Australia is drenched in sunshine most of the time, which makes it an ideal location for solar power. That’s good. But as more solar energy gets added, it comes close to overwhelming the grid with an abundance of renewable energy during the midday hours while not being available in the late afternoon and early evening hours when demand for electricity highest. That’s bad. Neoen has a solution — massive battery storage facilities that soak up all of that electricity and send it back to the grid later in the day.
The imbalance between supply and demand results in what is known in the industry as the “duck curve,” and, as the illustration above shows, authorities in Western Australia expect the imbalance to intensify in coming years as more solar electricity gets added, most of it from rooftop solar systems.
The key to the success of renewable energy is to capture most of it when it is abundant and make it available to the grid when it is needed, a process known as time shifting. Western Australia is unique in that its electrical grid is not interconnected with those in other Australian states or territories. Partly, that is because of the enormous distances between Western Australia and the rest of the country, which mean Western Australia is on its own when it comes to managing its grid.
Until now, Western Australia has relied primarily on coal-fired thermal generating stations for the bulk of its electricity, but as the cost of renewable energy continues to fall, those coal-powered facilities are becoming less profitable. To help soak up the vast amount of solar power available during the day, the Australian Energy Market Operator (AEMO), at the request of the Western Australian Coordinator of Energy, has approved a proposal by Neoen to install a 197 MW battery near the town of Collie in Western Australia with a 4-hour discharge time.
According to Neoen, the new facility will consist of 224 Tesla Megapack 2XL units. It is the first phase of a 1 GW/4 GWh project first proposed in December of 2022. The battery will be located on land of the Wilman people of the Bibbulmun nation in the South West region of Western Australia. It will connect to Western Power’s Shotts Terminal substation, which is part of the South-West Interconnected System.
The Collie Battery is Neoen’s sixth big battery in Australia, bringing its total Australian storage assets to over 1.1 GW in operation or under construction, and further cementing its position as the country’s leading developer, owner, and operator of batteries. It already owns and operates the 300 MW/450 MWh Victorian Big Battery in Geelong and the 150 MW/193.5 MWh Hornsdale Power Reserve in South Australia. Its 100 MW/200 MWh Capital Battery, 200 MW/400 MWh Blyth Battery, and 200 MW/400 MWh Western Downs Battery are all currently under construction.
Part of the impetus for the new battery in Western Australia is that state’s interest in providing renewable energy to new industries supplying green hydrogen and other low-carbon products to Australia and the world. Western Australia recently issued a new demand forecast that anticipates the need for more than 50 GW of new wind, solar, and storage to meet those growing demands for zero-carbon energy.
The state’s more immediate focus, however, is to provide the required firming capacity to allow coal to exit and to support the growing share of rooftop solar in Western Australia, which is the world’s largest isolated grid and has no ability to import or export power.
Neoen’s Western Australia head Nathan Ling said the company identified a need for battery storage several years ago. “I think this demonstrates that markets are changing as we’re becoming less reliant on fossil fuel generation and more on renewables,” Ling told RenewEconomy. “The services from batteries are also changing away from the frequency and ancillary services which batteries will continue to provide, and this one will do the same, but also providing more of those firming services by being able to firm up renewables and shift generation to when it’s most needed.”
Neoen says it has been working on the project since 2021, and has already given a notice to proceed to construction company UGL and to Tesla, which will supply 224 of its Tesla 2XL Megapacks. The first stage will be sized slightly larger than the AEMO contract, and the facility has planning approval for a total of 1GW/4GWh of battery storage. The Collie battery will be the first 4-hour battery to be built by Neoen, and its sixth large standalone battery overall in Australia. It also owns several large wind and solar projects.
“This is an exciting time for Neoen as it is our first major project in WA, and it also means we now have a big battery in five of the six Australian states,” Louis de Sambucy, the head of Neoen Australia, said in a statement. “With our growing team in Perth and a strong pipeline of projects, we look forward to playing an increasingly significant role in the state’s rapid decarbonization.”
“Renewable energy infrastructure, such as Neoen’s big battery, is a key factor in the attraction of new, innovative and sustainable industries that will cement Collie’s place as an important industrial hub, providing worthwhile employment opportunities for generations to come,” said Collie shire president Sarah Stanley.
In the absence of adequate battery storage, the renewable energy revolution in Western Australia would destabilize that state’s utility grid for a significant period of time most days. Until now, providing ancillary services like voltage and frequency stabilization has been at the heart of the business case for such large battery storage projects, but now their time shifting capability is taking on a more prominent role.
Neoen said in a separate announcement that it is increasing its forecast operating earnings in FY 2025 to more than €700 million from the €600 million previously advised just a month ago. That is an increase of $160 million a year, and while Neoen is not saying that all of that increase in profits is attributable to this new battery contract, RenewEconomy suggests it will account for a large part of the increase.
Australia has long relied on coal for its electricity, with one former minister crowing that the country has enough coal to power the world for a thousand years. Of course, if that happened, there would be no need for electricity at all because very few humans would be left alive to consume it.
Featured image: Victoria Big Battery features Tesla Megapacks. Image courtesy of Neoen.
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