First transactions made using Renewable Energy Hub’s ‘Virtual Storage’ contract in Australia

By Molly Lempriere
Share on linkedin
Share on twitter
Share on reddit
Share on facebook
Share on email
Image: Renewable Energy Hub.

Renewable Energy Hub has announced the first transactions as part of its new ‘Virtual Storage’ electricity swap contract in Australia.

The financial instrument allows participants to buy and sell stored electricity, helping them to set spread between charge and discharge price from both battery storage and pumped hydro energy operators.

Energy supplier Hydro Tasmania has now used the tech company’s platform for sell power to the Macquarie Group and ERM Power.

Chris Halliwell, co-founder and head of markets at Renewable Energy Hub said that as energy markets change, financial markets are changing too.

“The Virtual Storage contract enables merchant storage operators to de-risk their energy arbitrage revenue, to move beyond complete exposure to spot prices and hedge their risk and capture more attractive revenue options in the forward market.”

Virtual Storage’s first transactions involved Hydro Tasmania selling the rights to the highest priced ‘discharge’ energy periods, as well as buying a fixed MW block of low-priced ‘charge’ energy, for the 2022 financial year.

Both charge and discharge periods are set to be the same MWhs, with a transaction price agreed for both bought and sold legs.

“The benefits of deep storage, currently being progressed as part of the Battery of the Nation initiative, are well understood in the context of providing firming capacity that will be needed as the energy market transitions and variable renewable energy becomes the dominant source of supply,” Hydro Tasmania executive general manager of commercial, Caroline Wykamp.

“The Virtual Storage hedge contract demonstrates the value of such trades to the financial market and that further liquidity in such trades can support investment needed to develop pumped hydro and other storage technologies that will ultimately support Australia’s renewable energy future – it’s a win-win.”

As most storage comes on the grid in Australia, the need to be able to effectively trade stored energy effectively is expected to become essential to capture reventue. Utilisation of Renewable Energy Hub’s Virtual Storage contract will grow over coming years therefore the company noted.

Virtual Storage is the latest project developed by the Renewable Energy Hub as part of an Australian Renewable Energy Agency (ARENA) funded project to develop a suite of innovative, standardised hedge contracts.

Read Next

April 6, 2022
The government of Western Australia is funding work to assess a potential battery energy storage system (BESS) project which would be the biggest built in the state so far.
March 30, 2022
A 100MW/200MWh battery energy storage system comprising Tesla Megapacks will be built by a state-owned power company in Queensland.
September 6, 2021
A five-year long project to trial the use of energy storage at community-scale in a Western Australian suburb achieved an 85% reduction in consumption of energy from the grid at peak times for participating households. 
August 20, 2021
Batteries will be mounted on electricity poles across the low voltage distribution network and aggregated as a virtual power plant (VPP), in a project which will trial their ability to integrate more renewable energy in two regions of Victoria, Australia. 
March 25, 2020
In the past couple of weeks, national and state government organisations in Australia have announced various stages of development for solar projects with a range of advanced and innovative storage solutions attached.

Most Popular

Email Newsletter