Engie signs Australian ‘virtual battery’ deal with Neoen

The Australian arm of French developer Engie says it has struck a long-term virtual battery agreement with Neoen that is backed by the latter’s 300 MW/450 MWh Victoria Big Battery energy storage system, 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, but solely as a financial product that is separate to the physical operation of the energy storage system.

Tiburce Blanchy, 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 (BESS), allowing us to offer increased flexibility in our firming portfolio while we continue to develop other physical BESS projects.”

Other deals

Blanchy said the virtual battery contract, which is due to start in 2024, is the first of its kind for Engie but unlikely to be the last, with “a second, similar transaction due to start mid-2025.”

The contract is the third virtual battery agreement Neoen has signed in Australia.

In 2024, it signed a 10-year agreement with AGL for 200 MW/400 MWh of the Western Downs Battery being developed in Queensland. That followed a 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 CEO Jean-Christophe Cheylus said virtual battery deals allow users, or energy retailers to mimic a grid-scale battery without owning one. He added, 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 an electricity 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 and to respond to unexpected network outages.

From pv magazine Australia.