Neoen completes financing for Capital Battery in ACT

Construction site at Neoen's Capital Battery (western australia)
Construction at Neoen's Capital Battery (Image: Neoen)

Renewables developer Neoen has completed financial close on its Capital Battery, a 100MW/200MWh lithium-ion battery storage facility located next to the Queanbeyan substation near Canberra, in the Australian Capital Territory (ACT).

The project is being delivered in collaboration with technology provider Doosan. Construction commenced in December 2021 and the asset is expected to start operating in the first half of 2023.

Related article: Neoen files application to build 1GW big battery in WA

The Capital Battery will be financed by a combination of equity provided by Neoen and senior debt facilities provided by the Clean Energy Finance Corporation (CEFC) and Infradebt, a specialist infrastructure fund manager.

In April 2022, Neoen secured a 70MW virtual battery contract for seven years with AGL Energy, owners of Australia’s largest electricity generation portfolio, which will underpin this investment. The virtual battery is an innovative solution designed by Neoen to allow a large electricity user or retailer to mimic a grid-scale battery, without having to build or own one. This highly flexible solution provides AGL Energy with the ability to hedge its customer load by virtually charging and discharging a battery of 70MW as and when it chooses. In parallel, Neoen will be able to use its Capital Battery to deliver valuable grid support services to the network.

Neoen committed to building the Capital Battery as part of its winning bid in the ACT’s 2020 renewable energy auction, where it won a 100 MW power purchase agreement for Goyder South Stage 1 Wind Farm in South Australia. In line with its develop-to-own business model, the company will be the long-term owner and operator of the battery. Once it is operational, Neoen will launch a Community Co-investment Scheme, providing residents of the ACT and Capital region with an opportunity to become financial stakeholders in the project.

In addition to the Capital Battery, Neoen also owns and operates the 300MW/450MWh Victorian Big Battery near Geelong, and the 150MW/193.5MWh Hornsdale Power Reserve in South Australia.

Neoen’s battery storage portfolio in Australia totals 576MW in operation or under construction, making it the country’s leading owner and operator of big batteries. Neoen’s ambition is to have at least one grid scale battery operating in each state of Australia’s National Electricity Market.

Related article: Neoen signs Goyder wind farm PPA with Flow Power

Neoen Australia managing director Louis de Sambucy said, “We are excited to announce that the Capital Battery has reached this important financial milestone. I would like to thank the CEFC and Infradebt for their trust and their commitment to supporting battery storage solutions. In particular we extend our gratitude to the CEFC for this third investment in a Neoen big battery. With the dedication and commitment of our partners Doosan, we are on track to deliver this project in the first half of 2023 and looking forward to contributing to the region’s energy transition.”

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