Australia Backs Energy Storage Projects

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

A number of key battery energy storage system (BESS) projects have received significant investment from Australia's regional New South Wales (NSW) government.

Sun Shines on BESS

Australia's regional New South Wales (NSW) government has committed A$100 million (US$71 million) to back a number of large-scale battery energy storage system (BESS) projects. 

The projects are designed to help with electricity grid stability as a number of key coal-fired plants face closure from 2029. The funding will be supplied via the Energy Security Corporation (ESC), which was set up as an investment vehicle by the NSW government, with the goal of building four BESS projects with a combined 650 megawatts (MW) of capacity. They will be located across Sydney, Newcastle and the Hunter Central Coast by the end of 2029. According to Industrial Info Resources data the first two projects to benefit from the funding--each with a capacity for 200 MW output and 400 megawatt-hours (MWh) storage--will be located at the Steel River Industrial Estate in Newcastle and at Homebush in Sydney.

Two more projects will follow with a capacity of approximately 100 MW and 150 MW. Combined, all four projects will be capable of powering 118,000 homes. The first 500 MW of storage is expected to be operational by early 2029, while a further 150 MW is expected to be added in late 2029. All of the projects will be delivered by PLUS Grid Storage, a separate entity within the Ausgrid Group, the largest grid company on the country's east coast, which is majority owned by the NSW government. 

The Benefits

"Large-scale batteries are revolutionising NSW's energy grid, delivering greater energy security and helping to drive down prices," said Minister for Climate Change and Energy Penny Sharpe. "With this first investment, the Minns Labor Government's Energy Security Corporation is helping to accelerate more of these critical projects--helping keep power reliable and affordable for everyone across the state." Energy Security Corporation Chief Executive Officer Paul Peters added: "This is a platform investment in one of the state's most critical load centres, where demand is highest, land is constrained and the need for storage is most immediate."

Coal Shutdowns Loom

NSW has committed to phasing out coal-fired power in the coming decade, but today it supplies more than half of the region's electricity. It is home to the country's largest coal-fired plant, Eraring, and with a generating capacity of 2,920 MW it supplies around a quarter of NSW's power. It was due to shut down in 2027, but owner Origin Power was granted a two-year extension to 2029 by the NSW government over fears that the grid would be too unstable to cope with demand. Origin Power argued that the extension would allow renewables, storage and transmission projects to be delivered. The company is developing a 700-MW BESS project at the plant. The first 460-MW phase was commissioned last December, while a second phase, the 230-MW Eraring Battery 2 is currently under construction. It will be commissioned in the first quarter of 2027. 

Key Takeaways

• NSW government funds first in a series of large-scale battery energy storage system (BESS) projects.
• The first two are located at the Steel River Industrial Estate in Newcastle and at Homebush in Sydney.
• NSW gets more than half of its power from coal-fired plants but is transitioning quickly to renewables and storage. 

About Industrial Info Resources
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