Akaysha Energy has signed a Long-Term Energy Service Agreement which will support the build and operation of a groundbreaking 415MW/1660MWh utility-grade battery energy storage system under a competitive tender from AEMO Services, and features the largest capacity of all projects within the LTESA scheme. The Orana BESS, located in Wellington NSW, will be delivered under a ten-year agreement that ensures certainty for private investment in new renewable energy storage, enabling Akaysha Energy to deliver innovative energy solutions to the market, to accelerate Australia’s transition to net zero.
Projects of this magnitude will have a significant impact on reducing the cost of energy and protection against outages and other events for consumers and communities. The Orana BESS will be one of the first systems in Australia to deliver a four-hour system, significantly increasing the value of utility-grade battery storage to stabilise the national energy grid during longer at-risk peak periods. Combined with the long-term agreement, the BESS will enable up to 2GW of new renewable energy, with enough storage to power 90,000 homes per day.
Nick Carter, Chief Executive Officer & Managing Director at Akaysha Energy said, “After proving our capability and commitment with Australia’s largest battery storage system, the Waratah BESS, the award of the Orana LTESA will enable us to provide greater certainty and stability of Australia’s National Energy Market with another of the country’s biggest batteries, delivered with Akaysha Energy’s unique approach to planning, construction and operation.
"At Akaysha Energy, we are bullish on longer duration systems such as this four-hour system. Our in-house markets modelling, engineering and technical teams have all combined to provide us a strong view that four hours is the new normal for BESS duration in Australia.”
International research firm Rystad Energy recently ranked Australia as one of the most volatile energy grids in the world, estimating energy storage capacity would need to grow from 2.8GW currently to 46GW by 2050 through a mix of utility-grade battery systems and hydro storage to smooth out the volatile grid. Akaysha Energy is already contributing heavily to this need with cumulative 10GWh of energy storage projects under planning, including the 1680MWh Waratah and now 1660MWh Orana BESS, and the four-hour, 1244MWh Elaine BESS in Victoria.
The LTESA model will be rolled out by the Commonwealth Government through its Capacity Investment Scheme (CIS) auctions commencing for South Australia and Victoria in early 2024.
“The LTESA and CIS models demonstrate smart public policy from the government to deliver increased storage capacity into Australia’s National Energy Market.
The revenue floor/sharing product enhances, rather than suppresses, the existing over-the-counter (OTC) power purchase agreement market for batteries by helping bridge the pricing gap between two and four-hour battery systems, thereby enabling battery operators like Akaysha Energy to write new, innovative revenue products on top. This will help build offtake liquidity in the OTC market and lead to longer duration battery storage capacity coming through.”
Paul Curnow, Managing Director – Strategy & General Counsel
Akaysha Energy was acquired by BlackRock Private Markets, via its Climate Infrastructure franchise, in 2022, and has teams around the world including in Australia, Japan, the United States and East Asia.
The goal of the NSW Government is to deliver a 70% cut in emissions by 2035 compared to 2005 levels, and the ability to reach this target and Net Zero by 2050 will require the private and public sector to work together to achieve this common goal. A key piece of this puzzle is for the NSW Government to accelerate energy transition with planning and infrastructure support so that these highly ambitious targets can become a reality in the next 20 years.