The Australian Energy Market Operator (AEMO) has invited bids to procure 1 GW of long-duration energy storage and provide access rights in the South West Renewable Energy Zone (SW REZ) for up to 3.98 GW capacity under the New South Wales (NSW) Electricity Infrastructure Roadmap’s fifth tender round.

The tender aims to deliver electricity infrastructure that benefits the financial interests of NSW electricity customers in the long term. SW REZ access rights include generation, storage, and hybrid projects, where the generation is sourced from renewable energy.

The last day to submit the bids is June 27, 2024.

The Long-Term Energy Service Agreement (LTESA) is a financial instrument designed to stabilize revenue for long-duration storage (LDS) facility operators against the volatility of electricity prices. The contract term can last up to 14 years for chemical batteries and up to 40 years for pumped hydro or the asset life for other technologies.

SW REZ access rights are a pivotal component of the state’s strategy to integrate renewable energy projects into the grid. These rights enable holders to connect their approved projects to the network and dispatch electricity to a specified maximum capacity.

Eligibility for access rights requires projects to generate a minimum of 30 MW from renewable energy sources. For LDS LTESA eligibility, projects must include storage units capable of being dispatched for at least eight hours. Common eligibility criteria for both LDS LTESA and access rights include:

• Projects must be registered with AEMO or indicate intent to register for the central dispatch process under the National Engineering Register.
• Projects must not have been identified as committed or existing in AEMO’s generation information page as of November 14, 2019, unless they involve expansions to existing assets or add new assets to existing infrastructure.
• Projects must have received a secretary’s environmental assessment requirements or lodged a development approval application under the Environmental Planning and Assessment Act 1979 (NSW).
• Projects must submit a community engagement plan, which will become contractually binding upon award.
• Projects must not have previously been awarded an LTESA or access right under an access program from a competitive tender conducted by the consumer trustee, nor have they achieved the finance and construction criteria under any other access program.

Bidders must demonstrate their progress towards reaching financial closure, the commercial operation date, and their financial capacity to support the project’s development, construction, and operation.

They should demonstrate a clear understanding of any impacts of the project on the community, plus a tailored approach to minimize and offset any impacts of the relevant electricity infrastructure through engagement with local communities and stakeholders that is consistent with applicable NSW government guidelines to foster local community support.

The successful bidder should also share financial benefits during the construction and operation with local communities and stakeholders.

In December, the Australian Department of Climate Change, Energy, the Environment and Water invited bids to develop up to 600 MW of four-hour equivalent or 2,400 MWh energy storage projects in South Australia or Victoria.

Earlier, Squadron Energy, Neoen Australia, A-CAES NSW (Hydrostor Australia), Lightsource Development Services Australia, and Ark Energy Projects were declared winners in the AEMO auction to develop 950 MW of renewable energy projects and 550 MW of long-duration storage.