French renewables developer Neoen has completed financing for its 100MW/200MWh capital battery in Canberra, saying the project is on track to be operational in the first half of 2023.
The owner and operator of Australia’s two largest batteries, Neoen, is set to change its third – the capital battery next to Queanbeyan substation in south-east Canberra.
The Capital Battery will be owned by Neoen and will be financed by a combination of company equity and loans from infrastructure fund manager Infradebt as well as the Clean Energy Finance Corporation (CEFC). This is CEFC’s third investment in Neoen’s Australian large batteries.
According to Neoen, Capital Battery is also expected to provide grid support services to the grid, presumably through what are known as virtual synchronous machines or grid-forming inverters, which gives batteries the ability to help stabilize the network by providing inertia.
It is something that the company 150MW / 193.5MWh Hornsdale Power Reserve, aka the Big South Australian Battery, began full-scale operation in July after two years of testing.
The Capital Battery is Neoen’s first project with its South Korean technology partner Doosan. The two large batteries that Neoen already operates, the 300 MW / 450 MWh Victorian Big Battery near Geelong, and the Hornsdale Power Reserve have both used Tesla technology. The Doosan partnership was announced shortly after the Victorian Big Battery caught fire during commissioning.
Virtual Battery Contract with AGL
A 70MW “virtual battery deal” that Neoen entered into with utility giant AGL Energy in April is also helping to support Capital Battery’s finances. Lasting seven years, Neoen described the new type of contract as a financial agreement and a hedging tool.
“The virtual battery [agreement] is an innovative solution designed by Neoen to allow a large electricity consumer or distributor to mimic a grid-scale battery, without having to build or own one,” Neoen said of the AGL contract. . “This highly flexible solution gives AGL Energy the ability to cover its customers’ load by virtually charging and discharging a 70 MW battery as and when it wants.”
Neoen said it hopes the virtual battery concept will become one of its flagship products in the future.
This AGL agreement is also probably behind the doubling of the capital’s battery capacity, which went from the 50 MW / 100 MWh initially defined by Neoen in its 2020 tender with the Government of the Territory of the Australian capital (ACT).
The Capital battery was part of Neoen’s winning bid at the territory’s renewable energy auction that year, where it won a 14-year contract to supply 100MW of wind power to the ACT government from of stage 1 of his Goyder Renewables area, which included the battery plan.
The Goyder Renewables Zone is a flagship project currently being developed by Neoen – a hybrid wind, solar and storage project located near Burra in central north South Australia.
Back at the Capital Battery, the construction of the project has already started at the end of last year. Once the battery is operational in the first half of 2023, Neoen announces that it will launch a “community co-investment program”, offering local residents the opportunity to become financial players in the project. This specification was part of Neoen’s winning bid in the ACT Renewable auction in 2020.
Neoen’s big batteries
Neoen now has the largest operational and planned battery portfolio in Australia, with 576 MW. Late last year it announced plans for a 300MW and 800MWh battery in Blyth, north Adelaide.
The company aims to have a grid-scale battery in each of the five states participating in the national electricity market, which it is on track to achieve with Capital Battery scoring three of the five.
The strategy turns out to be very profitable for the company. In August, Neoen announced that storage revenues had increased by more than a third over the past year thanks to its Australian battery assets – in particular its Victorian Big Battery brought online coupled with the Australian energy crisis.
Neoen’s consolidated revenue in the first half of 2022 amounted to 328 million Australian dollars (224 million euros), up 36% compared to the first half of 2021, according to its latest earnings report.
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