The $1.1 billion Melbourne Renewable Energy Hub has set an example for planning and delivering battery energy storage systems in Australia.
The electricity that powers our homes and business could fall off a proverbial cliff in the coming years if strategic thought isn’t given to post-coal infrastructure and frameworks.
These are the thoughts of the Australian Energy Market Operator (AEMO), which acknowledges that a grid powered by renewable energy behaves markedly different to one driven by coal-fired power plants and other fossil fuel sources.
The closure of the Yallourn and Eraring coal-fired plants, set for 2028 and 2029, respectively, are particular sticking points, with AEMO recently advising of the importance of three key technologies in its 2025 Transition Plan for System Security report.
Alongside synchronous condensers and clutched gas turbines, which both provide system strength capabilities such as inertia, fault current and voltage control, grid-forming BESS (battery energy storage systems) will be integral to a future grid, storing solar and wind generation to be deployed during peak electricity demand.
For Victoria, the $1.1 billion Melbourne Renewable Energy Hub (MREH) is an embodiment of this purpose, boasting 444 Tesla Megapack battery units to provide 600 megawatts (MW) of capacity and 1.6 gigawatt hours (GWh) of storage. This can power 200,000 homes during the evening peak period.
As SEC executive general manager – assets Lane Crockett explained, MREH has been strategically positioned to support the grid needs of Victoria and beyond.
“MREH is located at a 500kV level – the highest voltage level in the network – which means the biggest trunk lines that carry the most energy in the system,” he told Energy.
“Here, you’ve got connecting lines coming in from New South Wales in the north and the Latrobe Valley in Victoria, while it also connects to South Australia to support imports and exports from the west.
“So MREH is in a key part of the network, and to have a large battery facility with fast-acting electrical performance provides a fantastic level of security for the grid, keeping the system stable when conditions get challenging.”
According to data from VicGrid, Victoria was a net energy exporter 81 per cent of the time in 2023–24, with 4810GWh exported across the 12 months. From the closure of the Hazelwood coal-fired power station in March 2017 to 2023–24, over half of exports went to New South Wales and a quarter went to Tasmania.
This trend is shifting, however, as other states in the National Electricity Market (NEM) increase their renewable energy capability and Victoria prepares for the closure of its Yallourn, Loy Yang A and Loy Yang B coal-fired power plants.
It’s important, therefore, that there is stability in the transmission lines that interconnect us with South Australia, New South Wales and other states.
“This is why a battery at this location is key,” Crockett said. “It creates system security and provides AEMO the confidence that if they, at any moment, need energy injected into the system, then you’ve got a battery that’s perfectly positioned to do this.”
The MREH can also create additional capacity through ‘virtual transmission’, which sees BESS mimic the role of power lines to absorb or inject power and manage network congestion.
“The more batteries you put in, the more you facilitate the connection of new renewable infrastructure and the creation of additional energy,” Crockett said. “This supports what we call ‘virtual transmission’, which effectively creates more capacity and versatility in a network.
“And when there are negative prices during the day, which means the market is being flooded with too much energy, MREH will be able to store that and provide it to the market when there is a peak in demand.”
The MREH, which was connected to the grid in December and is operating at its full 600MW capacity, was delivered on time and on budget, which, according to Crockett, demonstrates that big batteries are “absolutely feasible and worthwhile”.
“We’ve shown that large battery projects can be done well and can be done in a way where the financial, commercial and physical risks are manageable,” Crockett said.
“Our partner Equis Australia did a great job in overseeing the construction and delivery of the plant, which is a good example of public–private partnerships, not just in the use of capital but also in the way we’ve worked together to achieve a successful outcome.
“The project was, to put it simply, well planned and well executed.”
A 38.5 per cent equity owner in the MREH, SEC also owns 100 per cent of the offtake from MREH A3, the plant’s four-hour 200MW/800MWh battery.
The government-owned renewable energy company also owns the SEC Renewable Energy Park in Horsham, Victoria and the SEC Delburn wind farm just south of the Latrobe Valley.
“We’re more than halfway through the construction of the SEC Renewable Energy Park, which is a 119MW solar farm with a 100MW, two-hour battery,” Crockett said.
“We’re also working on a pipeline of other projects that are all helping to bring forward infrastructure to assist the energy transition.”
In the meantime, the MREH is playing its role to support the grid.
“We’re trading every day and it’s working really well,” Crockett said. “It fills up in the middle of the day when prices are low and there’s plenty of solar resource, and then it discharges back into the market in the morning peak for maybe an hour or so, and then into the evening peak for a few more hours.”
More than 1200 people worked on the MREH build, including more than 70 trainees and apprentices.
A $2.5 million Community Benefit Fund from SEC and Equis will see $100,000 distributed to community programs per year across the 25-year life of the plant.
This feature appeared in the March edition of Energy.
