A new tender has been launched by the New South Wales government for a new big battery that will help replace the capacity that will be lost when the country’s biggest coal generator, Eraring, closes in 2025.
The tender is officially for firming capacity of at least 380MW and two hours storage, and is open to a bunch of different technologies, including hydrogen electrolysers, gas peaking stations, but battery storage is probably the best bet for that particular mandate, and the tight timeline.
Demand management options – such as (voluntarily) dialling down the consumption of a big refinery, or multiple other customers – are also expected to be bid into the tender, but this might only be for a part of the capacity sought.
It will be the second of around 20 tenders being conducted by the New South Wales government as part of its renewable infrastructure roadmap that seeks to secure enough new wind and solar, plus long term storage, to replace the five big coal generators that will likely close in the coming decade.
This tender is a bit of a one off, as it seeks firming capacity that is not long term storage, and is designed  to fill in a specific gap from the closure of the 2.8GW Eraring – currently set for August, 2025 – that was identified by the Australian Energy Market Operator last year.
There is already speculation that the closure of the last of the four 720MW generating units at Eraring may have to be delayed beyond the proposed August, 2025 closure date if not enough replacement capacity is built.
Much of that speculation was driven by AEMO’s recent Electricity Statement of Opportunities, which identified a potential breach of the reliability standard, but it stipulated that this forecast was based only on the assumption that planned tenders like this one did not go ahead.
In effect, it merely underlined the necessity of these auctions to go ahead.
However, Eraring’s owner Origin Energy is keeping its options open, and the NSW Labor opposition has even suggested it may buy Eraring, and keep it running for longer, if it wins the state election to be held later this month.
The NSW Coalition government has already commissioned one big battery, the Waratah Super Battery, which at 850 MW and 1680MW will be the most powerful in the southern hemisphere.
But the role of the Waratah Super Battery is primarily to act as a “shock absorber” to the grid and allow more generation to be fed into the major load centres such as Sydney, Newcastle and Wollongong.
The first tender attracted more than 5.5GW of wind and solar projects and more than 2.5GW of long duration storage – around six times the amount sought in the first tender. The results of that tender should be finalised in coming months.
The battery sought in this new tender will be locked into a year long contract that will require it to ensure it is available “for at least 90% throughout the year” and able to respond to an actual lack of reserve condition (LOR) 3 event (when AEMO has run out of supply options to meet demand) with a defined minimum bid.
Demand response proposals will also need to respond to an actual lack of reserve condition (LOR) 1, 2 and 3 event with a defined minimum bid.
The likely winner will be a battery storage project that is already under development and has secured a connection approval. It may be that it will be part of a bigger project, with extra capacity focused on other parts of the market – like the Victoria Big Battery near Geelong.
The tender will officially open on April 3, and will close on May 18. Financial offers will be requested in June, and due in July, with a winner to be revealed in September. The project must be complete by December 1, 2025, in time for the summer peak.
