Edify and Sosteneo have partnered together to deliver the $400 million Koorangie Energy Storage System (KESS), which has completed project financing.
The 185MW/370MWh battery storage system will be built in the Murray River region, near the renewable energy rich area of Kerang, Victoria.
Highlights of the partnership and project include:
- Represents the first transaction in Australia for Sosteneo, which acquires 100 per cent ownership on behalf of clients
- Brings together CBA, DNB and BNP Paribas in the provision of a long-term syndicated debt facility
- Includes a 20-year System Support Agreement with the Australian Energy Market Operator (AEMO) for the provision of system strength
- Is supported by a 15-year term offtake agreement with Shell Energy for the full 185MW/370MWh
- Supports the development of regional Victoria through the creation of jobs, economic injection in the community, and upskilling in the local area
- Helps secure the future stability of renewable energy in the Murray River Renewable Energy Zone (REZ)
- Will facilitate a new terminal station between Wemen and Kerang
- Is capable of powering 350,000 homes for two hours
Developed and structured by Edify, the energy storage system will utilise Tesla Megapacks, equipped with grid forming inverters that operate in ‘Virtual Machine Mode’.
This will allow the storage system to operate in a manner akin to a conventional generator and provide crucial system strength services to increase the renewable hosting capacity of the Murray River REZ, helping to facilitate additional clean energy generation in the region.
Edify Energy Founder and CEO, John Cole, said that Edify continues its march forward, developing, financing and operationalising new energy assets to increase renewable penetration and power system stability as well as delivering affordable, reliable and dispatchable clean electricity.
“We welcome Sosteneo as our equity partner and their faith in us,” Mr Cole said.
“Edify delivers, and we look forward to bringing our third and largest BESS to market in short order. Our ecosystem of trusted partners is maturing and deepening with KESS.
“We are delighted to be delivering a ground breaking project with partners and stakeholders we have worked with on other assets including, Tesla, Shell Energy, Consolidated Power Projects, CBA, BNP Paribas, DNB, Gannawarra Shire Council, the Victorian Government and AEMO. Strong relationships are a cornerstone to the Edify team and are critical for an accelerated energy transition.
“We love the fantasticness of KESS; its ability to provide system strength services to AEMO while not compromising on its ability to perform in the energy market for the benefit of Victorian electricity consumers and providing a path to a 100 per cent renewable electricity future.”
KESS is the first investment in Australia for fund manager Sosteneo, following its launch in September 2023.
Sosteneo Managing Partner, and former ARENA CEO, Ivor Frischknecht, said that in an Australian first, the KESS battery project is providing inverter-based grid-forming services under a 20-year contract with AEMO.
“Sosteneo is delighted to be working with Edify to deliver this project and grow our clean energy portfolio spanning Australia, New Zealand and Europe,” Mr Frischknecht said.
“With revenues secured through long-term agreements with Shell Energy and AEMO, the KESS project is well-aligned with our objective of delivering stable commercial returns to clients whilst making an active contribution to the decarbonisation of the energy system.
“We are proud to help deliver renewable energy projects that support Australia’s energy transition and create opportunities in regional Victoria.”
The Victorian Government is supporting the KESS project with funding of $119 million to AEMO as part of a program to strengthen the grid so it can host the new renewable generation Victoria needs to secure its energy future and tackle climate change.
The project is part of a $480 million investment the Victorian Government is making through its Renewable Energy Zone Fund in 12 projects to address capacity constraints and strengthen and modernise the state’s grid.
The project will also contribute to Victoria’s drive to meet legislated energy storage targets of at least 2.6GW of storage capacity by 2030 and 6.3GW by 2035.
Featured image: A render of the KESS. Image credit: Edify.