Australian utility AGL signs ‘virtual’ agreement for Neoen’s 100MW Capital Battery

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Neoen has been contracted by major energy generator-retailer AGL to provide a “virtual” charge or discharge of a battery system in Australia. 

The France-headquartered renewable energy and energy storage developer announced the deal today. A 70MW/140MWh portion of the energy stored in its 100MW/200MWh Capital Battery project, currently under construction in Canberra, will be leveraged by AGL.

What’s perhaps novel about the arrangement is that AGL will use it to participate in the National Electricity Market (NEM) from its connection in New South Wales, a completely different state from the Australian Capital Territory (ACT) where the Capital Battery is being built.

It’s the first deal of its type for what Neoen Australia CEO Louis de Sambucy described as an “innovative bespoke solution”.

“The virtual battery is an ideal firming tool which will become a core Neoen product and a key element in the success of our expanding range of client offerings.”

AGL chief operating officer Markus Brokhof said the deal will enable the company to add “flexible capacity that meets the energy needs of our customers to ensure they continue to have access to affordable and reliable energy”.

AGL will be able to virtually charge or discharge over the five minute settlement (5MS) trading intervals recently introduced into the NEM, helping it to counteract the growing duck curve of mismatch between times of plentiful solar generation and demand for energy as well as the evening peak demand periods. 

Neoen has raced into a leading position as a developer and owner of grid-scale battery energy storage system (BESS) facilities in Australia, from executing the landmark 150MW/193.5MWh Hornsdale Power Reserve in South Australia to its recently completed 300MW/450MWh Victorian Big Battery

With its Australia battery portfolio now including 576MW in operation or under construction, the Capital Battery was awarded as a contract to Neoen by the ACT state government. Construction of it began in December last year and it is scheduled for completion in H1 2023.

AGL’s 70MW virtual agreement is under a seven-year contract and Neoen emphasised that the Capital Battery will remain able to provide network services as agreed through the ACT tender. 

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