AGL Energy has reached a Final Investment Decision on a $750million, 500 megawatt battery to be located at the site of the former Liddell power station.
Construction on the two-hour duration, grid-scale battery is expected to begin in early 2024, with the commencement of operations targeted for mid-2026.
The project is part of the $1billion Hunter Energy Hub.
"In April this year we closed the Liddell Power Station after 52 years of providing electricity for the NSW grid, and now we are set to build the 500 megawatt Liddell battery on that site," AGL chief operating officer Markus Brokhof said.
"We are committed to building out the new renewables, batteries, and associated industries that will be needed to make the energy transition a success right here in the Hunter."
Fluence has been selected as the preferred engineering, procurement and construction provider for the battery, which has an expected life of 20 years.
"The Final Investment Decision on the Liddell battery project marks another significant milestone in AGL's decarbonisation pathway and the transition of its energy portfolio," AGL managing director and chief executive Damien Nicks said.
"We are excited to approve another major grid scale battery project in our development pipeline, supporting the local economy and creating energy transition jobs at our Hunter Energy Hub."
He said the battery was a key component of AGL's interim target of approximately 5 gigawatts of new renewables and firming capacity in place by 2030.
"Once completed, the Liddell battery will add to AGL's existing suite of grid scale battery assets and contracted capacity from third parties. This includes the 250 megawatt Torrens Island battery, which commenced operations in August 2023, and the 50 megawatt Broken Hill battery which will commence operations shortly.
"We will continue to leverage our innovative, in-house capabilities to optimise the performance of our grid-scale battery assets."
The project will be supported by both a $35 million grant awarded by the Australian Renewable Energy Agency as part of its Advancing Renewables Program and a Long-Term Energy Service Agreement, arranged by AEMO Services on behalf of the NSW government.
The battery will be funded on AGL's balance sheet, utilising operating cash flows and existing debt facilities including AGL's recently secured green capex loans.