The Australian Energy Market Operator (AEMO) Services has revealed that nearly 14GWh of long-duration energy storage (LDES) projects were successful in the latest New South Wales Roadmap competitive tender.
In total, 1.03GW/13.79GWh has been awarded across two battery energy storage systems (BESS) and a pumped hydro energy storage (PHES) site located 35km west of the regional town of Mudgee.
The three successful projects are the 125MW/1GWh Stoney Creek BESS, owned by Enervest, Eku Energy’s 100MW/800MWh Griffith BESS and Acen Australia’s 800MW/11,990MWh ACEN Phoenix PHES.
Each successful project will be awarded a Long-Term Energy Service Agreement (LTESA) contract, which is designed to spur investment and lower the cost of project financing. This will, it is hoped, help bring forward new energy infrastructure investment while limiting cost exposure.
Nevenka Codevelle, executive general manager of AEMO Services, said the successful projects stood out for their value relative to their expected cost.
“The projects we selected used the LTESA to top-up their forecast revenues, with the LTESA expected to be underwriting payments up to the minimum gap required to enable investment,” Codevelle said.
“Some of the successful proponents offered more favourable commercial terms than the pro-forma contract, such as a reduced contract term or nominal fixed prices. This flexible use of the LTESA is something we are continuing to see develop over the course of the tender program.”
AEMO said that, following this long-duration tender, the state will have contracted 40% of its 2030 power capacity target of 2GW and more than 65% of its 2034 energy storage target of 28GWh.
Batteries win big in the LDES competitive tender
As noted earlier in this article, two utility-scale batteries were successful in this competitive tender, and both are looking to use lithium-ion technology.
The larger of the two, the Stoney Creek BESS, will be situated west of Port Macquarie and provide grid reliability services to the National Electricity Market (NEM), facilitating the greater uptake of renewable energy generation technologies.
In October 2024, Enervest confirmed that it had penned an agreement with energy storage integrator Energy Vault to supply the 1GWh BESS for the site.
Energy Vault, which also provides a proprietary gravity energy storage technology, will build the BESS using its X-Vault integration platform and its UL9540 and AS3000 certified B-VAULT product. The organisation will also utilise its Vault-OS Energy Management System to control, manage and optimise the BESS operations.
Eku Energy, on the other hand, is developing the Griffith BESS in Yoogali within the Griffith Local Government Area (LGA) of New South Wales. The Griffith BESS is anticipated to be in operation in 2028 and will have an operational lifespan of over 20 years.
When operational, the BESS will balance supply and demand, reduce energy price volatility, and contribute to the electricity grid’s stability in the National Electricity Market (NEM).
Acen Australia’s 15-hour duration PHES site
Acen Australia’s Pheonix PHES is set to be developed within the New South Wales government’s Central-West Orana Renewable Energy Zone (REZ), which was recently increased to enable 7.7GW of generation and storage to connect to it.
The project will have a purpose-built, off-stream, upper and lower storage reservoir connected by a tunnel to a powerhouse containing a pump turbine unit.
It would be built at Burrendong Dam, an inland dam that currently provides irrigation, flood mitigation, water supplies, and 19MW of run-of-river hydroelectric power generation.
LDES technologies and projects are a vital part of the New South Wales energy system, providing renewable electricity in periods of peak demand.
The growing importance of the technology saw three PHES projects, Stratford, Muswellbrook and Lake Lyell PHES projects, named Critical State Significant Infrastructure (CSSI) for economic, social, and environmental reasons. PHES is a form of LDES.
Long-duration tenders deemed ‘critical’ to scaling energy storage, says Eku Energy’s Elias Saba
Speaking exclusively to Energy-Storage.news, Elias Saba, Eku Energy’s chief technology officer, emphasises that the LTSEA contracts are critical to expanding energy storage systems in Australia.
“These tenders are critical to enabling longer-duration systems to come online, which are needed to continue accelerating the energy transition within Australia,” Saba says.
“In particular, as we increase renewables on the grid, these 8-hour and longer-duration systems are important in ensuring that the grid operates efficiently and cost-effectively and lowers consumers’ costs.”
Saba also notes that ensuring that the right community and stakeholder engagement areas were met was a key part of the competitive tender, which required the company to be sharp on its technical solution and price.
“That was critical for us to get right with the bid in Griffith. It’s also an 8-hour system, which is quite unique,” Saba adds.
“There aren’t a lot of 8-hour systems in the NEM, so we had to ensure we had the right design and ran our competitive processes with the right potential partners to provide a cost-effective solution that’s a safe, secure and reliable solution.”
But what is next for the project now that an LTSEA contract has been secured? Saba tells Energy-Storage.news that the project will continue through the development and approval process, hoping to achieve financial close by the end of this year. Construction would then take place in 2026.
