Australian utility AGL gets planning approval for 200MW / 800MWh BESS at coal power station site

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Loy Yang coal power station, where the BESS would be built. On the right can be seen open cut mining operations which feed the power plant with coal. Image: Wikimedia user Marcus Wong.

AGL, one of Australia’s biggest power generation and retail companies, has received government planning approval for a large-scale standalone battery storage system, a year on from its first announcement of the project.

The company said yesterday that approval has been granted for the 200MW, four-hour duration (800MWh) battery energy storage system (BESS) by the Department of Environment, Water, Land and Planning for the Australian state of Victoria. 

The grid-scale BESS would be located at the site of Loy Yang power station, a 2,225MW coal power plant which is fed directly from an adjacent coal mine. 

AGL will now assess the economics and viability of the project. The company is undertaking a demerger to separate its generation and retail businesses into two entities: Accel Energy, which will carry on the group’s electricity generation activities and AGL Australia, which will be involved in energy retailing, trading, storage and supply. 

The BESS at Loy Yang would be part of Accel Energy’s portfolio, the company said, if AGL makes a final investment decision in favour of going ahead with the project. 

It would be one of Australia’s biggest battery projects, almost double in size of the Victoria Big Battery (300MW / 450MWh) which is going through final testing before starting commercial operations, although AGL itself is about to start construction on a bigger one, the 250MW / 1,000MWh Torrens Island Power Station project in South Australia

AGL revealed a plan in August 2020 to source 34% of its electricity capacity from renewables and energy storage by the 2024 financial year, including a goal to deploy 850MW of storage to participate in Australia’s National Electricity Market (NEM)

As early as 2017, the company’s leadership publicly said it saw renewables with energy storage as the natural, economically-viable successor to coal power plants. AGL is pursuing a goal to hit net zero by 2050. 

In addition to Torrens Island and Loy Yang, the company is seeking approval for two other large-scale projects at Broken Hill and Hunter, both in New South Wales (NSW). 

“As the largest Australian Stock Exchange-listed operator of renewables assets, a key focus is to invest in storage and firming capacity to ensure we continue to provide reliable and affordable electricity to households and businesses,” AGL chief operating officer Marcus Brokhof said.

“Our generation sites provide rare and unique redevelopment opportunities as they are established sites with a surplus of land, road and rail access, transport facilities and storage infrastructure embedded in the environment.”

Brokhof said the generation sites would be developed into “integrated industrial energy hubs,” with the Loy Yang site set to transform the LaTrobe Valley region where it is located with the creation of “regional jobs and opportunities well into the future”.

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