South Australia prepares for first-ever long-duration storage auction

South Australia’s first firm energy reliability mechanism (FERM) Tender Round 1 will take registrations from late October, targeting 400 MW of capacity by November 2028, and 700 MW in total by 2031, with projects required to dispatch at maximum capacity continuously for eight hours.

To achieve the 700 MW of capacity, three commercial operation dates (COD) have been set and also include 200 MW by November 2029, and 100 MW by November 2031.

ASL Chief Executive Officer Nevenka Codevelle said the tender is technology neutral, with battery energy storage systems (BESS) and gas generation indicative eligible technologies.

“As scheme administrator, we can only support projects that are in the long-term financial interests of South Australian electricity consumers, which means we’ll be rigorously assessing benefits to system reliability, security and impact on wholesale electricity prices as well as scheme forecast cost and potential cost exposure of bids,” Codevelle said in a statement.

“I strongly encourage potential tender participants to put their best foot forward when it comes to delivering value for South Australians.”

Projects can bid for a FERM Agreement for terms of 15 years, which provides the underwriting mechanism for a portion of a project’s annual net revenue, providing financial certainty and incentivising consistent, reliable operational performance.

South Australia is on target to achieve net 100% of electricity generation from renewables by 2027, up from 73.7% in 2022-23. The state’s power system was recognised in an International Energy Agency Integrating Solar and Wind report, showing it was one of two regions in the world to have reached Phase 5 (out of six phases) of integrating wind and solar energy into the grid.

The formerly known Australian Energy Market Operator (AEMO) Services Ltd, now called ASL, is the appointed scheme administrator, which also manages renewable and storage tenders for the federal government’s Capacity Investment Scheme (CIS) and the New South Wales (NSW) renewable infrastructure roadmap.