Australian energy major AGL Energy and French independent power producer (IPP) Neoen have signed a 10-year “virtual battery” contract to build a second 270MW/540MWh battery energy storage system (BESS) at the Western Downs Battery project in Queensland, Australia.
The agreement allows AGL to virtually charge and discharge up to 200MW/400 MWh of Neoen’s Western Downs Battery. This enables AGL to replicate the functions of a grid-scale battery, allowing it to charge or discharge the battery at any time, supporting the stability of supply to the grid.
Construction on the Western Downs Battery started in late 2023. It will provide essential services to help balance the grid network and is being built adjacent to a 460MWp ground-mount solar PV power plant, with these making up Neoen’s Western Downs Green power Hub.
Neoen hopes the stage one BESS will come online in early 2025 during the Australian summer. The stage two BESS is expected to be operational in July 2026. The combined capacity will reach 540MW/1,080MWh.
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Neoen, AGL’s first virtual battery agreement
Readers of Energy-Storage.news will be aware that this is the second agreement the two companies signed, the first formalising in 2022.
The initial agreement pertained to 70MW/140MWh power and energy from the 100MW/200MWh Capital Battery project located in the Australian Capital Territory (ACT).
Under the terms of the first deal, AGL can virtually charge or discharge energy over the five-minute settlement (5MS) trading intervals in the National Electricity Market (NEM). This will help the utility address the increasing difference between times of abundant solar generation and energy demand, as well as the peak demand periods in the evening.
It is unknown specifically what this second agreement will be used for. However, AGL’s chief operating officer, Markus Brokhof, said it will “increase the number of tools we [AGL] can use to support our customers’ needs while also supporting electricity supply into the grid”.
“Virtual battery agreements provide flexibility within our firming portfolio without the requirement to build, operate, and maintain the physical battery,” Brokhof added.
Neoen registers 400MWh BESS as a bidirectional unit
In other news, Neoen last week (21 August) registered its 200MW/400MWh Blyth grid-forming BESS as a bidirectional unit, becoming the second to do so on the Market Management System.
The bidirectional unit can charge and discharge energy to support the grid and provide ancillary services, enhancing overall system flexibility.
The BESS will deliver energy generated by a Neoen-owned wind farm in Goyder, about 60km away, to mining and resources company BHP. This wind farm is part of Neoen’s hybrid renewable energy facility development called Goyder South Renewables Zone. It will eventually comprise 1200MW of wind power, 600MW of solar PV, and 900MW of battery energy storage.
