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Shell and Edify in landmark big battery storage deal in NSW

Shell Energy and Edify Energy are to build big 100MW, two hour battery storage facility in the Riverina region of NSW in a landmark electricity supply agreement with the state government.

Shell has won a $3.2 billion contract to supply the electricity needs for the state government – hospitals, schools and other buildings, and it appears that the proposed construction of the 100MW/200MWh solar farm next to Edify’s Darlington Point solar farm was a key factor in winning the tender.

The lithium-ion Riverina Energy Storage System (RESS) will be built by Edify alongside its 333MW Darlington Point solar farm, where it will connect into TransGrid’s network at the Darlington Point Substation.

Shell has signed a contract with Edify for a 60MW/120MWh component of the Riverina battery as part of its “firming” offer for the NSW electricity contract, which services hospitals, schools and buildings.

“Energy storage is fast becoming a valued capacity solution for the National Electricity Market, given its fast and precise response,” said John Cole, the CEO of Edify, which built Australia’s first big battery to be located next to a solar farm, the 25MW/50MWh Gannawarra Energy Storage System in Victoria.

“We are proud to be leading the advancement of batteries to shore up the renewable energy market and to increase the availability of clean, green, low-cost, dispatchable electricity.”

NSW energy minister Matt Kean said the government, as the second biggest energy customer in the state, was using its purchasing power to leverage new dispatchable capacity to help power the state’s schools, hospitals, traffic lights and tunnels.

“This battery will help to keep the lights on and keep costs down during peak energy periods, and support more renewable energy to come online,” Kean said. The statement also noted its role in helping replace the capacity lost through the closure of the Liddell coal generator in 2023.

For Shell, the deal represents a major coup and a landmark step for the oil major’s long term goal to challenge Australia’s incumbent utilities and establish itself as a major electricity supply.

The NSW contract was previously shared by Origin Energy and ERM (now owned by Shell). Shell has now grabbed the “large building” part of the 1.8 terrawatt hour a year contract with NSW, and it reinforces its position as the biggest “dedicated” supplier of electricity to business in the market.

Shell Energy CEO Greg Joiner said the long-term services agreement model underpinning the Riverina battery would provide a blueprint for how large energy users could access dispatchable power like battery storage.

“Shell Energy recognises that batteries have an important role to play in transitioning to and managing risk in a lower carbon energy future,” Joiner said.

“This long-term services agreement is a model for how large energy users can access dispatchable power like battery storage, which complements renewables, while contributing to a cleaner and more resilient power system.”

Shell operates a gas generator in Queensland and is building the 100MW Gangarri solar farm in that state, while Edify has developed more than half a dozen large scale solar farms with total capacity of more than 770MW.

The Riverina battery, due to come online in 2023, is one of more than a dozen big battery projects currently being built or proposed in NSW, the country’s biggest state grid.

So far, only one big battery in NSW – the 50MW/75MWh Wallgrove battery in western Sydney – is under construction, but others are close to finalisation.

Source: RenewEconomy