Australian state targets 1 GW of energy storage with tender

The NSW government has launched its sixth Electricity Infrastructure Roadmap tender, seeking 1 GW of new LDES projects to boost electricity reliability as the state’s coal-fired power generators shut down.

AEMO Services, the part of the Australian Energy Market Operator tasked with running the competitive tenders for the NSW government, said projects can bid for long-term energy service agreement (LTESA) contracts under the new NSW Electricity Infrastructure Roadmap. The government-backed LTESAs are designed to derisk projects by providing investors with long-term revenue certainty and protection against low wholesale electricity prices.

The Tender Six round offers support for up to 1 GW of capacity and at least 8 GWh of LDES projects that can be operational by 2034.

NSW has estimated it needs 2 GW/16 GWh of long-duration storage capacity by the end of the decade, and a total of 28 GWh by 2034 to address the impending gap created by the anticipated closure of the state’s aging coal-fired power generators.

AEMO Services Executive General Manager Nevenka Codevelle said this new tender will take the state closer to its target of 2 GW of new long-duration storage by 2030.

“We’re now looking ahead to our next long-duration storage tender for assets that commit to be operational by 2034, scheduled to open before 30 June, 2025,” she said. “In particular, we want to see more short lead time projects that contribute to our 2030 minimum objective.”

The tender is open to projects connecting to existing transmission and distribution infrastructure, or new infrastructure in the state’s five planned renewable energy zones where the project has been granted an access right.

Codevelle said the success of the recent Tender Five for long-duration storage projects, which were announced in February, would serve as a running start for the next round.

Projects awarded LTESAs in Tender Five included two battery energy storage systems and a pumped hydro project with a combined capacity totaling 1.03 GW and 13.79 GWh of energy storage capacity.

“Tender Five was the most successful long duration storage tender to date,” Codevelle said. “It demonstrates the strong market interest to invest in long-duration storage projects and we’re excited to see more in Tender Six.”

Proponents are now able to register and begin preparing a project bid with registrations for Tender Six to close May 29, 2025. Project bids close June 10, 2025.

Codevelle said projects will be subject to “a two-stage tender process that assesses a project’s social licence commitments, deliverability, impact on the grid, and quality of proponent. The second assesses a project’s financial value to NSW electricity consumers.”

AEMO Services said the tender program has already supported projects expected to contribute more than 2.4 GW of generation, 18 GWh of long-duration storage, and almost 3 GWh of firming capacity to NSW’s energy grid.

From pv magazine Australia.