Australia’s New South Wales has seen 532MW of firming projects contracted through its seventh infrastructure tender, securing two projects designed to strengthen electricity supply during periods of peak demand and system stress in the Sydney-Newcastle-Wollongong region.
ASL revealed today (15 May) that the tender has awarded Long-Term Energy Service Agreements (LTESAs) to one battery energy storage system (BESS) and one virtual power plant (VPP), with both projects contracted to reach commercial operations by the end of November 2027.
Together, the projects will deliver 2,128MWh of storage capacity to address a forecast supply shortfall during summer 2027-28. This was predicted by the Australian Energy Market Commission (AEMC) last year, which also noted that South Australia could experience reliability gaps from 2026-27.
The tender was conducted following a direction from NSW climate change and energy minister Penny Sharpe to secure an indicative 500MW of firming capacity.
Try Premium for just $1
- Full premium access for the first month at only $1
- Converts to an annual rate after 30 days unless cancelled
- Cancel anytime during the trial period
Premium Benefits
- Expert industry analysis and interviews
- Digital access to PV Tech Power journal
- Exclusive event discounts
Or get the full Premium subscription right away
Or continue reading this article for free
As previously reported by Energy-Storage.news, ASL opened the tender in October 2025, inviting participation from battery storage, gas generation, demand response and aggregated portfolios of smaller systems.
Projects were required to demonstrate the ability to dispatch continuously at maximum capacity for approximately 2-hours or longer, with priority given to those capable of supporting the targeted sub-region.
“The tender attracted strong competition from projects capable of supporting the Sydney-Newcastle-Wollongong region, with two projects ultimately successful in demonstrating value for NSW electricity customers,” said Nevenka Codevelle, CEO of ASL.
With approximately 1GW of firming capacity already under contract, the latest tender brings the total to over 1.5GW.
Contractual obligations and grid reliability
Under the terms of the LTESA, all firming projects are required to support the grid during Lack of Reserve (LOR) events, which occur when the available electricity supply is at high risk of not meeting, or is not meeting, demand.
These contractual obligations ensure projects deliver electricity when the system needs it most, strengthening reliability and helping to protect consumers.
“A key benefit of these contracts is that they require projects to support the system when consumers need them most, with performance obligations that require projects to make capacity available during Lack of Reserve 2 and 3 events,” Codevelle said.
“Each project’s ability to support the system during these times of need was an important consideration in the tender.”
The focus on the Sydney-Newcastle-Wollongong region signals the increasing electricity demand driven by electrification and new industrial load. The sub-region encompasses the state’s largest demand centres and critical transmission infrastructure, making it a priority area for grid reliability interventions as NSW prepares to close the 2.8GW Eraring coal-fired power station in August 2027.
Origin Energy, the owner of the Eraring coal-fired power station, is in the process of transforming the site into a utility-scale battery storage system, with the total system planned to be sized at 700MW/3,160MWh.
The first stage, totalling 460MW/1,770MWh, began commercial operations at the start of the year. Wärtsilä served as the primary technology provider for the battery storage system.
According to ASL, the latest firming tender utilised a single-stage process to accelerate project delivery, with contract terms available for up to 15 years. This streamlined approach reduces administrative burden for bidders while maintaining competitive tension to achieve consumer value, similar to the federal government’s Capacity Investment Scheme.
ASL is preparing to conduct another firming tender in late 2026 or early 2027, targeting projects that can be operational by 2033-34. Two additional NSW Roadmap tenders will commence in May 2026, seeking 2.5GW of generation projects and 12GWh of long-duration storage projects.
Interested in Australia? Read Energy-Storage.news’ Energy Storage Summit Australia coverage and related content.
