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Australia’s first unsubsidised big battery installed in South Australia

By Michael Mazengarb – RenewEconomy – 27 June 2019

Australia’s first unsubsidised big battery has been installed at Lincoln Gap near Port Augusta, in a major milestone for Australia’s clean energy sector and the emergence of cost-effective zero-emissions energy storage.

The 10MW/10MWh battery has been installed at the 212MW Lincoln Gap wind farm near Port Augusta, owned by independent project developer Nexif Energy, highlighting the potential synergies between renewable energy and battery storage technologies.

The installation of the battery follows the success of other large-scale battery systems co-located with wind farms in South Australia, including the Tesla big battery at the Hornsdale Wind Farm and the Dalrymple North battery located near the Wattle Point wind farm.

The battery system, which has been installed by Fluence Energy will provide fast frequency response capabilities to the wind farm, allowing the Lincoln Gap wind farm to meet new connection requirements for renewable energy projects in South Australia.

The battery system will also provide frequency control services to the National Energy Market, a service that has proven to be highly lucrative for the Hornsdale Tesla battery.

The $500 million project secured non-subsidised debt finance from the Clean Energy Finance Corporation, and long-term contracts with ERM power and Snowy Hydro for the sale of renewable energy certificates and electricity, respectively.

“As a new, independent participant to the Australian market, we are excited to implement an innovative contracting strategy that will not only provide renewable power to thousands of Australian homes but also optimise the use of grid-scale battery storage on a commercial basis,” Nexif Energy co-CEO Matthew Bartley said following the securing financial close for the project.

The battery system has been installed by Fluence, a joint venture between Siemens and AES, and is a significant milestone for the Australian energy market, demonstrating the financial viability of large-scale battery storage integrated with renewable energy projects.

“This is a trend we see globally, as power networks around the world look at how do they continue to bring in renewables, which are the lowest cost source of energy, with the needs to balance reliability and dispatchability on the grid,” COO of Fluence John Zaharancik told the Australian Energy Storage Conference earlier in June.

“There are many places in the world where we are starting to see requirements for the combination of some firming and some grid management. Whether its frequency control, voltage control or some other requirement, they are increasingly being put on the renewable energy generator as a requirement.

“In this particular case, this combination will help this grid manage this new wind coming into the system better. This is a system that was commercially financed and wasn’t subsidised by a government in any way.”

The development was welcomed by the South Australian government, as it seeks to ensure the state maintains a reliable and secure energy system while leading the country in renewable energy penetration.

“Nexif’s investment in Australia’s first unsubsidised big battery at its $500 million Lincoln Gap project is incredibly significant in the evolution of Australia’s energy market,” South Australian energy minister for Dan van Holst Pellekaan said

“This is another sign that renewable energy is developing to the point where it can compete with traditional energy sources delivering cheaper, more reliable and cleaner energy for South Australians without the need for Government subsidies.”

Bartley welcomed the completion of the battery installation, which the company expects will support the Lincoln Gap wind farm boost South Australia’s supply of renewable energy.

“Once complete, Lincoln Gap will be home to 59 – or 212MW – of wind turbines and 10MW battery storage capable of producing enough electricity to power approximately 155,000 households in South Australia. The construction workforce has ranged from 110 to 140 people,” Bartley said.

Nexif Energy commenced the first generation at the Lincoln Gap wind farm in April, with the remaining wind turbines at the site progressively being commissioned in the following months.

Nexif Energy was able to secure an agreement with wind turbine supplier Senvion, guaranteeing the completion of the Lincoln Gap project, after the German wind turbine manufacturer announced that it would undertake “self-administration proceedings“.

“Nexif Energy has proactively negotiated with Senvion and made successful arrangements to ensure continued progress on the Lincoln Gap Wind Farm while Senvion addresses its financial difficulties and requirements,” Nexif Energy said in a statement at the time.

“These arrangements will be implemented over the coming days and include the provision of funding for Senvion’s on-site subcontractors through direct payment of amounts owing to continue work on the project, which is quickly taking shape.”

The battery project is the second Australian installation for Fluence, after completing a 30MW/30MWh battery installation in Ballarat, as part of an ARENA supported initiative.

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