Neoen to build its first long duration battery after winning a 197 MW contract in Western Australia

Neoen (ISIN: FR0011675362, Ticker: NEOEN), one of the world’s leading producers of exclusively renewable energy, has been awarded a 197 MW / 4 hour capacity services contract by the Australian Energy Market Operator (AEMO) in a competitive tender initiated by the Western Australian Coordinator of Energy. The service will be delivered by Stage 1 of Collie Battery sized at 219 MW / 877 MWh and consisting of 224 Tesla Megapack 2XL units. The project, which Neoen originated in 2021, received development approval for a total of 1 GW / 4 GWh in December 2022. The battery will be located near the town of Collie, on the country of the Wilman people of the Bibbulmun nation, in the South West region of Western Australia (WA). It will connect to Western Power’s Shotts Terminal substation, which is part of the South-West Interconnected System (SWIS), a separate network to the one on the eastern coast of Australia. 

Neoen has provided notices to proceed to Tesla and construction contractor UGL (a member of the CIMIC Group) signalling the start of construction for Stage 1 of Collie Battery. It is expected to be operational in Q4 2024. The battery is Neoen’s first major project in WA and will also be its first 4-hour long duration battery globally. It is a good illustration of Neoen’s strategy to intensify its investment in storage through extended duration, enabling it to unlock greater value from its batteries. Long duration storage is increasingly needed in the transition to higher penetrations of renewable energy. 

The AEMO Non-Co-optimised Essential System Services (NCESS) contract will run for a period of two years from 1st October 2024. It will provide 197 MW of storage capacity for 4 hours, charging during the day and then discharging across the evening peak. This is intended to address the risks AEMO has identified relating to the retirement of coal power plants and increasingly high penetration of rooftop solar in Western Australia. 

Collie Battery will deliver a significant economic boost to the Shire of Collie, as part of the region’s energy transition, creating over 120 construction jobs and opportunities for local suppliers. The project will have an annual community benefit-sharing program, co-designed with the local community. 

Collie Battery is Neoen’s sixth big battery in Australia, bringing its total Australian storage assets to over 1.1 GW in operation or under construction, and further cementing its position as the country’s leading developer, owner and operator of batteries. It already owns and operates the 300 MW / 450 MWh Victorian Big Battery in Geelong and the 150 MW / 193.5 MWh Hornsdale Power Reserve in South Australia, whilst its 100 MW / 200 MWh Capital Battery, 200 MW / 400 MWh Blyth Battery and 200 MW / 400 MWh Western Downs Battery are all currently under construction. 

Louis de Sambucy, Neoen Australia’s CEO, said: “We are delighted to have won a NCESS contract and would like to thank AEMO, Western Power and the WA Government for placing their trust in us. This is an exciting time for Neoen as it is our first major project in WA, and it also means we now have a big battery in five of the six Australian states. With our growing team in Perth and a strong pipeline of projects we look forward to playing an increasingly significant role in the state’s rapid decarbonisation.”

Jai Thomas, Energy Policy WA’s Coordinator of Energy, said: “The NCESS process run by AEMO was created through the WA Government’s Energy Transformation Strategy, and it is great to see Neoen’s Collie Battery progress as a result of these reforms. Big batteries like this one will help balance the needs of the energy system by enabling us to take advantage of more of our plentiful renewable energy resources.”

Daniel Westerman, AEMO CEO, said: “As Western Australia’s major electricity system transitions away from coal-fired generation, critical investments are needed in low-cost renewable energy backed by firming generation, such as batteries and gas, and augmentation of the transmission network. Neoen’s Collie Battery, procured through AEMO’s NCESS process, will provide consumers with energy security and reliability during the transition to firmed renewables.”

Sam Barbaro, Western Power’s CEO, said: “Western Power is working collaboratively with proponents to ensure that we expedite the transition of our network to a sustainable energy system that paves the way for community and industry to reach their decarbonisation goals. Connecting renewable energy solutions, such as Neoen’s large scale battery, are critical to unlocking a cleaner energy future, that allows renewable resources to be effectively harnessed and utilised to meet the community’s power needs now and into the future.”

Councillor Sarah Stanley, Shire of Collie’s President, said: “We are very proud to continue our long history of powering the state. Renewable energy infrastructure, such as Neoen’s big battery, is a key factor in the attraction of new, innovative and sustainable industries that will cement Collie’s place as an important industrial hub, providing worthwhile employment opportunities for generations to come.”

Xavier Barbaro, Neoen’s Chairman Chief Executive Officer, concluded: “I would like to congratulate the Neoen team on achieving this excellent outcome in record time. This project perfectly demonstrates our ability to rapidly provide solutions to the market and we are thrilled to start delivering longer duration battery services. Neoen is incredibly proud to be one of the world’s true pioneers in battery storage, with a global portfolio of over 1.3 GW / 2.6 GWh, and to be making a major contribution towards a more sustainable energy future.”