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British energy major Shell has selected a suburb in south-eastern Melbourne as the location for its first direct investment in a big battery project anywhere in the world.
Shell, one of Australia’s largest liquefied natural gas (LNG) producers, is using its global scale in oil and gas to push into deeper into cleaner energy, and on Friday said it had struck a deal with Macquarie Asset Management to develop a two-hour big battery at the Rangebank business park in Cranbourne.
Oil giant Shell has given the green light to a big battery project in Cranbourne, its first investment in a grid-scale battery anywhere in the world.
Once fully operational, the 200-megawatt, 400-megawatt-hour battery system will have the storage capacity to power the equivalent of 80,000 homes across Victoria for an hour during periods of peak demand.
Shell and Macquarie’s Green Investment Group on Friday said the battery would boost Victoria’s ability to host more renewable energy by increasing the state’s “firming capacity” – flexible energy supply that can be called on to top up the grid when needed – and providing crucial services to support the stability of the system. The project, which industry sources said would cost between $300 million and $400 million, has already reached financial close, and is expected to be completed by 2024.
“The Rangebank project is our first grid-scale battery investment in Victoria and marks Shell’s first direct equity investment in a utility-scale battery energy storage system globally,” Shell Energy Australia chief executive Greg Joiner said.
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The company is now expecting to build a similar-sized big battery each year in Australia in coming years as the clean energy transition accelerated.
“Provided you’ve got the right investment parameters for making these sorts of investments, then we’d expect something in the order of a project of this sort of size once a year as the market is unfolding, complementing the build-out of renewables,” Joiner said.
As Australia’s shift away from coal-fired power gathers speed, authorities say big batteries must play an increasingly important role because of their ability to store renewable energy when it’s most abundant and dispatch it at times when it’s not sunny or windy.