Australia’s New South Wales seeks 2.5GW of generation and 12GWh of energy storage in state’s largest-ever tender

Tender 8 introduces a new Hybrid Generation Long-Term Energy Service Agreement (LTESA) product, allowing applicants to combine solar or wind generation with battery storage in a single project.

As reported by Energy-Storage.news earlier this year, ASL had been consulting on introducing a new Hybrid LTESA product to complement the existing Generation LTESA and better accommodate hybrid projects combining solar PV generation with lithium-ion battery energy storage systems (BESS).

The Hybrid LTESA is available to projects where generation export capacity matches or exceeds storage export capacity, with storage systems providing a minimum 4-hour duration at the commercial operations date.

The contract structure uses a cash-settled swap with a hybrid strike price and price risk sharing, with settlements based on sent-out net exports that directly account for imports and exports.

“This is the largest renewable energy generation tender in NSW history, and it shows just how serious we are about delivering cheaper and more reliable power for households and businesses,” Sharpe said.

“Tender 9 ensures we can store renewable energy, so it can be released on demand when needed, making our grid more stable and reliable.”

Building on deployment momentum

The tenders build on NSW’s track record in utility-scale battery storage procurement. In February 2026, the state contracted six battery storage projects totalling 1.17GW/12GWh under its previous long-duration storage tender, with projects ranging from 150MW/1.2GWh to 350MW/2.8GWh and durations between eight and 12 hours.

The Great Western Battery, owned by Neoen Australia, was the largest single award at 330MW/3,500MWh, followed by Ark Energy’s Bowmans Creek BESS at 250MW/2,414MWh and BW ESS’ Bannaby BESS at 233MW/2,676MWh.

The Armidale East BESS (158MW/1,440MWh), Ebor BESS (100MW/870MWh), and Kingswood BESS (100MW/1,080MWh) completed the portfolio of successful developments.

Penny Sharpe hailed the results at the time, stating that “we’re not stopping here” in terms of storage deployment ambitions. Several industry stakeholders also noted that the tender results demonstrated NSW’s commitment to building a pipeline of storage projects to underpin grid reliability as coal generation exits the system.

Speaking exclusively to ESN Premium following this tender round, Thimo Mueller, general manager, commercial at ASL, said that “the cost declines in lithium-ion tech provided very attractive pricing” for long-duration applications, with all six contracted projects utilising lithium-ion battery technology despite the tender being technology-neutral.

Mueller also observed that lithium-ion systems were delivering competitive pricing for 8-12-hour duration applications, traditionally considered the domain of alternative storage technologies.

Tenders 8 and 9 will also launch following the recent success of NSW’s latest firming tender, which secured 2,128MWh of energy storage to address summer capacity shortfalls.

Earlier this year at the Energy Storage Summit Australia 2026 in Sydney, ASL’s Mueller emphasised that a “culture of collaboration is needed” to push energy storage projects from ambition to operation.

The consumer trustee has worked closely with proponents to navigate connection challenges, financing structures and delivery timelines, recognising that successful project execution requires coordination between developers, network operators and government agencies.

Assessment framework and market transition

Tender 8 follows the completion of the Capacity Investment Scheme Tender 7, seeking 5GW of renewable energy generation capacity across the National Electricity Market (NEM), with generation projects in NSW now transitioning back to Roadmap tenders.

Projects cannot hold both an LTESA and a Capacity Investment Scheme Agreement (CISA) simultaneously, requiring proponents to commit to forgoing Commonwealth support if awarded state contracts.

The tender process employs a single-stage submission with merit assessment weighted 49% toward financial value and system benefits, 17% each for project deliverability, organisational capacity, and social value.

Projects demonstrating commercial operations dates before 31 December 2029 are expected to receive favourable consideration.

Financial value assessment in Tender 8 considers projects’ ability to reduce wholesale electricity market costs and deliver system security benefits.

Wind and hybrid generation-storage projects that produce during non-solar hours are expected to deliver strong financial value, with well-advanced wind projects recognised as having high marginal value in achieving NSW’s energy transition objectives. ASL’s market brief document noted that the assessment remains technology-neutral on a value-for-money basis.

Meanwhile, for Tender 9, the merit assessment will include contributions to system strength and the ability to provide system security services, reflecting the increasing importance of grid stability as the state transitions away from coal-fired generation.

Technologies such as pumped hydro can serve as system-strength solutions, potentially deferring or avoiding network costs while delivering broader benefits to NSW customers. Projects must maintain contracted storage capacity equivalent to at least an 8-hour duration across the LTESA term.

Interested in Australia? Read Energy-Storage.news’ Energy Storage Summit Australia coverage and related content.