Neoen Australia has energised the second stage of its 540MWh Western Downs battery energy storage system (BESS) in Queensland, completing the milestone six weeks ahead of schedule.
The 270MW/540MWh 2-hour duration second stage complements the already operational first stage of identical capacity, bringing the total Western Downs BESS to 540MW/1,080MWh.
It is located in Queensland’s Western Downs region, 22km southeast of Chinchilla, a rural town famed for being the ‘Melon Capital of Australia’. Nearby, developer Akaysha Energy is also building a utility-scale battery storage project: the 150MW/300MWh Ulinda BESS.
As reported by Energy-Storage.news earlier this year, the first stage of the Western Downs BESS started operations in June 2025. Engineering company UGL built both stages of the Western Downs BESS. Tesla supplied its Megapack solution for each phase of the BESS project.
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Neon Australia claims that the combined capacity now makes it the largest battery storage asset with grid-forming capabilities registered in Queensland’s electricity network.
“This major milestone results from the close working relationship in our project team, including Tesla and UGL as well as with Powerlink Queensland and Australian Energy Market Operator (AEMO), and speaks to the collective’s deep expertise and determination in delivering high-quality renewable energy assets – consistently and quickly,” Neoen said in their announcement.
The second stage of the Western Downs BESS was confirmed earlier this year via a 10-year “virtual battery” agreement with Australian energy major AGL Energy.
The agreement permits AGL to virtually charge and discharge up to 200MW/400MWh from the Western Downs BESS. This functionality allows AGL to simulate the operations of a grid-scale BESS, enabling it to charge or discharge whenever necessary.
Grid-forming batteries in Australia
The grid-forming capabilities of the Western Downs Battery represent a critical advancement for Queensland’s electricity network.
These capabilities allow the battery to provide essential grid services such as inertia and system strength that were traditionally supplied by conventional synchronous generators.
As coal plants continue to retire across Australia, such grid-forming battery storage systems are becoming increasingly vital for maintaining system stability.
The Western Downs BESS is expected to provide critical grid-reliability and frequency services as well as firming for renewables, supporting the modernisation of Queensland’s electricity network.
Grid-forming with advanced inverters is a big topic for the Australian battery storage market. The Australian Renewable Energy Agency (ARENA) is providing funding support for a wave of large-scale BESS projects that include smart power electronics equipment, including new builds and retrofitting them to existing projects.
At the recent Battery Asset Management Summit Australia 2025, Dave Bowly, operations manager at Australian utility AGL, noted that grid-scale BESS projects with grid-forming capabilities could be subject to higher standby consumption costs than grid-following batteries.
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