France's Neoen SA will work in tandem with electric vehicle powerhouse Tesla to install one of the world's largest lithium-ion batteries in Australia after the two companies reached a grid connection deal.
Neoen will oversee the handling of the grid's system integrity, while Tesla will supply the project's mega-pack technology. The battery facility could start productions by end of next year, the Financial Times reported.
The project, called the Victorian Big Battery plant, will be constructed in the southeastern city of Geelong. It will have a 300-megawatt capacity and will be twice the size of Neoen's Hornsdale facility situated in South Australia, which was the biggest battery power plant when it went in full operation in 2017.
The project is in line with Australia's push for clean and renewable energy and provides jobs as the country tries to bounce back from the ill effects of the global health crisis. The Australian government is currently targetting 50% power output from renewable sources by 2030. During a pandemic budget funding announcement Thursday, Australian Energy Minister Lily D'Ambrosio said construction of the battery plant would generate 85 jobs.
In a press release, the Paris-based independent power market operator Neoen said the installation of the new system in the country's second-most populous state will help upgrade and boost its local grid. The state's power grid runs on coal-dependent energy facilities, which failed in recent months that led to blackouts.
D'Ambrosio said the Victorian Big Battery plant would be the most important of its kind in the southern hemisphere. An independent evaluation had showed the facility would generate over $2 in benefits to households and businesses for every $1 invested.
D'Ambrosio added that households would pay for the use of the battery through their electric bills, but the drop in energy prices produced by the battery plant would mean that consumers paid less for their power consumption.
Based on projections by BloombergNEF, around $951 billion will be poured on the battery infrastructure through 2050, with two-thirds deployed on utility-scale technology.
Tesla is seeing growing demand for grid-scale batteries and the new project in Australia will provide more evidence that the technology is well-suited to support unstable solar and wind power, company chairman Robyn Denholm disclosed during a virtual meeting.
"This is a game-changer for Victoria's shift from old coal-burning power stations to renewable energy," Environment Victoria chief executive Jono La Nauze said.
