Singapore-based Equis Development and Victoria’s government-owned State Electricity Commission (SEC) have closed financing and started construction on the initial phase of the Melbourne Renewable Energy Hub (MREH Phase 1) project in Australia.
The 600MW/1600MWh MREH Phase 1 project development is expanded into three different projects with 200MW capacity each and is estimated to require more than $1bn investment.
SEC made an equity investment of $245m, and Equis expanded its equity investment to more than $510m in the MREH Phase 1 development project.
MREH Phase 1 will have three battery stages, two batteries comprising 400MWh of 2-hour storage capacity each will be owned 70% by Equis and 30% by the SEC.
The remaining battery storage project with 800MWh of four-hour storage capacity will be 51% owned by Equis and 49% by the SEC.
The 200MW/800MWh battery will be backed by an offtake agreement with SEC for 100% of its capacity, where SEC will directly ensure firming for its solar and wind projects.
Equis founder and managing director David Russell said: “The SEC has proven to be a commercial and valuable partner, adding immediate value to MREH and ensuring a rapid, cost-effective construction program.
“The result will be one of the largest battery energy storage projects in the world. It will begin enhancing Victoria’s grid and power price stability by the end of 2025.”
Victoria State Electricity Commission minister said Lily D’Ambrosio said: “The investment is a huge step forward in increasing Victoria’s renewable storage capacity – which is critical to meeting our nation-leading targets of 95 per cent renewable energy generation by 2035.”
Tesla has been contracted to provide 444 of its fully integrated Tesla Megapack Battery Energy Storage Systems (BESS), for the proposed MREH Phase 1 project.
AusNet and Lumea will provide connecting transmission infrastructure, while a joint venture of Samsung C&T and Genus Plus will deliver EPC services and the balance of the project.
MREH has been a ‘Project of State Significance’ and has secured land and approvals for 1,200MW capacity, of which 600MW has commenced construction through MREH Phase 1.
The balance 600MW is currently being developed for a longer-term storage of up to 12 hours.
MREH Phase 1 and 2 will be connected to the National Electricity Market’s high voltage 500kV transmission system, for more rapid dispatch than other battery storage systems.
The joint ownership of MREH Phase 1 will benefit Victorians, and the project also supports jobs and local content, said the Singapore-based energy company.
Russell added: “The unique scale and structure of MREH Phase 1 has allowed for a rapid response to the SEC’s capacity requirements and ability to directly firm its own renewable energy generation load whilst also ensuring 400MW of merchant capacity capable of rapidly responding to expected and unexpected events which impact power prices and the stable supply of power within the state.
“The project will be delivered by trusted, creditworthy counterparties with a strong record track of completing projects on time and on budget in Australia.”
