The Australian arm of French developer Engie says it has struck a long-term virtual battery agreement with Neoen that is backed by that company’s 300 MW / 450 MWh Victoria Big Battery energy storage system (BESS) near Geelong.
The offtake agreement allows Engie to mirror the services of a grid-scale battery, providing the ability to virtually charge or discharge up to 40 MW of the Victoria Big Battery’s capacity at any time as a financial product that is separate to the physical operation of the energy storage system.
Tiburce Blanchy, the head of Engie’s commercial operations in Australia, said the agreement will help to support the company’s customer base and the transition to renewables. Engie’s retail arm supplies electricity to more than 400,000 homes and businesses across Australia.
“This will help us manage the intermittency of our renewable energy generation portfolio and flexibility of our customer load,” Blanchy said.
“This virtual battery agreement is an exciting step for Engie and will complement our 150 MW / 150 MWh Hazelwood Battery Energy Storage System, allowing us to offer increased flexibility in our firming portfolio while we continue to develop other physical BESS projects.”
Blanchy said the virtual battery contract, that is due to commence later this year, is the first of its kind for Engie but unlikely to be the last with “a second, similar transaction due to start mid-2025.”
For Neoen, the contract is the third virtual battery agreement the company has signed in Australia.
Earlier this year it signed a 10-year agreement with AGL for 200 MW / 400 MWh of the Western Downs Battery being developed in Queensland. That followed the seven-year agreement with AGL announced in April 2022 relating to 70 MW / 140 MWh of Neoen’s Capital Battery in the Australian Capital Territory.
Neoen Australia Chief Executive Officer Jean-Christophe Cheylus said the virtual battery deals allow users or retailers to mimic a grid-scale battery without owning one, adding that the contract with Engie highlights the appeal of the product.
“It points once more to how this product meets the evolving needs of our customers,” he said.
The deal with Engie is the second offtake agreement Neoen has in place for the Victoria Big Battery.
It has also signed a contract with the Australian Energy Market Operator (AEMO) to deliver system integrity protection scheme (SIPS) service during crucial peak demand times.
Under the SIPS contract, which extends until 2032, AEMO has reserved 250 MW / 125 MWh of the battery’s capacity to operate in a control scheme to increase the capability of the Victoria to New South Wales Interconnector (VNI) and respond to unexpected network outages.
