Renewable energy company Neoen plans to expand capacity of its Hornsdale Power Reserve in South Australia by 50%. The 50MW/64.5MWh expansion, supported by Tesla, will further showcase the complete benefits that grid-scale batteries can provide to the National Electricity Market and Australian consumers.

In its first year of operation, the battery has saved consumers more than $50 million and the expansion, to be completed in the first half of 2020, will see these savings continue to grow.

Alongside additional power system reliability and continued cost savings to consumers, the expansion will provide an Australian-first large-scale demonstration of the potential for battery storage to provide inertia to the network, which is critical to grid stability and the future integration of renewable energy.

This will ensure South Australia can continue to harvest its world class wind and solar resources and support the transition to net 100% renewable energy generation in the 2030s, and further drive down electricity prices for all consumers.

The $71 million project will see the current 100 MW/129MWh battery expanded to demonstrate the ability for grid-scale batteries to provide inertia services and fast frequency responses to the grid.

In what would be a first for the National Electricity Market, the project will provide an evidence base for further reform and innovation in grid management, including working with the Australian Energy Market Operator to test and demonstrate the capability of battery control systems to provide digital inertia replacing the mechanical inertia traditionally provided by synchronous generators.

The tests could help to reduce current curtailment of solar PV and wind generation in South Australia.

Neoen will also work with AEMO to provide an evidence base to support an update of the current Market Ancillary Services Specifications to increase the permissible level of Frequency Control Ancillary Services registration for all providers, enabling large-scale batteries to provide this service to their full extent and unlock revenue streams to provide a commercial pathway for other large-scale batteries.

The Hornsdale battery extension could also allow for an increased power flow limit to the Heywood interconnector, resulting in an improvement in spot prices when importing energy from Victoria.

Tesla, who built the original battery in less than nine months in 2017, will deliver the project on a full turn key construction basis.

The South Australian Government will commit $3 million a year for five years in grant funding toward the expansion through its Grid Scale Storage Fund, to secure the delivery of the inertia benefits highly needed by the grid.

The Australian Renewable Energy Agency has committed $8 million in grant funding through its Advancing Renewables Program.

The project will also be the first battery project in Australia to benefit from debt financing support from the Clean Energy Finance Corporation.

“We are extremely proud of this expansion and the innovations it brings,” said Neoen chairman and CEO Xavier Barbaro. “It illustrates Neoen’s ability to build on an existing asset and make it smarter while providing its counterparts with savings and new services. This new investment also demonstrates Neoen’s capacity to act as a long-term partner for South Australia Government, towards a common goal: delivering sustainable, reliable and competitive energy.”

ARENA CEO Darren Miller said large-scale batteries are playing an important role in providing short-term, large-scale energy storage to help firm and balance the grid.

“The Hornsdale battery is a ground-breaking project that has proven what batteries can do for our electricity system, and this expansion will now show that it is capable of much more by demonstrating inertia, expanded FCAS functionality and extended support for the Heywood interconnector,” Miller said.

“Along with providing essential services to the South Australian grid, this will help to inform the regulatory changes required to value these services and create additional revenue markets for other batteries to enter the market on a commercial basis.”