Batteries are included, real and virtual

23 September 2022

Neoen has signed an innovative 7-year virtual battery agreement with AGL Energy, Australian generator and retailer, to provide 70 MW / 140 MWh of virtual battery capacity in the New South Wales (NSW) region of Australia’s National Electricity Market.

Above: Capital Battery under construction

A first of its kind in Australia, the virtual battery is designed by Neoen to allow a large electricity user or retailer to mimic a grid-scale battery, without having to build or own one. Neoen is able to offer this to AGL by combining its expertise in energy management and its own physical assets, in this case the 100 MW/200 MWh Capital Battery in Canberra, which will in parallel continue to deliver valuable services to the network.

Construction of the Capital Battery began in December 2021 and it is expected to start operating in the first half of 2023. Neoen committed to building the Capital Battery as part of its winning bid in the Australian Capital Territory’s 2020 renewable energy auction, where it won a 100 MW power purchase agreement for the Goyder South Stage 1 wind farm in South Australia.

This offtake will enable AGL to hedge its customer load by virtually charging or discharging the battery at any time over 5 minutes trading intervals. It is ideally suited to managing the increasing challenges of the “duck curve” and evening peaks faced by large electricity users and retailers. The increasing penetration of rooftop solar capacity results in oversupply of electricity in the middle of the day. At the same time, meeting peak demand in the evening can be more challenging, especially in summer.

This innovative and flexible offtake is extremely useful for a large electricity user or retailer by conceptually “charging” the battery during low demand periods and “discharging” it during high demand periods. This offtake can be scaled to precisely accommodate customer requirements. In addition, Neoen has designed a bespoke and dedicated interface that allows the customer to submit live orders or use sophisticated predesigned dispatch strategies.

AGL operates Australia’s largest electricity generation portfolio and is committed to decarbonisation. The agreement with Neoen is key to AGL’s strategy of delivering the energy supply mix of the future and builds on AGL’s $4.8 billion investment in renewable and firming generation and the more than 2350 MW of new generation capacity it has added to the grid since 2003.

Neoen owns a battery storage portfolio in Australia of 576 MW in operation or under construction, positioning it as the country’s leading owner and operator of big batteries.

In addition to the Capital Battery, Neoen also owns and operates the recently completed 300 MW/450 MWh Victorian Big Battery in Geelong, and the 150 MW/193.5 MWh Hornsdale Power Reserve in South Australia. Neoen’s ambition is to have at least one large-scale battery operating in each state of Australia’s National Electricity Market.

Louis de Sambucy, Neoen Australia’s managing director said: “The virtual battery is an ideal firming tool, which will become a core Neoen product and a key element in the success of our expanding range of client offerings. With the Capital Battery currently under construction, we will soon be operating grid-scale batteries in three of the five states of the National Electricity Market and have multiple storage projects in development across Australia.”

Grid forming inverters

Another innovative energy storage project that AGL is involved with is a 50 MW/50 MWh lithium- ion battery with grid forming capabilities to be located at Broken Hill, NSW, due to be completed in 2023.

In March the Australian Renewable Energy Agency (ARENA) announced $14.84 million in funding to AGL towards building the facility.

Energy storage provider Fluence and its consortium partner Valmec have been engaged by AGL to supply the batteries for the $41 million project, which aims to demonstrate how large scale batteries can be equipped with grid forming inverters to improve system strength and facilitate higher penetrations of variable renewables at the lowest cost.

Broken Hill has been selected as an ideal candidate site for testing grid forming capabilities due to its “unique edge-of-grid” location, which results in low system strength.

ARENA CEO Darren Miller said the next step for large scale batteries is to show their capabilities in strengthening the grid as more renewables come online. “Large scale energy storage is a priority technology for the Australian government’s Technology Roadmap, and a key focus area for ARENA. Big batteries are already becoming critical to our electricity system, but we know with grid forming inverters they can provide system strength services traditionally provided by thermal generation. We are particularly interested in seeing how AGL’s Broken Hill battery will utilise and demonstrate advanced inverter technology in a weaker section of the electricity grid.”

AGL Chief Operating Officer Markus Brokhof said the Broken Hill battery was another step towards AGL becoming “a leading orchestrator of batteries in Australia.”

ARENA has to date funded four other projects which seek to demonstrate advanced inverter functionality in conjunction with batteries: Edify Energy’s 25 MW/50 MWh planned battery adjacent to the Darlington Point solar farm, NSW; Electranet’s ESCRI battery; Hornsdale Power Reserve expansion; and Transgrid’s Wallgrove grid battery.

A further ARENA initiative focused on batteries with advanced inverters is the $100 million Large Scale Battery Storage Round. Twelve projects have been invited to submit full applications for potential funding.

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