Australia’s Transgrid launches competitive procurement of battery services in New South Wales
Transgrid launches competitive BESS procurement in NSW
Australian high voltage grid operator Transgrid will host a competitive solicitation for large-scale battery storage resources in areas of New South Wales facing increasing electricity demand.
Transgrid manages and operates the transmission network in New South Wales (NSW) as well as in the Australian Capital Territory (ACT).
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The company is seeking to alleviate load constraints on its network in the Bathhurst, Orange and Parkes region of Central NSW, and the North West Slopes in the north. After considering a range of options, it has determined battery storage to be the technology best suited to mitigate the impacts of those constraints.
The first three areas named are expected to see considerable load growth off the back of increasing mining activity, as well as general load growth, while in the North West Slopes, growing industrial loads and general load growth underpin the need for new capacity and flexibility.
Transgrid will go to the market with its competitive procurement process, before awarding and finalising contracts with successful project bidders.
Batteries were found to be the best option in an assessment study concluded in 2022. Part of the reason for that was the ability to construct and commission battery energy storage system (BESS) assets much more quickly than other proposed solutions, with Transgrid’s Project Assessment Conclusions finding three BESS projects in the regions could be in operation by a 2024-2025 timeline.
As reported by Energy-Storage.news just over a year ago following Transgrid’s release of its findings, a 20MW/40MWh battery system in Parkes and a 25MW/50MWh in Bathhurst were chosen for Bathhurst, Oranges and Parkes. They beat out other third party proposals including a new 132kV transmission line and 25MVa synchronous condenser project.
For the North West Slopes, the preferred proposal included a 50MW/50MWh BESS in the locale of Narrabri and another BESS of unspecific output and capacity at Gunnedah, an existing substation site. While the North West Slopes plan included some transmission line upgrades, Transgrid said those could be done on existing lines, resulting in minimal disruption.
Transgrid found the BESS options could provide close to AU$3 billion (US$2.04 billion) of net benefits. At the time of the study’s publication, Transgrid general manager of network Marie Jordan said batteries provided the greatest overall benefit.
It was also one of the first times BESS for Australia’s National Electricity Market (NEM) had been found to have “outperformed other options through the regulatory test,” Jordan said.
‘Doubly significant milestone’
“This marks a doubly significant milestone because when they were compared to other options grid-scale batteries came out on top in both regions in terms of providing the biggest benefits,” Jordan commented further yesterday.
“Our grid is changing, which is why we’re going beyond the traditional poles and wires approach and embracing new technologies and business models to meet the needs of consumers and keep the system reliable.”
The competitive procurement will launch in August 2023, with a Market Forum being held online by Transgrid on 10 August.
Australia’s rapidly maturing energy storage market, rising up in tandem with the increased ambitions on renewable energy and grid modernisation put into policy by the Labor Party government of prime minister Anthony Albanese, will in the coming months be characterised by a different kind of nationally-run but locally administered tender process.
In May the Albanese Commonwealth government confirmed that tenders for firm renewable energy capacity will be held, called the Capacity Investment Mechanism scheme. A sum of funding from the 2023-2024 Federal Budget will go towards, although for reasons of commercial sensitivity, the government has not disclosed figures.
In other big BESS news from NSW this week, the state government has given approval to two projects totalling 270MW for two of the state’s Renewable Energy Zone (REZ) multi-gigawatt clean energy developments.
Related Knowledge Center: Offshore wind energy
Over the next decade, U.S. offshore wind power is expected to grow from a single 30-megawatt wind farm off Rhode Island to more than 2,000 MW of capacity along the Atlantic Seaboard. There are contracts for wind power off the coasts of Massachusetts, Connecticut, New York, Maryland, New Jersey, Rhode Island, and Virginia.
The National Renewable Energy Laboratory has estimated the United States has over 4,000 gigawatts (GW) of offshore wind potential, enough to power the country four times over.
The growth in part being spurred by state solicitations, including in New York, where then-Gov. Andrew Cuomo (D) set a commitment of 9,000 MW of offshore wind by 2035, and in Connecticut, where in June 2021, Gov. Ned Lamont (D) signed legislation authorizing the construction of 2,000 MW of offshore wind by 2030.
The offshore development is also being driven by an investment tax credit set to end in December 2019 and is equal to 12 percent of expenditures. U.S. Sens. Susan Collins (R-Maine) and Tom Carper (D-Del.) have introduced a bill to extend the tax credit for up to eight years.
The Interior Department has held eight competitive lease sales that resulted in 15 offshore wind leases over 1.7 million acres that has the potential for 21 GW of capacity. In February 2022, the Bureau of Ocean Energy Management completed a bidding process that realized $4.37 billion for 488,000 acres across six lease areas in federal waters off New York and New Jersey.
Projects have also been proposed off the Southeast coast, off California and Hawaii, and for the Great Lakes.