Victoria plans 300MW Tesla battery to help stabilise grid as renewables increase.

New battery near Geelong would be one of the biggest in the world, and is due to come on stream for next summer.

One of the largest lithium-ion batteries in the world is planned for Victoria after the renewable energy company Neoen won a contract to build it near the regional city of Geelong.

If constructed as promised, the battery will have a power capacity of 300 megawatts and a storage capacity of 450 megawatt-hours, making it more than twice the size of the battery at Hornsdale, South Australia, which was the biggest in the world when it began operating in 2017.

Like the Hornsdale facility, the Geelong battery will be built using Tesla equipment. The Victorian energy and climate change minister, Lily D’Ambrosio, said it would be installed near Moorabool Terminal Station and would be ready for the 2021-22 summer.

It is expected to store enough energy to run about 500,000 homes for half an hour.

It has been scaled back since it was first flagged in April when it was expected to be 600MW and cost $300m. While among the largest batteries in the world, it is smaller than batteries planned in California and New York.

D’Ambrosio said it would improve the reliability of the power grid as ageing coal-fired power stations became less reliable and the state increased its reliance on wind and solar power. The Andrews government aims to source 40% of the state’s electricity from renewable energy by 2025, and 50% by 2030.

“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,” she said.

She said consumers would pay for the use of the battery through their power bills, but suggested it would lead to a reduction in wholesale energy prices so that Victorians were charged less for electricity.

Independent analysis found that Victorians would receive $2 in benefits for every $1 invested in the battery, she said. Energy consultancy Aurecon found the Hornsdale Power Reserve saved consumers $116m in 2019.

Neoen won the right to build the Victorian battery through a tender run by the Australian Energy Market Operator. Its contract, which runs until 2032, requires the battery to fill the breach if there is an unexpected network outage. It will also provide network services needed to support variable renewable energy, such as fast frequency control. The tender process was initiated by the Victorian government.

The Victorian Greens welcomed the announcement, saying it was part of what it had proposed under its “green new deal” plan. But the acting leader, Ellen Sandell, said the battery should have been publicly owned and the state needed to plan to move away from coal.

“Now the government needs to go one step further and actually admit we need to get off coal in Victoria,” Sandell said.

The conservation group Environment Victoria said it was a “game-changer for Victoria’s transition from old coal-burning power stations to clean energy”.

“This big battery gets us halfway to the storage target we need to prepare for the closure of Yallourn [coal] power station,” the group’s chief executive, Jonathan La Nauze, said.

The state opposition said it was “committed to supporting a considered clean energy transition” but argued the government had not made the case for the project to be at Geelong. The Coalition energy spokesman, Ryan Smith, said it had called in June for a battery to be based further west, at Mortlake near the state’s main renewable energy production zone.

“If it is located at Labor’s proposed site, too much energy from renewables projects will be lost in the transmission to the battery storage,” Smith said.

There are expected to be 80 jobs during construction of the battery, but just six full-time permanent positions once it is built.

The introduction of another large battery into the grid will further chip away at the extent to which it relies on gas-fired power for “dispatchable” generation that can be called on to support variable renewable energy.

Aemo has estimated the national grid is likely to need between six and 19 gigawatts of dispatchable power by 2040 as the system is increasingly dominated by solar and wind. It found renewable energy may at times provide nearly 90% of electricity by 2035, the amount of gas-fired power would fall as pumped hydro and batteries came online and there was no place for new coal-fired generation.

Despite this, the Morrison government says new gas-fired power is essential for the stability of the grid as ageing coal plants close.

The market operator’s chief executive, Audrey Zibelman, said Neoen’s proposal was “a significantly more cost competitive and attractive market response than other recent major battery developments in Australia”.

A portion of the battery’s capacity will be reserved to increase electricity supply over an interconnector cable between Victoria and New South Wales.

5 November 2020

The Guardian