Neoen expands Western Downs battery & virtual deals

Neoen has begun construction of the third stage of its Western Downs Battery in Queensland and has completed the second stage ahead of schedule, expanding what it says is now 2 GW of large-scale battery storage in Australia in operation or under construction.

The company has issued notices to proceed to Tesla and contractor UGL for Western Downs Battery Stage 3. The new phase will add 305 MW and 1,220 MWh of storage at the Western Downs Green Power Hub near Chinchilla.

Stage 3 will use 312 Tesla Megapack 2XL units. It will connect to Powerlink's Western Downs substation through existing grid infrastructure at the site.

The battery will provide four hours of storage. Neoen expects Stage 3 to start operating over the Australian summer of 2027 and 2028.

Western Downs Battery Stage 3 will be the fourth asset in the Western Downs Green Power Hub. The hub already includes a 460 MWp solar farm and the first two stages of the battery, each rated at 270 MW and 540 MWh.

Neoen said Stage 3 will use grid-forming technology. This technology can improve stability on the electricity network.

Stage 2 completed

The company has completed construction of Western Downs Battery Stage 2. This second stage has 270 MW of power and 540 MWh of storage.

Stage 2 is now operating alongside Stage 1. The combined capacity of the first two stages is 540 MW and 1,080 MWh.

Neoen said Stages 1 and 2 are providing grid reliability, frequency control and firming services to the National Electricity Market. Both stages use grid-forming inverters that support system strength and can reduce dependence on coal and gas generators in Queensland.

Once Stage 3 enters service, Western Downs Battery will have a total capacity of 845 MW and 2.3 GWh. This will extend the role of the hub in the state's energy transition.

Virtual battery deals

The project has also become a platform for so-called virtual battery contracts with retailers and large energy users. These contracts allow customers to hedge their electricity exposure through a financial product linked to the physical battery.

Neoen said it has delivered Stage 2 in time to meet virtual battery contracts with AGL Energy and Shell Energy. These contracts allow clients to charge and discharge the battery on a virtual basis. The clients do not need to build or operate their own storage assets.

The company has now signed two further virtual battery agreements with ENGIE. The first ENGIE contract covers 25 MW and 50 MWh of two-hour storage and is backed by Stage 2. The second covers 50 MW and 200 MWh of four-hour storage and will be backed by Stage 3.

Neoen said the two contracts increase ENGIE's contracted virtual battery portfolio. ENGIE can use this portfolio to manage variability in its renewable generation and changing demand from its customers.

Jean-Christophe Cheylus, Neoen Australia's CEO, said the new construction start and contract signings marked a milestone for the group.

"I congratulate the team on achieving these milestones. The launch of this new 4-hour battery at Western Downs further highlights Neoen's innovation and leadership in big batteries and takes us past 2 GW of storage capacity in Australia. We're delighted to have signed two new contracts with Engie, and I thank them for placing their trust in us once more. Stage 3 of Western Downs Battery is our 7th storage project with Tesla and UGL and we look forward to switching it on together soon. Lastly, our continued success in the region would not be possible without the support of Powerlink, AEMO, the local community and Western Downs Regional Council," said Cheylus.

Growing storage fleet

The latest expansion lifts Neoen's total big battery portfolio in Australia. The company said it now has 2 GW and 6.4 GWh of storage either operating or under construction, which it says makes it the largest owner and operator of large batteries in the country.

Neoen's Australian storage assets include the Collie Battery in Western Australia. The company describes Collie as one of the world's most powerful large-scale storage systems, with 560 MW and 2,240 MWh.

Jules Dufournier, ENGIE Australia's Head of Energy Management & B2B, said the new contracts expand its use of financial products linked to storage.

""We are delighted to sign our second and third virtual battery agreements with Neoen, showcasing ENGIE's ability to trade innovative derivative products that create real value for our customers. This agreement complements our existing battery portfolio which is under construction in South Australia - enabling us to offer shaped products and tailored solutions that meet our clients' specific needs. By combining market innovation with flexibility, ENGIE continues to help customers achieve their sustainability goals while navigating Australia's dynamic energy landscape," said Dufournier.

Neoen operates close to 200 assets across three continents, including wind, solar and storage projects. The company said its global capacity in operation or under construction stands at 8.5 GW.

Xavier Barbaro, Neoen's Group CEO, said the Western Downs hub is central to its plans in Queensland and beyond.

"We are proud to be making an ongoing contribution to Queensland's energy future through the expansion of our Western Downs Green Power Hub, which will eventually consist of 1.3 GW of capacity across solar and storage. This expansion is underpinned by the strength and value of our virtual battery solution, and we are delighted to count Engie among our customers. Western Downs provides us with an inspiring template for growth in other regions, as we continue to accelerate the pace of the energy transition in Australia, and around the world," said Barbaro.