Developers of the Melbourne Renewable Energy Hub, a four-hour battery project in Melbourne’s west, this year secured a $400 million debt financing package from a syndicate including Export Development Canada, Societe Generale, Standard Chartered and Westpac. The package was a record at the time.
France’s Neoen, meanwhile, is developing what will become Australia’s biggest four-hour battery complex in Collie, Western Australia, with combined capacity of 560 megawatts and 2240 megawatt-hours.
Central to Akaysha’s financing deal is a 12-year “virtual toll” offtake agreement with Australia’s third-largest power supplier, EnergyAustralia. This agreement enables the company to notionally charge and discharge 200 megawatts of the plant’s capacity within agreed daily bidding parameters.
EnergyAustralia said the innovative deal, which is separate from the physical operation of the battery, would help it manage its price and load commitments, particularly in times of high demand.
EnergyAustralia head of trading and transition Ross Edwards said: “The virtual toll solution, tailored by Akaysha, fits perfectly within our portfolio. Our clear intention is to accelerate the development of renewable projects and help bring forward the investment needed to support Australia’s clean energy transition.”
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New York-based BlackRock, which oversees more than $US10 trillion ($15 trillion) of investor funds and is the world’s biggest asset manager, selected Australia to launch the rollout of its biggest investment in batteries globally through its acquisition of Melbourne-based Akaysha Energy in 2022.
With most of the nation’s coal-fired power stations due to close in the next decade and a federal government target for the grid to source 82 per cent of its power from renewables by 2030, BlackRock has previously said that Australia has “risen up the rankings” to become one of the most attractive destinations for private capital to invest in the energy transition.
In its 25-year road map, the Australian Energy Market Operator calls for greater investment in “firming” assets, including big batteries, hydroelectricity projects and fast-ramping gas-powered generators to smooth out the peaks and fill gaps in variable renewable energy.
On Monday, Akaysha and BlackRock said they had committed and mobilised $3 billion to energy storage projects across Australia, with more than four gigawatts of projects under construction.
BlackRock regional co-head of climate infrastructure Charlie Reid said the type of financing secured in the debt deal for Orana served the “urgent need for large-scale batteries to support an orderly, energy transition in Australia”.
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