Six battery energy storage projects will be fast-tracked to massively bolster the resilience of South Australia's energy system, more than doubling the state's large-scale battery storage capacity and supporting an estimated $2.2 billion of local investment in new storage projects.
Tenders for long-duration capacity have been awarded under the state's Firm Energy Reliability Mechanism (FERM), fast-tracking private investment in large-scale battery energy storage systems (BESS) that will take SA's battery storage capacity from 1.1 GW to 2.5 GW, which means more than 517MW of dispatchable energy that can power more than 300,000 average households for up to eight hours.
These contracts will see batteries' contribution to our state's generation capacity grow to more than double that in Victoria, New South Wales and Queensland, adding capacity to reach almost three-quarters of South Australia's all-time peak demand, eclipsing all other major Australian grids.
Tenders called for the private sector to provide long-duration capacity under the FERM, to ensure the state always has eight hours of continuous dispatchable energy available for unexpected circumstances.
This initiative continues the state's leadership in ensuring that renewable energy generation is backed with long-duration capacity, a commitment to system resilience first demonstrated with the energising of the world's first grid-scale battery, the Hornsdale Power Reserve at Jamestown, in 2017.
The combined BESS projects under the FERM tender will add more than four times the capacity of the expanded Hornsdale battery.
The FERM was established by the Malinauskas Government to fast-track private investment in long-duration energy. The tender called for investment in energy projects that would deliver additional reliability at times when the state's energy system is under stress. The additional storage will complement existing firming capacity.
The scheme establishes contracts with eligible existing and new long-duration firm capacity power generators, effectively underwriting a portion of their revenue to create financial certainty for market proponents outside of sporadic and infrequent high price events. The availability of this firming generation will be critical for maintaining the reliability of SA's electricity system.
During very hot weather in January, we saw shortlived but extreme price spikes due to low generation and little available battery capacity, with increased reliance on more expensive generation such as gas.
Isolated events such as this have distorted South Australia's longer-term power prices – and it is events such as this that the FERM is designed to alleviate.
This initial tender round resulted in six battery energy storage projects being awarded Firm Energy Reliability Mechanism Agreements (FERMAs) totalling 517 MW / 4,136 MWh of dispatchable energy.
The successful projects are:
- Brinkworth BESS - Akaysha Energy - 250MW / 1000MWh
- Dartmoor BESS - ZEBRE Pty Ltd - 144 MW / 576 MWh
- Goyder Battery Stage 1 - Neoen Australia - 200 MW / 800 MWh
- Goyder Battery Stage 2 - Neoen Australia - 200 MW / 800 MWh
- Northern Battery - AMPYR Australia - 270MW / 1080MWh
- Tungkillo BESS - Iberdrola Australia - 270MW / 1080MWh
The successful tenderers are required to have their committed output available to dispatch continuously for eight hours when required. These projects will be delivered in stages: the first 375 MW / 3000 MWh by November 2028, and a further 142 MW / 1136 MWh by November 2029.
The tender was run independently by ASL, the scheme administrator appointed by the South Australian Government.
As put by Tom Koutsantonis
Too often we see wholesale prices falling but price spikes for consumers due to isolated events where there is a lack of firming capacity.
Now we are helping fast-track projects that will more than double the state's large-scale battery storage capacity and support an estimated $2.2bn of local investment in new storage projects.
These will grow batteries' contribution to our state's generation capacity to more than double that of Victoria, New South Wales and Queensland, adding capacity to reach almost three-quarters of South Australia's all-time peak demand, eclipsing all other major Australian grids.
What this means is reliability.
Long-duration dispatchable capacity remains vital to system stability, particularly during periods of peak demand. The tender agreements announced today support system security while helping put further downward pressure on wholesale prices.
The Malinauskas Government recognises the importance of ensuring secure, reliable and resilient electricity supply for South Australia, at least cost to consumers.
All around the world, legacy generators are leaving the system, and that's a reality we have been preparing for.
South Australia was one of the first jurisdictions in the world to identify the opportunity early to harness its abundant natural resources to get ahead of these realities. Now we are again looking to the future with an innovative energy policy that creates certainty for both consumers and generators. The output this first stage tender commits to our energy system will ensure that South Australia remains at the forefront of the global energy transition, while also delivering the system resilience to protect consumers.
