French independent power producer Neoen has reached financial close on its Victorian Big Battery (VBB) after the Australian Government-owned Clean Energy Finance Corporation (CEFC) provided a senior debt facility to finance the design, construction and operation of the battery, which will be one of the largest energy storage facilities in the world.
“We are delighted to announce that the Victorian Big Battery has reached this important financial milestone,” Neoen Australia managing director Louis de Sambucy said in a statement on Thursday. “I would like to thank the CEFC for their renewed trust and commitment towards supporting innovative storage solutions. We are on track to deliver this project before the next Australian summer and are looking forward to playing our part in helping Victoria reach its ambitious target of 50% renewable energy by 2030.”
Financing of the VBB was completed just three months after Neoen secured a grid services contract with the Australian Energy Market Operator (AEMO).
The System Integrity Protection Scheme (SIPS) contract will run until 2032, unlocking up to 250 MW of additional peak capacity on the existing Victoria to New South Wales Interconnector (VNI) over the next decade. Under the contract, the battery will provide an automatic response in the event of an unexpected network outage, providing AEMO with an additional resource to ensure grid stability.
CEFC chief executive Ian Learmonth said the VBB, to be built next to Moorabool Terminal Station in Geelong, would provide a critical boost to the state’s grid security and support a higher penetration of renewable energy.
“The battery will provide grid support services when it is under pressure, allowing authorities to increase the capacity of the VNI by up to 250 MW,” he said. “With more power flowing between the states, including during the peak summer season, the battery will contribute to grid reliability and security.”
To be entirely owned and operated by Neoen, the project will be delivered in collaboration with Tesla, using its Megapack technology, and network partner AusNet Services.
Neoen keeps busy in Australia
The VBB is among a suite of projects being pursued in Australia by Neoen which earlier this month announced its interests here had helped deliver an 18% increase in revenue for 2020.
Among the company’s 2020 highlights was the signing of a power purchase agreement (PPA) with CleanCo Queensland for 110 MW of wind energy which will allow for the construction of the 157 MW Kaban wind farm near Cairns, in Queensland.
That followed reaching financial close on the 460 MW Western Downs Green Power Hub as well as securing a 14-year contract with the Australian Capital Territory. Neoen has also filed planning documents for a 500 MW / 1000 MWh big battery to be built west of Sydney and continues to operate the recently expanded 150 MW Hornsdale Big Battery in South Australia.
“We are thrilled to be building our second big battery in Australia. The Victorian Big Battery once again demonstrates the value of innovative solutions that Neoen is proud to be pioneering,” Neoen chairman and CEO Xavier Barbaro said. “At 300 MW, it will be one of the largest batteries in the world, taking our total capacity in operation or under construction in Australia to over 1.8 GW, and bringing us one step closer to our global target of 5 GW by the end of 2021.”
Victoria’s Minister for Energy Lily D’Ambrosio said the VBB will contribute to the dispatchable resources needed to underpin the increasing share of renewable energy that will make up Australia’s future energy mix. “The Victorian Big Battery is an important part of the largest modernization of the grid in our state’s history, ” she said. “It will create jobs and drive down energy prices, while supporting our transition to renewable energy.”
Energy storage is rated a priority technology under the Australian Federal Government’s Technology Investment Roadmap, as an enabler of cost-effective and reliable low emission electricity.
The AEMO Integrated System Plan indicates distributed energy will provide as much as 22% of the nation’s underlying annual energy consumption by 2040, with more than 26 GW of additional renewable energy required to replace coal-fired generation. This will require up to an additional 19 GW of new dispatchable resources, including utility-scale battery storage.
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