AGL has taken a final investment decision (FID) of A$41m ($30.86m) with the Australian Renewable Energy Agency (ARENA) for the 50MW/50MWh Broken Hill battery project in New South Wales (NSW), Australia.

ARENA, on behalf of the Australian government, has committed to funding of A$14.84m ($11.17m) to the lithium-ion battery storage system with grid forming capabilities.

The FID follows the planning approval from the NSW Department of Planning, Industry and the Environment (DPE) in September 2021.

AGL has engaged the consortium of Fluence and Valmec to supply the batteries for the project located at Broken Hill. The project will be built on industrial land nearly 6km northwest of the Broken Hill airport.

The battery project will be equipped with advanced inverter technology and will provide system strength services in weak parts of the grid.

Completion of the Broken Hill battery project is expected to be achieved early 2023. The construction phase of the project will generate up to 50 jobs for engineers, contractors, and tradespeople.

The project is part of AGL’s planned grid-scale battery network with a capacity of 850MW. Currently, the battery network is under development.

AGL chief operating officer Markus Brokhof said: “As Australia moves forward with its energy transition, we know that firming technologies like batteries play an important role in energy storage and supporting renewable energy supply.

“Broken Hill’s unique edge-of-grid environment provides an ideal location for this advanced inverter technology to demonstrate how it can facilitate further penetration of renewable energy generation and add to the stability of the wider electricity network.”

According to ARENA, the project will prove that large scale batteries equipped with grid forming inverters will boost system strength and enable larger penetrations of variable renewable energy production at the lowest cost.

ARENA said that Broken Hill has been chosen as an ideal candidate site for evaluating grid forming capabilities because of its fringe of grid location, which leads to low system strength.

ARENA CEO Darren Miller said: “We are particularly interested in seeing how AGL’s Broken Hill battery will utilise and demonstrate advanced inverter technology in a weaker section of the energy grid.

“We look forward to working with AGL and Fluence in highlighting the potential of large-scale batteries to provide a cheaper solution to providing system stability as the grid takes on more renewable energy.”

Recently, AGL received approval from the NSW DPE for the 500MW/2GWh Liddell battery storage project in New South Wales.