World’s biggest eight-hour lithium battery wins NSW long duration storage tender

Another two eight hour lithium batteries have won contracts under the NSW government’s long duration storage tender, including one that will compete to be the biggest battery project in the country, in terms of megawatt hours of storage.

Ark Energy, part of the Korea Zinc group, is to build a 275 MW, 2,200 MWh lithium-iron phosphate battery at Myrtle Creek, south of Casino in the north of NSW.

It will trump Akaysha’s Waratah Super Battery and the Orana battery in NSW, and Synergy’s 2,000 MWh Collie battery in W.A as the biggest in the country when it is completed.

It is also likely the biggest eight-hour lithium battery in the world, and will likely cost in the region of $1.3 billion.

Another eight hour lithium battery – the Goulburn River project sized at 49 MW and 392 MWh – will be built by Lightsource bp at Merriwa, in the Upper Hunter Valley next to a proposed solar farm, while the previously announced Silver City compressed air storage project at Broken Hill is also a winner of the NSW tender.

See: NSW secures another $4.2 billion of wind, solar and storage to help shift from coal

The long duration storage program was originally set up with pumped hydro storage in mind, but the delays in planning approvals, threats of cost overruns from civil engineering has made it difficult for those projects to get across the line.

In their place has emerged a series of eight-hour lithium ion battery projects, nearly double what previous analysis had judged to be the sweet spot for this technology. Flow batteries are also looking to compete in this space, but most are still in their pilot stage and are not ready for deployment at this scale.

A 50 MW, 400 MWh eight hour lithium battery project at Limondale in the south-west of the state won the only contract in the first long duration storage tender held by the NSW government earlier this year, and will be built near an existing solar project by German energy giant RWE.

But while some dismissed that as a one-off for the technology, the latest wins for Ark Energy and Lightsource suggest that something else is afoot and that lithium ion battery is, once again, defying earlier expectations.

As AEMO Services notes, pumped hydro could not compete in the latest long duration storage tender because developers said it was “too early”, even though it says the technology could provide the lowest cost long duration storage over the longer term.

They still hope to compete in future tenders, but they need to further “de-risk” their projects. They will have the advantage of a longer life, which means they can access to 40 years of revenue certainty, compared to 14 years for the batteries.