Australian utility AGL Energy has selected Wärtsilä as one of the two suppliers to deliver its grid-scale energy storage projects.
The two companies have signed a non-exclusive five-year Large Scale Storage System Frame Agreement to jointly supply storage projects.
The agreement will reduce tender timeframes for individual projects, enabling faster project schedules and commercial operation.
In addition to the energy storage and energy management services, AGL Energy selected Wärtsilä’s owing to its full EPC capabilities.
The development follows AGL Energy’s 2020 announcement of a plan to develop energy storage projects near the Loy Yang A power station in Victoria (200 MW), Liddell power station (150 MW) and Broken Hill (50 MW) in New South Wales and Torrens Island (250 MW) in South Australia.
The grid-scale energy storage plans will play a key role in Australian energy industry’s transition from traditional fossil fuels towards cleaner energy.
In 2018, AGL and Wärtsilä signed an EPC contract for the Barker Inlet Power Station (BIPS), a new power plant located on Torrens Island near Adelaide.
The main role of BIPS is to ensure reliability in the renewable-heavy South Australian power system by providing balancing capacity to manage the variability from renewables.
In addition to flexible engine power plants, such as BIPS, energy storage will play a key role in balancing renewables. Storage can take care of short duration balancing, whilst the flexible engine power plants can balance renewables for a longer duration.
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Markus Brokhof, the CEO of AGL Energy, said: “We are investing in the highest standards for energy storage technology performance, reliability and safety.
“We’re excited to see our grid-scale energy storage plans begin to come to life; we know energy storage technology is critical in creating a cleaner and smarter distributed energy infrastructure.”
Kari Punnonen, Director for Australasia at Wärtsilä Energy, added: “Australia is a country with unparalleled renewable energy resources and a unique opportunity to swiftly decarbonise and move towards renewable energy.
“Flexible capacity such as energy storage will be needed to balance renewables and keep the grid stable and reliable. AGL is a valued customer for Wärtsilä and we look forward to supporting AGL’s plans for critical firming capacity that will play a leading role in the energy transition from coal to renewables.
“Our smart technology helps to maintain system strength, network stability and energy security.”