The Victorian government has awarded a contract to the French-based renewable energy producer Neoen, to build the largest battery in Geelong, Australia. Tesla will build the 300 MW/450 MWh battery using the new 3 MWh Megapacks, which can deliver a major peaking plant four times quicker than traditional fossil fuel projects. The cost of the project is yet to be decided, but it will receive a service charge of AUD12.5 million per year for a 250 MW/ 125 MWh component under a 10-year contract with the Australian Energy Market Operator (AEMO).

This is Tesla and Neoen’s second such project in Australia. The “Big Tesla Battery”, as the first project is popularly known as, originally had a capacity of 100 MW/129 MWh with Tesla Powerpacks until it was recently expanded by adding 50 MW/64.5 MWh of capacity at the site — bringing the total to 150 MW/193.5 MWh. It provides the same grid services as gas peaker plants, but cheaper, quicker, and with zero emissions through its battery system.

Like its first project, Neoen is going to own and operate the battery system, which they are going to buy again from Tesla. The battery’s key function as part of Victoria’s System Integrated Protection Scheme will be to provide grid security and increase operating capacity on the main transmission link between Victoria and New South Wales (NSW).

In order to facilitate the project financially, the Australian Energy Market Operator (AEMO) has already reserved a large capacity from the project. “Under the contract, AEMO will reserve 250 MW from Neoen’s 300 MW battery to operate in a control scheme to increase the capability of the Victoria to New South Wales Interconnector (VNI) and respond to unexpected network outages in Victoria from November 2021.” AEMO’s Managing Director and CEO, Audrey Zibelman said, “AEMO’s competitive procurement and evaluation process attracted significant interest and a positive outcome for Victorians. Neoen’s solution, developed with Tesla and AusNet Services, on a unit cost basis, was a significantly more cost competitive and attractive market response than other major battery developments in Australia.”

The battery is planned to be operational by end-2021.