Renewable energy producer, Neoen, has just been awarded a 250 megawatt (MW) grid services contract by the Australian Energy Market Operator (AEMO).
The services will be provided by Neoen’s future 300 MW Victorian Big Battery, set to become one of the largest batteries on the planet.
The battery storage facility will be located next to Moorabool Terminal Station in Geelong, Victoria.
It will be delivered in collaboration with Tesla, using its Megapack technology, and network partner AusNet Services.
Neoen’s System Integrity Protection Scheme (SIPS) contract with AEMO will run until 2032 and is the result of the SIPS 2020 procurement process initiated by the Victorian Government.
It is forecast to unlock up to an additional 250 MW of peak capacity on the existing Victoria to New South Wales Interconnector (VNI) over the next decade of Australian summers.
Under the contract, the battery will provide an automatic response in the event of an unexpected network outage, providing AEMO with an additional means of ensuring grid stability.
Batteries are highly suited to perform this service as they can respond in a fraction of a second.
The battery will also participate in the National Electricity Market (NEM) and support increased penetration of renewables in Victoria through network services such as fast frequency control.
The Victorian Big Battery will help to modernise and stabilise the grid in Victoria and will be instrumental in helping the State reach its objective of 50 per cent renewables by 2030.
Independent analysis shows that for every $1 invested the battery will deliver more than $2 in benefits to Victorian households and businesses.
The savings that big batteries can provide to energy consumers are now well-established, with independent reviews highlighting that Neoen’s Hornsdale Power Reserve has delivered more than $150 million AUD in savings in its first two years of operation.
The battery, which is targeted to be operational by the end of 2021, will also deliver a significant economic boost to the Geelong region – generating over 80 construction jobs and 6 full-time permanent jobs.
Neoen outlines that, where possible, local suppliers will be contracted, with AusNet already having sourced the project’s power transformers from Melbourne-based Wilson Transformer Company.
Local community building and education initiatives will also be supported across the project’s lifetime through a Community Benefit Fund.
In commenting on the news, Neoen Australia’s Managing Director, Louis de Sambucy, said: “We are delighted to have won the SIPS contract and would like to thank AEMO and the Victorian Government for placing their trust in us.”
“We are looking forward to working once again with Tesla and AusNet to deliver this world-leading battery storage facility over the coming months. We are extremely proud to be launching a project of this scale and innovation in support of Victoria’s clean energy transition,” he said.
Minister for Energy, Environment and Climate Change, the Hon Lily D’Ambrosio MP, commented: “By securing one of the biggest batteries in the world, Victoria is taking a decisive step away from coal-fired power and embracing new technologies that will unlock more renewable energy than ever before.”
AEMO’s CEO, Audrey Zibelman, noted that AEMO’s competitive procurement and evaluation process attracted significant interest.
“Neoen’s solution, developed with Tesla and AusNet Services, on a unit cost basis, was a significantly more cost-competitive and attractive market response than other recent major battery developments in Australia,” she said.
AusNet Services Managing Director, Tony Narvaez, said that AusNet Services is proud to be the network partner with Neoen and Tesla on this world-leading project.
“Large scale energy storage is an important component in the transition to a renewable future, while helping to maintain network stability and energy security for Victoria,” Mr Narvaez said.
Neoen’s Chairman and Chief Executive Ofﬁcer, Xavier Barbaro, added that the Victorian Big Battery and the grid support services it will provide heralds a new era for large scale energy storage in Australia.
“We are fiercely proud to be at the forefront of this vital element of the energy transition,” Mr Barbaro said.
“We will continue to build on this experience to deliver world-leading solutions that help to shape and transform the grid of the future for the benefit of industry and consumers across Australia and around the globe.”