A global energy storage company will spend up to $400 million building a battery storage facility south of Canberra, in a deal expected to increase the ACT electricity grid's resilience to blackouts.
Chief Minister Andrew Barr will on Thursday announce Eku Energy has been selected deliver the next stage of the Big Canberra Battery project, which will be able to power one-third of Canberra for two hours in periods of peak demand.
The 250-megawatt, 500 megawatt-hour battery energy storage system will be built in Williamsdale.
The government said the battery would support the electricity grid during network outages, especially in peak periods.
The battery system would help prevent blackouts as it would be able to back up the grid in a few milliseconds, the government said.
The government expected Eku to begin construction late in 2024 and complete the project in 2025, which the company would develop, build and operate.
The ACT has agreed to pay Eku Energy fixed quarterly payments over a period of 15 years in exchange for a "consequential share" of the revenue the battery generates in the national electricity market.
The government said the revenue-sharing deal was "innovative". The payments are considered commercial-in-confidence and will be redacted in the publicly available version of the contract.
Eku Energy's Asia Pacific director and chief investment officer, Daniel Burrows, said the battery represented a significant milestone for the company, taking it beyond 1 gigawatt-hour of battery storage in Australia.
"Eku Energy is accelerating the deployment of battery assets in Australia by combining deep global expertise in financial and energy markets with our established specialist local business to deliver safe, secure and reliable energy storage solutions in a cost-effective manner for end energy users," Mr Burrows said.
Eku Energy was established in November 2022 by Macquarie Asset Management's green investment group.
Eku Energy holds a pipeline of projects reportedly worth $US2 billion, including a 150-megawatt, 150-megawatt hour project at the decommissioned Hazelwood coal-fire power station site in Victoria.
Mr Barr said the Eku Energy deal was a significant step to deliver the Big Canberra Battery ecosystem.
"When I first announced the Big Canberra Battery project we had three objectives in mind: grow jobs in our renewable energy sector, create a meaningful revenue stream for the territory and improve energy security for Canberrans - this contract delivers on all three of those objectives," Mr Barr said.
"As a combined network, this battery ecosystem can address network constraints, enable more Canberrans to reap solar benefits and present the opportunity for the Territory to reduce costs and generate revenue."
The territory budget in 2020-21 allocated $100 million over a five-year period to deliver the big battery project. ACT Labor committed to the project before the 2020 election.
There will be batteries installed at 14 government-owned sites across the city as part of the second part, following the 250-megawatt battery at Williamsdale. Batteries are planned for sites in Fyshwick, Gungahlin, Belconnen, Chifley, Greenway, Kambah and Stromlo.
The third part will include the delivery of medium-sized neighbourhood batteries. The complete battery system could ultimately power more than one-third of the ACT, the government has said.
Work has already begun on a 100-megawatt, 200-megawatt hour battery near the NSW border, which French energy company Neoen committed to building when it won the ACT government's 2020 renewable energy auction.
Renewable energy storage capacity must grow significantly over coming decades to keep pace with rapidly rising electricity demand, a report from the Commonwealth Scientific and Industrial Research Organisation found last month.
The 200-page Renewable Energy Storage Roadmap report estimates that the national electricity market could require a 10 to 14-fold increase in its electricity storage capacity between 2025-2050.
The report also found that while traditional storage technologies, such as batteries and pumped hydro, would continue to play a key role, all forms of energy storage must be considered to meet Australia's growing demand across multiple sectors including construction and transport.
Renewable energy from wind, solar and hydro supplied an average of 40.3 per cent of power in the national electricity market breaking previous records, a report published by the Australian Energy Market Operator in January showed.
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