its first investment – in four big battery projects – as it seeks to fill the gap created by anticipated coal closures.
The ESC announced on Tuesday that it will invest $100 million in the form of senior debt finance to fast-track four grid battery projects proposed by Plus Grid Storage, a wholly-owned offshoot of Australia’s biggest distribution network company Ausgrid.
Two of the batteries have been identified – Steel River in Newcastle and Homebush, near the former Olympic precinct in the centre of greater Sydney. Both are rated at 200 megawatt (MA) and 400 megawatt hours (MWh).
These two batteries and another 100 MW battery will be built by early 2029, ahead of the new and delayed closure date of the country’s biggest coal fired generator at Eraring (2,800 MW).
Another 150 MW battery will be completed by the end of 2029, with a further 350 MW of battery capacity to be delivered by 2031, taking the total to 1 GW, when it can be assumed that the Vales Point coal generator may also exit the grid.
The identity of the other batteries was not revealed in the government media release, but Ausgrid’s website indicates four new big batteries with roughly those dimensions – at Kurnell in southern Sydney, Berkeley Vale and Rathmines on the central coast, and Rothbury in the Hunter Valley.
The ESC is chaired by Cameron O’Reilly, who led the 2023 review into the NSW electricity system, which included recommendations on the ESC’s structure and mandate.
It is armed with $1 billion of state funds to fill gaps not already addressed the state’s extensive infrastructure roadmap and its series of tenders for new generation and long duration storage.
“Large-scale batteries are revolutionising NSW’s energy grid, delivering greater energy security and helping to drive down prices,” state minister for Climate Change and Energy, Penny Sharpe said in a statement.
“With this first investment, the Minns Labor Government’s Energy Security Corporation is helping to accelerate more of these critical projects – helping keep power reliable and affordable for everyone across the state.”
ESC chief executive Paul Peters said the batteries are located in the state’s most critical load centres, where demand is highest, land is constrained and the need for storage is most immediate.
“Plus Grid Storage’s ability to deliver these projects by 2029, while making better use of existing infrastructure, were critical factors in our decision to invest in this battery platform,” he said.
Indeed, the fact that Plus Grid is owned by the network operator, Ausgrid, should make it easier to find the right locations and obtain grid connections.
Distributed networks such as Ausgrid have been pushing for a greater role in the green energy transition, which has tended to focus on new renewable energy zones and new transmission lines. The local networks say they have a lot of spare capacity which can be exploited at much lower cost.
Plus Grid Storage operates independently from Ausgrid’s regulated network business.
The investment by the ESC in NSW follows the creation of the State Electricity Corp in Victoria and its investment into several major wind, solar and battery projects, and amid a new push by unions for governments to invest in new renewable and storage capacity, particularly relating to the repowering of large energy users.
That push is gaining public support, according to the ETU, but proposals to help bankroll the repowering of the Tomago smelter in the Hunter Valley – after its coal contract with AGL ends in a few years – have yet to find agreement.
The federal government is proposing to use its own generation company, Snowy Hydro, as the link to underwrite new power purchase agreements, but the reported $2 billion proposal is yet to find agreement with the NSW government.
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