One of Australia's leading energy analysts says a 500-megawatt battery is an ideal way to begin the replacement of the Liddell power station near Muswellbrook in the NSW Hunter Valley, which will shut next year.
Tony Wood is the program director for energy and climate change at the Grattan Institute. He's keen to stress that AGL's battery is not a simple replacement for a power station.
"Liddell is still a large, coal-fired power station and obviously a battery doesn't produce electricity," he said.
"What the battery does is store electricity very effectively and then can release it when it is needed.
The NSW government has given planning approval for the battery at AGL's Liddell station, which will be retired next year.
The first unit at the power station is due to close next month.
Tony Wood says batteries like AGL's are needed for when the sun doesn't shine and the wind doesn't blow.
"It doesn't solve everything but it makes a big difference, as we move from a system that's overwhelmingly fossil-fuel coal and gas-based to one that's going to be wind and solar-based," Mr Wood said.
"Balancing reliability is where these batteries fit in and so we'll see these big grid batteries probably get even bigger and we'll also see a proliferation of smaller batteries at the local level and that's the way the system's going to develop."
'What we've seen today is really exciting'
Independent think tank Beyond Zero Emissions has applauded approval for the battery.
Sam Mella, project manager and Hunter diversification lead at Beyond Zero Emissions, says it's a great move given the amount of expertise in energy storage already in the Hunter Valley.
"What we've seen today is really exciting," she said.
"It's a step in the development of the Hunter Renewable Energy Zone and the diversification of energy generation and storage in the Hunter.
"And the Liddell site is obviously fantastic as it has a lot of existing infrastructure, so it makes a lot of sense for a large-scale battery to be there.
The Liddell battery is part of AGL's plan to have 850MW of grid-scale batteries across Australia.
The state government says the project is expected to create up to 100 construction jobs and attract more than $750 million in capital investment.
