French independent power producer (IPP) Neoen has secured AU$1.4 billion (US$890 million) in capital to help fund energy storage and renewable energy generation projects in Australia.
The financing was provided by international banks KfW IPEX-Bank, Mizuho, MUFG, SMBC, Societe Generale, Bank of China, The Hong Kong & Shanghai Banking Corporation, ING, ANZ, Westpac, and Australia’s Clean Energy Finance Corporation (CEFC).
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Neoen, which is set to be acquired by Canadian asset manager Brookfield, confirmed today (18 December) that the capital raise would support its existing 66MW Parkes, 36MW Griffith and 28MW Dubbo solar PV plants in New South Wales, alongside the 157MW Kaban Green Power Hub in Queensland, comprising wind generation. It will also be distributed across Australia to develop an additional 1.3GW of renewable energy generation and energy storage capacity.
Although not all projects were named, the CEFC stated that its AU$100 million would be allocated to the 341MW/1,363MWh Collie Battery Stage 2 in Western Australia, the 270MW/540MWh Western Downs Battery Stage 1 in Queensland, and the 440MW Culcairn solar PV plant in New South Wales. It is worth noting that the Culcairn solar PV plant has the option to add a 100MW battery energy storage system (BESS) at a later date.
Neoen Australia’s CEO Jean-Christophe Cheylus believes the financing underlines the “unique depth of Neoen’s Australia portfolio”.
“It serves to strengthen our owner operator business model and provides us with a solid foundation for future growth,” Cheylus added.
The Collie and Western Downs energy storage systems
The Collie Battery Stage 2 development started construction in April 2024 with contractors Tesla and UGL, an engineering, procurement and construction (EPC) firm behind its erection. It is expected to be completed in 2025.
The Collie BESS will be connected to the South-West Interconnected System (SWIS) grid in Western Australia, with the second phase set to complement the first stage, which saw a 219MW/877MWh BESS installed. Neoen has approval to scale the Collie Battery to a 1GW/4GWh system.
Neoen will also allocate the funding to its 270MW/540MWh Western Downs Battery Stage 1 development adjacent to a 460MWp ground mount solar PV power plant. Tesla and UGL are also involved in the development of this BESS.
The BESS was initially a 200MW/400MWh system before a 10-year “virtual battery” contract signed with Australian energy major AGL Energy increased its size to 270MW/540MWh.
The agreement allows AGL to virtually charge and discharge up to 200MW/400MWh of the Western Downs Battery. This enables AGL to replicate the functions of a grid-scale battery, allowing it to charge or discharge the battery at any time and supporting the stability of supply to the grid.
Neoen hopes the stage one BESS will come online in early 2025 during the Australian summer. The stage two BESS is expected to be operational in July 2026. The combined capacity will reach 540MW/1,080MWh.
Neoen is recognised as one of the largest renewable energy companies in Australia, with around 4.3GW of assets currently in operation or under construction.
To ensure that the Brookfield takeover can go ahead, the company agreed to sell its operational and development projects in Victoria, including the 350MW/450MWh Victorian Big Battery, for AU$950 million.
The Victoria portfolio was sold to ASX-listed alternative asset manager HMC Capital in a move to comply with the Australian Competition and Consumer Commission (ACCC).
