The New South Wales Government has supported three new long-duration energy storage (LDES) projects as part of the latest tender round under the NSW Electricity Infrastructure Roadmap.
A pumped hydro project has been selected for the first time, as well as two large-scale batteries.
The New South Wales Government said this latest tender round is the largest of its kind in Australia.
LDES serves an important role in the electricity system, allowing renewable energy such as solar and wind to be stored and then released on demand when needed.
This helps smooth the supply of renewable energy around the clock, reducing price spikes and placing downward pressure on electricity prices over time.
The new projects include:
- The 125MW/1000MWh Stoney Creek BESS (battery energy storage system) in Narrabri
- The 100MW/800MWh Griffith BESS in Yoogal
- The 800MW/11,990MWh ACEN Phoenix Pumped Hydro Energy Storage, located near Lake Burrendong
The projects are expected to create around 900 construction jobs and 60 ongoing positions.
The State Government said these projects will also help to secure at least $3.5 billion in investment in the state’s energy system, bringing new investment to regional New South Wales and underscoring its place as a leading destination for energy industry investment.
Combined, the awarded projects represent 1.03GW or 13.79GWh of energy storage capacity – exceeding the tender’s indicative target of 1GW.
When fully charged, the 1GW of long– duration storage will contain enough energy to power more than half a million households for a day, ensuring a reliable supply of electricity is available during periods when the sun isn’t shining and the wind isn’t blowing.
AEMO Services Executive General Manager, Nevenka Codevelle, said that the result demonstrated confidence from investors and developers in AEMO Services’ New South Wales tender plan, as well as the Long-Term Energy Service Agreement (LTESA) contract.
“The long-duration storage capacity supported through this tender is the largest to date, and we’re seeing strong competition and innovation in how project proponents are bidding – meaning we’ve been able to support more projects with increasing value to NSW electricity consumers,” Ms Codevelle said.
LTESAs are innovative contracts designed to spur investment and lower the cost of project financing, bringing forward new energy infrastructure investment while limiting cost exposure to New South Wales electricity customers.
The successful projects can each continuously dispatch electricity for at least eight hours. The Lake Burrendong project offers a storage capacity equivalent to around 15 hours duration.
With the addition of these projects, New South Wales has now locked in 40 per cent of its LDES by 2030 target, and more than 65 per cent of the 2034 target.
The tender is the fifth conducted by AEMO Services as Consumer Trustee under the NSW Electricity Infrastructure Roadmap.
Other projects that will support the stability and reliability of the grid that are due to come online in the state soon include the Waratah Super Battery, the Smithfield BESS and Stage 1 of the Eraring Big Battery.
Ms Codevelle said the successful projects stood out for the value they provide relative to their expected cost.
“The projects we selected used the LTESA to top-up their forecast revenues, with the LTESA expected to be underwriting payments up to the minimum gap required to enable investment.
“Some of the successful proponents offered more favourable commercial terms than the pro-forma contract, such as a reduced contract term or nominal fixed prices. This flexible use of the LTESA is something we are continuing to see develop over the course of the tender program.”
Successful projects were evaluated against both non-financial and financial merit criteria, including social licence initiatives, project delivery capability, and market benefits. The tender assessment demonstrated that the benefits to New South Wales electricity consumers outweighed the expected costs of support.
Ms Codevelle said that the outcome sent a clear signal of AEMO Services’ willingness to select projects throughout various stages of development, including earlier stage projects.
“Some of the successful projects do have longer lead times or are in an earlier stage of their development cycle. Under the New South Wales legislation, we have the flexibility to pursue those earlier stage opportunities where it supports meeting the state’s future energy needs and is in the interest of consumers.
“We’re now looking ahead to our next long-duration storage tender for assets that commit to be operational by 2034, scheduled to open before 30 June 2025,” Ms Codevelle said.
“In particular, we’re encouraging short lead-time projects to come forward to help us meet our 2030 target.”
New South Wales Minister for Climate Change and Energy, Penny Sharpe, said the State Government is delivering a reliable, affordable energy system that benefits communities and the economy.
“New South Wales is already powered by around 35 per cent renewable energy. These projects will help ensure New South Wales households and businesses have access to affordable and reliable electricity as we continue transform our grid.
“These new projects will drive local and regional economies with jobs and investment, while also delivering a reliable energy system for the whole state.”
Eku Energy CEO, Daniel Burrows, said securing the long duration storage long-term energy service agreement for its Griffith BESS is a significant milestone for the company.
“This project underscores our commitment to accelerating the energy transition by delivering safe and reliable energy storage solutions, through providing cost-effective clean energy to existing and future generations, whilst also supporting New South Wales’ transition to a sustainable energy future.”
