AGL Energy and specialist independent power producer Neoen have signed a seven-year agreement to enable AGL to virtually charge and discharge up to 70 megawatts (MW) of Neoen’s 100MW/200 megawatt-hour (MWh) Capital Battery. 

This financial offtake agreement will allow AGL to mirror the services of a grid-scale battery, providing the ability to virtually charge or discharge the battery at any time, supporting consistency of electricity supply into the grid, and balance its customer portfolio.

Construction of Neoen’s Capital Battery commenced in December 2021 in the Australian Capital Territory and is expected to begin operating in the first half of 2023.

AGL Chief Operating Officer, Markus Brokhof said the partnership was part of AGL’s strategy to support the delivery of reliable and flexible energy through a variety of sources and Neoen is the ideal partner to realise our ambitious target.

“As we continue with our plans for an orderly and responsible energy transition, we’re conscious of the need for flexible capacity that meets the energy needs of our customers to ensure they continue to have access to affordable and reliable energy,” Mr Brokhof said.

“Our aim is to strike a balance between meeting Australia’s current and future energy needs while transitioning in a responsible way.

“AGL’s energy transition will be powered by innovations like this, bringing flexible capacity into the market and supporting increased investments in renewable energy, allowing us to prioritise customer supply while we make progress towards net zero.”

Neoen is a leading French independent producer of renewable energy and is working towards a long-term vision to produce renewable, competitively-priced energy, sustainability on a large scale.

Neoen Australia’s Managing Director, Louis de Sambucy said Neoen is delighted to be partnering with AGL to deliver this innovative bespoke solution.

“The virtual battery is an ideal firming tool that will become a standard Neoen product and a key element in the success of our growing offer to our customers,” Mr de Sambucy said.

“With the Capital Battery currently under construction, we will soon be operating grid-scale batteries in three of the five states of the National Electricity Market and have multiple projects in development across Australia.”

The offtake agreement is integral to Neoen’s development of the Capital Battery in Canberra and is a key component in AGL’s strategy to deliver the energy supply mix of the future.

Over the past 20 years, AGL has invested $4.8 billion in renewable and firming generation and has added more than 2,350 MW of new generation capacity to the grid since 2003.

AGL Energy’s proposed demerger will unlock value and allow for the continued development of and investment into innovative technology to deliver a cleaner future.

It will result in two industry leading companies – AGL Australia, a leading multi-service energy retailer and Accel Energy, Australia’s largest electricity generator - which will house AGL’s thermal sites and future energy hubs.