Battery storage and solar will be combined in a $42.5 million project for far north Queensland which will provide enough electricity to power 3,000 homes.

The Australian Renewable Energy Agency is providing $17.4 million funding support for Conergy Group subsidiary Lakeland Solar & Storage to build and operate a 10.8MW solar PV plant with 1.4MW (5.3MWh) of lithium-ion battery storage near Lakeland, about 90km north-west of Port Douglas.

The project will use stored energy to supply solar power after sundown and during peak usage times.

“Figuring out how solar PV and battery storage technologies best work together at a large scale will be crucial for helping more renewables enter our grids,” said ARENA CEO Ivor Frischknecht.

“The benefit of adding batteries to solar farms is simple; they store energy from the sun for use at peak times and overnight. They can also smooth solar energy output on cloudy days.”

The plant will generate and store enough renewable energy to power more than 3,000 homes, he said, and create up to 60 jobs during construction.

“Solar farms with storage can be especially useful at the edges of our electricity grids. This project adds to ARENA’s portfolio of fringe-of-grid projects, which prove how renewables can enhance the reliability of energy supply in regional Australia and benefit local networks.

Fringe-of-grid locations face challenges with reliability and outages caused by network constraints, a lack of infrastructure and long distance power lines, he said.

“This project is aiming to be the first in the world to test a concept known as ‘islanding’ from the main electricity grid. The local town of Lakeland will be powered solely by solar and batteries for several hours during these tests.”

The project will be connected to the Ergon Energy network. A detailed battery testing plan will be implemented over the first two years of operations, culminating in testing ‘island mode’ during the evening peak.

Frischknecht said ARENA had worked with Conergy to form a knowledge sharing steering committee, joined by BHP Billiton, Ergon Energy and Origin Energy.

BHP Billiton will gain valuable insights into the potential for solar and storage to assist its remote operations, he said, and Ergon is considering if the approach could help avoid network upgrade costs in other regional communities.

“More broadly, the project will develop an improved connection process for solar PV plus battery plants and share information with the industry and relevant regulatory bodies.”

The $42.5 million project is scheduled for completion in April 2017.