In the second quarter of this year, Australia made more than A$1 billion (US$650 million) in financial commitments to large-scale battery energy storage system (BESS) projects.
If hybrid (power generation plus storage) projects are also included, investment commitments will exceed A$2 billion.
This marks the first time the “billion dollar mark” has been surpassed in a quarter, according to the National Clean Energy Council (CEC) trade group, which has just released its latest quarterly report on renewable project activity in the sector.
The CEC said that in the three months to June 30, 2023, it had committed to building six BESS projects with a total generation capacity of 1,497MW and storage capacity of 3,802MWh.
Meanwhile, four large BESS projects with a total capacity of 460MWh and an investment of A$350 million are in commercial operation, and two more projects with a combined capacity of 2,480MWh and an investment of A$1.1 billion are under construction.
Financial commitments for new projects were much quieter in the first quarter, with only one 200MWh project. Similarly, there was only one large 800MWh BESS under construction in the first quarter.
On a state-by-state basis, New South Wales (NSW) leads the way, with 13 projects financially committed or under construction at the end of Q2, with 3,126MW/8,166MWh of energy storage capacity and A$2.36 billion of investment.
South Australia and Western Australia tied for second place in terms of the number of projects committed or under construction, with seven projects each. However, South Australia’s BESS projects are almost twice as productive and have almost twice the capacity of Western Australia’s, at 1187MW/2864MWh and 606MW/1754MWh respectively, even though the Western Australian projects represent a much larger investment in financial terms.
Much of the second-quarter figures, or second-quarter success, can be attributed to the Waratah supercell under construction in Western Australia, which is designed as a “giant shock absorber” for the power system, according to the state government, which is providing financial support for the project.
Energy-Storage.news has reported extensively on the Waratah SuperCell’s capacity of at least 850MW/1,680MWh in its development history.
Australian bright spot in renewable energy market challenge
However, the report said the growth in battery storage activity was the most prominent clean energy technology in what would otherwise have been a challenging few quarters for the industry.
Only four large-scale solar PV or wind power projects were committed in the second quarter, totaling 384 MW of installed capacity and costing around A$225 million.
This is more than A$1 billion below the rolling quarterly average for the past 12 months, but record-breaking investment in standalone and hybrid energy storage brought the total amount committed back above average.
Notably, one of the largest of the generation projects under construction is the Ardandra storage and solar project in Queensland, a hybrid project combining 175MW of solar PV and 400MWh of battery storage.
CEC chief executive Kane Thornton said barriers to large-scale renewable energy remained due to a “historic lack of leadership, planning and vision over the last decade”. The current federal Labor government, led by Prime Minister Anthony Albanese, was elected based in part on a program of action on climate change and long-term energy security, with the previous Liberal government known for its inaction on climate and support for the fossil fuel Industry.
“These challenges make final investment decisions on large-scale renewable energy projects more difficult, including insufficient investment in transmission, grid connection challenges, inconsistent planning policies, supply chain and workforce constraints, as Australia competes with global leaders who are accelerating demand for renewable energy,” Kane Thornton said.
Thornton added that despite the growing opportunities, international investors are currently looking elsewhere as global opportunities look more attractive given the barriers that exist in Australia.
In addition, while the battery sector is booming, it still appears to need some level of support. cec said all three standalone energy storage system projects committed to during the quarter received funding or concessional financing from government agencies. the company also said it had received funding from the government for a number of projects, including the first of its kind in Australia.
