Newly announced funding support from the Australian Renewable Energy Agency (ARENA) is enabling the expansion of a planned large-scale battery project in New South Wales.
ARENA said this morning that its A$6.6 million (US$4.5 million) commitment means clean energy developer Edify Energy can build 150MW/300MWh of energy storage at three sites.
They are being built adjacent to a 333MWp/275MWac solar farm at Darlington Point, a small town in western New South Wales (NSW).
The ARENA funds will directly support the deployment of one of the three sites, a 25MW/50MWh battery energy storage system (BESS) equipped with advanced inverters.
Advanced inverter projects are currently a focus for the agency. It has already helped fund four projects that have them and it is currently also running a A$100 million funding opportunity for which it has shortlisted 12 other advanced inverter-equipped BESS projects for support.
Advanced inverter technologies enable batteries and other inverter-based energy resources to provide synchronous inertia to the grid, a vital service which keeps the network stable and running properly. Traditionally a role played by thermal power plants, as the number of fossil fuel plants – mainly coal – for baseload decreases, there is a need for this inertia to come from alternative means.
At Edify’s Darlington Point project, batteries will not only firm up renewable energy, but the systems will strengthen the grid in the southwestern part of NSW and in turn “help to unlock more renewable uptake,” ARENA acting CEO Chris Faris said.
“To support the rapid transformation of our electricity system, large scale batteries will need to evolve to do more than just store energy. They need to be equipped with advanced inverters that can provide critical grid stability services to keep the system safe and secure, especially as synchronous generators retire and renewables provide a higher share of supply. That’s why it’s important to support and demonstrate projects like this, where batteries with advanced inverters can help supply critical stability services to the grid.”
ARENA previously supported Edify on another large-scale BESS project at Gannawarra in the state of Victoria in 2017, a 25MW/50MWh system and one of the country’s first of its kind.
As with the Gannawarra project, Tesla has been selected as the battery equipment provider for Darlington Point, with the California-headquartered company’s Megapack BESS solution to be used.
Energy-Storage.news reported in June that Edify has secured a long-term syndicated loan facility from banks as well as offtake contracts with Shell and utility EnergyAustralia to use the Darlington Point battery systems in the National Electricity Market (NEM). The developer has sold a majority stake in the project to Federation Asset Management but retains a minority interest.
ARENA noted today that the government of NSW has also pledged A$6.5 million in funding support for the project as part of the state’s A$75 million Emerging Energy Program.
While battery storage is playing a number of increasingly vital roles in the Australian energy system and making strong returns through the NEM, the merchant nature of the revenue streams earned versus long-term contracted revenues presents a challenge to project developers, which need to convince investors that that uncertainty doesn’t necessarily equal a big risk.
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