Project experience
Victorian Big Battery
Developing the business case for Australia’s biggest battery
Client: Department of Environment, Land, Water and Planning
Location: Victoria, Australia
Sector: Energy
Services: Financial and commercial advisory, business case development
With climate change leading to increasingly hot summers and increasing peak demand for electricity, there’s a pressing need to modernise and strengthen the electricity grid to make it cleaner and more resilient.
In late January 2019, Victoria experienced prolonged extreme summer heatwaves, reaching a daily maximum of 46.7°C on 25 January 2019. The Australian Energy Market Operator (AEMO) directed ‘load shedding’ in the state in the form of rolling blackouts to manage the imbalance of electricity supply and demand as a last resort. Similar events had also occurred in Victoria during the two previous summers.
To address these issues, the State Government of Victoria began to explore the potential for an innovative, quick-to-deploy, non-network solution securing greater reliability of electricity supply during periods of peak demand.
Exploring the benefits, costs and risks
The Department of Environment, Land, Water and Planning (DELWP) engaged PwC as financial and commercial advisor to prepare the validation business case for the AEMO-led procurement of a System Integrity Protection Scheme (SIPS) in the form of a large-scale battery energy storage system.
Throughout the development of the business case, we assisted DELWP with ad hoc advice as required, and ultimately produced a detailed business case covering potential benefits, costs and risks of the SIPS service and the project structure.
We performed the entire engagement remotely and within truncated timelines, including management of a geographically diverse team and the onset of the pandemic.
Australia’s biggest battery to futureproof the Victorian grid
The result is the Victorian Big Battery (VBB) – a world-leading grid-scale battery storage facility located at the Moorabool Terminal Station just outside Geelong, which can store enough energy to power over a million homes for a half-hour period. It will provide critical grid support services under a 10 year contract with AEMO, improving the reliability of electricity supply in Victoria, reducing wholesale power costs for Victorian consumers and assisting in the transition to renewable energy in Victoria.
During the summer months, the VBB will enable AEMO to safely operate the Victoria-New South Wales Interconnector lines closer to their maximum transmission capacity, increasing the flow of electricity into Victoria by up to 250 megawatts (MW) when local supply is constrained or insufficient to meet peak demand. It will also provide network support through fast frequency response and emergency reserve, increasing the flexibility, reliability and resilience of the Victorian power system.
The project reached financial close in February 2021 with support from the Clean Energy Finance Corporation. The 300 MW Tesla battery project is owned and operated by renewable energy specialist Neoen, working together with Tesla and AusNet Services. The VBB commenced operations on 8 December 2021.
With Australia’s biggest battery strengthening and future proofing the power grid, Victorians can be confident that they’ll be able to keep their cool when the heat is on.
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