This extract is from a recent report by Climate Energy Finance. The report highlights the rapid progress in Australia’s electricity sector transition, emphasising that the nation is on track to achieve its ambitious target of 82% renewable energy by 2030. It underscores the pivotal role of sustained investment, strong policy support, and streamlined planning, evaluation, and approval processes. In particular, it highlights the growing importance of Battery Energy Storage Systems (BESS) in ensuring grid stability and supporting the integration of renewable energy into the electricity network.
Many incumbent energy lobbyists highlight the grid reliability risks of integrating ever more variable renewable energy projects. The technology improvements, manufacturing scaling up, commodity price reductions and resulting BESS deflation over 2024 has been staggering, and really underpins the credibility and deliverability of Australian Energy and Climate Minister Chris Bowen’s 82% by 2030 target. Goldman Sachs estimates global battery prices dropped from US$153/kWh in 2022 to US$149 in 2023, and US$111 in 2024, driven by rapid technology investment, the economies of scale from the ongoing global capacity expansion and dramatically lower critical minerals commodity prices. By 2026, Goldman Sachs forecasts prices will have dropped 50% to reach US$80/kWh, achieving BEV-ICE cost parity in the US on an unsubsidised basis. The global uptake of BESS is staggering, and highly complementary to the low cost and zero emissions but intermittent nature of renewable energy. The global uptake of BESS is staggering, and highly complementary to the low cost and zero emissions but intermittent nature of renewable energy.
Figure: Global Battery Pack Prices Continue to Fall (US$/kWh)
Bloomberg NEF expects a massive 76% jump in global storage installations to 69GW / 169GWh in 2024, and for a tenfold expansion in global BESS storage by 2035 to reach 228GW / 965GWh, led by China, with the US a distant second. The US is now adding utility-scale BESS at an unprecedented pace, having installed more than 20GW of battery capacity to the electric grid, with 5GW of this occurring just in the first seven months of 2024, according to the US Energy Information Administration (EIA). This means that battery storage equivalent to the output of 20 nuclear reactors has been bolted on to America’s electric grids in barely four years, with the EIA predicting this capacity could double again to 40GW by 2025.
Australian BESS Momentum
Momentum in BESS deployments in Australia has lifted dramatically in 2024. The volume of large-scale BESS under construction in Australia passed that of solar and wind projects combined in 2023 and the trend has intensified this year, with batteries attracting federal support. As coal-fired power plants are shuttered, developers and suppliers are enjoying a battery bonanza, with Rystad Energy has said that 4.9GWac / 13GWh of utility-scale BESS entered construction in 2024. As of October 2024, BloombergNEF records 7.8GW of utility-scale BESS currently under construction in Australia. It says installed big battery capacity will grow from 1.7GW today to 18.5GW in 2035. CEF predicts this 18.5GW will be rapidly upgraded and pulled forward as low cost intermittent renewable energy increasingly dominates the NEM and drives wholesale prices negative increasingly frequently. So increasingly, batteries are being built to participate in the wholesale market to arbitrage prices. As a consequence, we’re seeing bigger batteries.” And Australia’s big batteries are getting bigger, with storage capacities rising from one hour to two, four, and even eight hours. BNEF says a “tsunami of rooftop solar” and utility-scale solar has “reshaped power price dynamics in Australia” and as a result the arbitrage opportunity, with wholesale prices below zero for 9% of the time in the NEM in 2023, for big battery storage systems has become compelling.
November 2024 saw AEMO’s 2024/25 Summer Readiness Report. The key risk is unavailability of thermal power plant capacity, including the potential delayed return to service of the 12 thermal units off line in 4QCY2024 around Australia. A key point of difference versus a year ago is that this summer there are 3,175MW of new generation and BESS projects that have been commissioned to full output in the NEM since September 2023, including 750MW BESS. If only Australia had used the last decade to act with urgency at scale to build out more firmed VRE knowing that end of life coal clunkers were increasingly unreliable, particularly at times of high temperatures accentuated by climate! The challenge is that the Federal Opposition’s nuclear fantasies will massively undermine the momentum being built. It is noteworthy that despite the claims of the opposition, former coal-fired power plant sites are already attracting large-scale battery projects due to their electricity infrastructure. AGL is building the 1GWh Liddell Battery Project in NSW, in May 2024 the state-owned generator in Queensland announced it was doubling the size of its Stanwell Clean Energy Hub battery, to 1.2GWh, and the Collie Battery in Western Australia is planned to have an eventual 1GW / 4 GWh scale, including a 877 MWh first stage.
Utility BESS project Capex in Australia: With rooftop solar sending midday prices negative, battery developers are being paid to charge up in the middle of the day. And with a steady 3 GW of new rooftop solar every year, this arrangement will continue for a while, until there is enough midday demand to raise prices. Australia’s first grid scale battery was the 100MW/108MWh Hornsdale Power Reserve in South Australia. This was commissioned in 2017. In the seven years since then, Australia’s main grid has installed a total of 1,813MW / 2,570MWh of battery storage. There are already enough battery projects being commissioned at the moment to roughly double this. And as of December 2024, there are another 6,110MW / 15,712MWh of batteries that are already under construction. Batteries are quick to deploy, so these are all likely to be complete within 1-2 years
The Tidal Wave of BESS across Australia
West Australia
17 November 2024 saw Western Australia’s main electricity grid hit a new renewable energy record, with renewables peaking at 85.1% of energy on the South West Interconnected System (SWIS), and an average 46.5% renewables share for the November 2024 month. The biggest threat to grid reliability is often thought to be a lack of supply at the times of peak demand, but the enormous growth of rooftop solar PV across Australia has led to a new challenge at the other end of the spectrum – not enough demand at times of peak supply. The arrival of big battery projects in the SWIS is already addressing one of the key vulnerabilities facing the country’s, and the world’s, biggest isolated grid – ever diminishing minimum demand levels. The first big battery to be connected to the SWIS, the 100MW /200MWh Kwinana stage 1 facility, is already addressing the issue, and this risk will be further reduced with the imminent commissioning of its bigger 200MW / 800MWh second stage Kwinana battery, and then Neoen’s 560MW / 2,240MWh BESS in Collie, as well as the Collie BESS, which is due to come online in 2025.
West Australia – Collie BESS – Neoen
November 2024 saw the first stage of the Collie BESS, a 219MW / 877MWh by Neoen has entered operation, ahead of schedule. Phase 2 will see this BESS increase to 560MW / 2,240MWh, making it the biggest in the country, and one of the biggest in the world.
West Australia – Collie BESS – Synergy
October 2024 saw the first CATL battery units installed at Synergy’s 500MW / 2,000MWh BESS under construction at Collie, with commissioning due in 2025.
West Australia – Kwinana BESS – Synergy
November 2024 saw that building on the commissioning of the 100MW/200MWh first stage of its Kwinana BESS in 2023, Synergy completed construction of the $661m 200MW/800MWh second stage, with full commission due in 2025.
West Australia – Kemerton BESS – Trinasolar
December 2024 saw Perth council approve Trinasolar’s proposed $400m, 660MW / 2,640MWh BESS at the Kemerton Strategic Industrial Area, repurposing an end-of-life sand mining site. October 2024 saw the project given “critical project status” by Energy Policy WA and Western Power
West Australia – Wellesley BESS – Sunrise Energy
October 2024 saw Sunrise Energy announce a proposed $200m 100MW / 400MWh BESS at Wellesley, WA.
West Australia – Cunderdin hybrid Solar & BESS – Global Power Generation (GPG)
December 2024 saw Global Power Generation (GPG), jointly owned by Spain’s Naturgy and the Kuwait Investment Authority, secure a $2.3bn financing platform that will support the continued development of its 1.8GW portfolio of renewable energy and BESS assets in Australia.
Other Recent Major Australian BESS Announcements
Joel Joel BESS – ACEnergy
August 2024 saw ACEnergy’s $250m 350MW / 700MWh Joel Joel BESS given Victorian government approval after just nine weeks, under an accelerated Development Facilitation Program (DFP) launched by the Allan Labor government in March 2024, making proposed wind, solar and battery projects eligible for an accelerated development pathway.
Renewable Energy Park Horsham – SEC & OX2
November 2024 saw the commencement of construction of the $370m 119MW solar and 100MWh BESS Renewable Energy Park in Horsham, Victoria. The Victorian Government’s SEC acquired the proposal from OX2 in September 2024.
Melbourne Renewable Energy Hub – SEC & Equis
November 2024 saw Victoria’s SEC, in partnership with Equis Australia, reach half way in building out its $1.2bn 600MW / 1600MWh BESS known as the Melbourne Renewable Energy Hub, with commissioning due late 2025.
BESS – HMC Capital
December 2024 saw ASX-listed HMC Capital (AuM $19bn) acquire Neoen Australia’s renewables and BESS portfolio (652MW operating, and a 2.8GW development pipeline) across Victoria for $950m as part of the ACCC requirements to approve Canada’s Brookfield acquisition of France’s Neoen.
South Australia
Bungama BESS – Amp Energy
October 2024 saw Canada’s Amp Energy commence construction of its Bungama 150MW / 300MWh BESS at Port Pierre, South Australia as part of a wider $2bn Renewable Energy Hub SA.
Access the report here
