Six Large-scale Battery Projects, Led by 3.5 GWh System Approved In Australia

The New South Wales government has awarded contracts to six new large-scale battery energy storage (BESS) projects, including what will become the largest battery in Australia to date. The move strengthens the foundations of a power system preparing to operate without coal-fired generation.

The government described the process as the biggest and most successful battery tender of its kind, citing both the scale of projects awarded and the sharp decline in battery costs reflected in submitted bids. The projects must be completed by the end of the decade and are intended to support a grid that is increasingly reliant on renewable energy. With some of the fastest execution times seen for many of its large battery projects, the new awards continue to ensure Australia remains a leading place for large batteries. 

Great Western Battery to become Australia’s largest

The flagship project from the tender is the Great Western battery, a 300 MW / 3,500 MWh facility to be developed by Neoen Australia. The project will be built at the site of the former Wallerawang coal-fired power station near Lithgow, symbolically replacing coal infrastructure with long-duration energy storage.

Neoen currently owns and operates Australia’s largest battery, the 560 MW / 2,240 MWh Collie battery in Western Australia. That record is expected to be surpassed in the coming years by the Supernode and Eraring batteries as they complete later expansion stages. 

However, once completed, Great Western will assume the title of the largest battery in the country, even as other larger projects move through development pipelines.

The growing scale of battery projects reflects falling battery cell prices and rising demand for storage that can cover evening peak demand and periods of low wind and solar output.

Other battery projects awarded under the tender

In addition to Great Western, the NSW government announced five other winning projects across regional New South Wales:

• Bannaby battery in the Southern Tablelands, developed by BW ESS, sized at 233 MW / 2,676 MWh

• Bowmans Creek battery in the Upper Hunter, developed by Ark Australia, sized at 250 MW / 2,414 MWh

• Armidale East battery, developed by FRV Services Australia, sized at 158 MW / 1,440 MWh

• Kingswood battery near Tamworth, developed by Iberdrola Australia, sized at 100 MW / 1,080 MWh

• Ebor battery near Armidale, developed by Bridge Energy with a buy option for Energy Vault, sized at 100 MW / 870 MWh

All six projects are scheduled for completion by 2030.

Longer Duration Designs to Manage Degradation

Several of the batteries have been designed with storage durations exceeding eight hours to ensure that usable capacity remains at the required eight-hour level throughout the 14-year contract period, even as batteries degrade over time.

Some projects, such as Armidale East, may ultimately be built at larger sizes to serve additional markets. Except for the Ebor battery, most projects originally entered development as four-hour batteries before being expanded in response to market opportunities and lower battery prices.

“These six big batteries mean we’re on track to smash our storage targets, harvesting the sun and the wind, so we can power NSW around the clock and put downward pressure on prices,” NSW energy minister Penny Sharpe said in a statement.

“We’re not stopping here – NSW will support more projects, so we’re ready for a grid powered by renewable energy, supported by gas.”

Together, the six projects add around 1.2 GW of power capacity and 12 GWh of long-duration storage, exceeding the original tender target of 1 GW and 8 GWh.

They follow the previous long-duration storage tender announced a year earlier, which contracted 13.7 GWh of capacity. That earlier round was dominated by the Phoenix pumped hydro project, which alone accounted for 12 GWh.

The latest tender results highlight the growing ability of battery storage to deliver much longer duration energy than previously expected. This is increasingly important as pumped hydro projects face significant delays and rising civil construction costs.

“This project will provide firm and dispatchable energy over extended periods, enable longer duration energy shifting, and make a decisive contribution toward the decarbonisation objectives of both the state and the country,” FRV Australia country head Carlo Frigerio said in a statement.

LTESA costs fall sharply year-on-year

According to tender results and a market briefing paper released by ASL, which managed the process, the total cost of Long Term Energy Service Agreements (LTESAs) has declined significantly compared with last year.

While individual project bids remain confidential, ASL reported that the average annual annuity cap — representing the government’s maximum financial exposure — has fallen to USD 150,000 per MW and USD 14,000 per MWh.

This compares with USD 180,000 per MW and USD 23,000 per MWh in the previous battery storage tender. Although battery storage costs remain higher on a per-MWh basis than pumped hydro and advanced compressed air storage tenders, which averaged around USD 11,000 per MWh, the overall cost is lower due to the shorter contract duration of 14 years, compared with 40 years for those technologies.

“It’s encouraging to see that proponents are continuing to utilise and value the flexibility of the LTESA product to suit their project’s needs,” ASL CEO Nevenka Codevelle said.

“We’re about to see the first LDS projects contracted through these tenders come online. These are eight-hour-plus storage projects that would not otherwise have reached financial close or delivered energy for NSW consumers,” Codevelle added.

NSW storage targets set to be exceeded

With these awards, New South Wales is now on track to comfortably meet its 2030 target of 2 GW and 16 GWh of long-duration storage. This is also a positive step toward the state’s expanded 2034 target of 42 GWh of long-duration storage as it prepares to retire its remaining coal-fired power generators.

Looking ahead, another tender for 12 GWh of storage is expected to be launched within the next few months. The results of a separate tender for 500 MW of dispatchable capacity are due in May, while another long-duration storage tender is planned for 2027. In parallel, two large-scale generation tenders of 5 GW each are scheduled to be held later this year.