(Reuters) - AGL Energy on Thursday signed a deal with France's Neoen SA that will help Australia's largest power producer virtually charge and discharge a part of the 100MW/200 megawatt-hour (MWh) Capital Battery to support consistent electricity supply.
The seven-year deal for the 70 MW of battery capacity comes at a time when the Australia's most populous states are at a risk to face a blackout from 2025 if new power capacity is not built in time to replace its biggest coal-fired plant.
AGL said https://www.agl.com.au/about-agl/media-centre/asx-and-media-releases/2022/april/agl-and-neoen-sign-virtual-battery-agreement that the financial offtake agreement would also allow it to mirror the services of a grid-scale battery.
"With the Capital Battery currently under construction, we will soon be operating grid-scale batteries in three of the five states of the National Electricity Market and have multiple projects in development across Australia," said Louis de Sambucy, managing director at Neoen Australia.
The construction of the Capital Battery had commenced in December 2021 in the Australian Capital Territory (ACT)—home to the capital city of Canberra—and is expected to begin operating by the first half of 2023, AGL said.
The deal comes a few months after Neoen activated Australia's biggest battery in time for the southern hemisphere summer after fire damaged two of Tesla Inc's "Megapack" units at the project during testing in July.
AGL, which is in the middle of an ongoing bidding war, is looking to split into two companies following a slump in the group's value over the past five years hammered by an influx of cheap solar and wind power and government pressure on utilities to slash power prices to households.