Frontier Energy said it will add a battery energy storage system (BESS) to a 120 MW (DC) solar facility at the Waroona Renewable Energy Project, following a change in a Western Australian government policy that makes the development of storage systems more financially attractive.

Energy Policy WA recently adopted a four-hour BESS as the reference technology for benchmark reserve capacity (BRCP), marking a change from the previous reference technology of an open-cycle gas turbine.

The government said a 200 MW/800 MWh battery with a 330 kV connection was selected as the new benchmark technology, allowing for a four-hour battery to receive 100% of the reserve capacity payments (RCP).

The reserve capacity mechanism is designed to ensure that there is adequate generation capacity available in Western Australia’s Wholesale Electricity Market (WEM) to meet expected peak electricity demand. The mechanism is unique to Western Australia.

Frontier Energy said the RCPs for an 80 MW four-hour capacity battery are forecast to generate approximately AUD 24 million ($15.73 million) in revenue in 2026-27.

The Perth-based company said combining solar with battery energy storage provided the strongest financial returns with the lowest capital commitment, while also offering a lower technical risk compared to alternatives.

“Integrating battery capacity enhances the project’s returns, compared to solar alone, through increased revenue from reserve capacity payments (RCPs), energy storage arbitrage, and reducing curtailment,” the company said.

Frontier Energy Chief Executive Officer Adam Kiley said that including the battery in the first stage of the Waroona project, now under development near the town of the same name about 120 kilometres south of state capital Perth, makes financial sense.

“Batteries have always been considered by the company, as it is logical to store solar energy generated during low-priced periods for dispatch during higher priced periods,” he said. “Including this at the project now makes financial sense, given changes to BRCP payments, whilst capital costs and efficiency of batteries have also improved significantly.”

Kiley said including the battery would mean only minimal delay in the release of the definitive feasibility study (DFS) which is expected to be announced in February. Frontier Energy is working toward a final investment decision (FID) and construction during 2024.

The Waroona project, which has approvals in place for 241 MW of solar, is being developed adjacent to Frontier’s Energy’s Bristol Springs project which has development approvals for 355 MW of solar generation.

The development of a solar plant is a key element of the company’s long-term strategy to build a renewable energy hub that also includes green hydrogen production, as well as green hydrogen consumption in a hydrogen-fueled peaking power plant.

Frontier Energy’s plans have however received a set back with the project not advancing to the next stage of the federal government’s Hydrogen Headstart program which is provides AUD 2 billion in funding to support large-scale renewable hydrogen production projects.

Kiley said it was disappointing to not advance to the next stage of the program, but the company remains “committed to this sector in the long term and will continue to assess future opportunities to add further renewable energy capability to the project.”