Origin Energy plots large-scale battery expansion

Australia’s largest energy utility wants to build batteries across much of the nation’s eastern seaboard, boosting the energy transition and allowing it to profit from market volatility.

Origin Energy plans to build a large-scale battery in every state across the National Electricity Market – which excludes Western Australia and the Northern Territory – as it seeks to capitalise on wholesale market volatility, chief executive Frank Calabria says.

A rollout of batteries across the NEM would be a major boost to Australia’s energy transition, amid concerns storage is not being built fast enough to meet renewable energy targets.

Origin has already committed to spending $600m to develop a 460MW battery at Eraring, the site of Australia’s largest coal-fired power generator which supplies about a quarter of NSW’s energy needs and is due to close as soon as 2025.

But Mr Calabria said Origin now planned to replicate that battery across the rest of the NEM.

“We are building a 460MW, two-hour battery at Eraring and we will probably replicate that in every state and we will probably do that as fast as we can execute,” Mr Calabria told Free Electrons 2023, a global energy start-up program held in Sydney this year.

“We have a market that is probably the most attractive for the spread between high and low prices on a daily basis. You’re moving from zero to $200, and on a cloudy day it can be $200 the whole day. We have a market that is extremely dynamic and that represents a great opportunity for us.”

Australia’s wholesale electricity price – the cost of generating electricity – can swing wildly throughout the day, primarily due to the country’s high uptake of rooftop solar. During sunny days, the wholesale price is often zero and can sometimes be negative. A battery could be charged during this period and an operator receive a fee for doing so. The battery would then be discharged when the sun sets and the cost of wholesale electricity rises.

Mr Calabria said Origin’s immediate battery focus was on Eraring, with an expansion of the battery likely before turning to other sites.

Origin has said the capacity of the battery at Eraring could be increased to 700MW.

Origin Energy managing director Frank Calabria. Picture: Britta Campion

“We will look at other existing sites in our portfolio, Darling Downs in Queensland and Mortlake as well as exploring other sites in South Australia. We are going through the work on all of those but they are in the early stages,” Mr Calabria told The Australian.

Origin’s interest in expanding its portfolio of batteries comes as Australia’s energy industry grows increasingly alarmed about the country’s storage and firming capacity. Australia has legislated a target for renewable energy to provide more than 80 per cent of the country’s electricity by 2030, but energy executives have warned the country is well behind in developing batteries or pumped hydro that can supply the grid when the sun is not shining or the wind is not blowing.

Building at existing sites such as the gas-powered Darling Downs power station would allow Origin to capitalise on existing infrastructure, which would avoid the need to wait for new transmission lines to be built.

High-voltage transmission lines are the biggest bottleneck in Australia’s energy transition.

Australia needs to develop 10,000KM of new transmission lines to connect zero-emissions sources to the NEM and allow the transport of cheap electricity between states.

However, the construction of new high-voltage lines has been slowed down by community opposition.

Mr Calabria’s comments came at the Free Electrons event in Sydney, where energy start-ups are showcasing new technologies and products. Mr Calabria said the event allowed Origin to understand emerging trends.

Whereas previous events were dominated by emerging technologies in such things as virtual power plants, the 2023 event has focused on the commercial and industrial sectors, where it is difficult to cut greenhouse emissions.

Originally published as Origin Energy plots large-scale battery expansion