‘Value for money’: $3.2 billion deal for NSW to bolster solar, big new battery

‘Value for money’: $3.2 billion deal for NSW to bolster solar, big new battery

A $3.2 billion NSW government electricity contract will help foster the spread of renewable energy, including the construction of a large new battery in the state’s Riverina region.

The 10-year contract awarded to Shell Energy and Edify Energy will result in a 100-megawatt battery being built alongside Edify’s Darlington Point Solar Farm, which began operations earlier this year.

That solar plant, with almost 1 million panels, has enough power to supply 115,000 households and avoid more than 150,000 tonnes of carbon-dioxide emissions annually.

A giant 10-year contract for power from the NSW government will help support renewable energy and a big new battery being built in the Riverina. Credit:David Gray/Bloomberg

Energy and Environment Minister Matt Kean said the deal provided NSW “great value for money and electricity security” and would encourage more large-scale renewable energy projects.

“The NSW government is the second-biggest energy customer in the state, and we are using our purchasing power to leverage new dispatchable capacity to help power our schools, hospitals, traffic lights and tunnels,” Mr Kean said.

“This battery will help to keep the lights on and keep costs down during peak energy periods, and support more renewable energy to come online.”

The contract helps bolster the government’s Electricity Infrastructure Roadmap passed in Parliament last year. The plan aims to accelerate investment of as much as $32 billion into the state’s five renewable energy zones, one of which is in the Riverina.

The announcement of support for the new battery comes just a week after Mr Kean’s federal counterpart Angus Taylor announced the Commonwealth’s backing for a $600 million gas-fired power station for Kurri Kurri in the Hunter Valley.

The intervention was needed because the market had failed to meet the Morrison government’s target to create 1000MW of new generation capacity ahead of the planned closure of AGL’s Liddell coal-fired power station in 2023, Mr Taylor said.

Mr Kean said Edify’s new battery would “mitigate concerns around supply shortages related to the closure” of Liddell.

Kane Thornton, chief executive of the Clean Energy Council, said the NSW government contract supporting renewable energy and batteries “was another example of people and investors making commercial decisions” to back non-fossil fuel sources of power.

The proposed 200MW-hour battery that will sit alongside one of Australia’s largest solar plants, and help meet much of the NSW government’s electricity demand.Credit:Edify Energy

He noted the record 600MW of new large-scale battery capacity in Australia that investors had given financial sign-off in the first quarter of 2021 alone.

Edify’s new battery plan shows “that momentum is continuing”, Mr Thornton said.

John Cole, Edify’s chief executive, said the advantage of large-scale batteries in support of energy firming “in our brave new world of renewables is well documented and supported”.

“Energy storage is fast becoming a valued capacity solution for the National Electricity Market, given its fast and precise response,” Mr Cole said. “The uncertainties in this growing technology class are reducing and with it the barriers to acceptance from market and network participants.”

The expansion of clean energy and batteries would be critical for achieving Australia’s goals of cutting carbon emissions, he said. NSW, along with other states, has pledged to reach carbon neutrality or net-zero emissions by 2050.

Shell Energy will take a half share of the Darlington Point battery, which will have capacity to supply 200 MW-hours of electricity.

“This long-term services agreement is a model for how large energy users can access dispatchable power like battery storage, which complements renewables, while contributing to a cleaner and more resilient power system,” Greg Joiner, Shell Energy’s chief executive, said.

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