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Contact Energy (Contact) has answered calls for more energy storage by contracting with Tesla to build a 100-megawatt (MW) battery, which will provide enough electricity to meet peak demand over winter for 44,000 homes for over two hours.
The $163 million new grid-scale battery builds on Contact’s existing partnership with New Zealand Steel and will sit on its Glenbrook site in south Auckland. This site is ideal as it has flat land and a high voltage connection to the national grid. This will be the country’s newest large-scale battery, the closest to the largest city, and Tesla’s first Megapack 2 XL system in New Zealand.
Contact, in the agreement with Tesla, also has the option to expand the capacity of the battery to 130 MW at this site; a move which would make it New Zealand’s biggest battery.
The battery will store excess renewable electricity, often generated by the wind or sun in off-peak periods when demand is low, which would otherwise go to waste. It will rapidly discharge this electricity to the grid when it is needed and provide a backup supply of electricity for unexpected outages.
Contact’s CEO Mike Fuge says the industrial-sized lithium battery will play a key role in maintaining a reliable supply of electricity for New Zealand, particularly during periods of high demand throughout the winter. It will also ultimately help with Contact’s transition away from an increasingly constrained gas market.
“It’s a bit like the Swiss Army Knife of the electricity system, performing a range of roles that will ultimately keep the lights on and reduce carbon emissions. The battery will supply power to the grid in an instant, quickly getting electricity to where it is most needed in the country. It will also support the development of new renewables like wind and solar generation,” says Mike Fuge.
“Contact has made a commitment for its generation to be net zero by 2035, and further reduce New Zealand’s remaining reliance on fossil fuel electricity generation.”
Contact will start work at the Glenbrook site immediately. The battery is expected to take up to 18 months to install and will be commercially operational by March 2026. It will create around 50 jobs during construction. Contact will manage the overall project, with Tesla responsible for the supply and commissioning of the battery. Tesla will also provide long-term maintenance services.
In May 2023, Contact and New Zealand Steel announced an innovative renewable energy agreement enabling the steel mill to almost halve its carbon emissions. Through the flexible off-peak arrangement, Contact will provide 30MW of electricity to New Zealand Steel for its new electric arc furnace. By substituting coal and iron sand with electricity and scrap steel, New Zealand Steel will eliminate 800,000 tonnes of carbon from the time the electric arc furnace is fully operational. This is one percent of New Zealand’s total emissions.
New Zealand Steel Chief Executive Robin Davies says today’s announcement is further evidence of what can be achieved through a partnership approach to deliver resilience building decarbonisation initiatives at scale and speed.
“We’re very pleased to be able to build on our existing partnership with Contact Energy through the installation of its new grid-scale battery at our Glenbrook site,” says Robin Davies.
Contact continues to advance further battery investment options and has also been granted consent to build another 100 MW grid scale battery in Stratford, Taranaki.
Contact Energy is one of New Zealand’s largest energy generators and retailers. We have more than 600,000 customer connections with electricity, gas, broadband and mobile plans. We are committed to leading the decarbonisation of New Zealand, and it is our vision to create and contribute to a better place to live; from the homes and communities we live in, to the land and resources that future generations can enjoy.
We are a member of the Dow Jones Sustainability Index Asia-Pacific(DJSI Asia-Pacific), which is a global benchmark for corporate sustainability, and winners of Sustainability Leadership Award at the 2023 Deloitte Top 200 Awards.
The 100MW battery storage project is in development by electricity generator and retailer Meridian Energy at Ruākākāon New Zealand''s North Island. The site is adjacent to Marsden Point, a former oil refinery.
Meridian said last week (3 November) that it has received resource consent for the project from the Whangārei District Counciland Northland Regional Council authorities. It marks the first stage of Ruākākā Energy Park, with Meridian hoping to also build a 125MW solar PV plant at the site later.
Meridian aims to have the BESS commissioned during 2024. The company''s head of renewable development Helen Knott said the help it will give to the grid will reduce volatility of supply and demand, and therefore contribute to bringing down electricity prices.
"We''ve seen our electricity system come under occasional strain with supply issues that have led to price instability. The battery storage will help to reduce these events by smoothing the distribution of supply and demand," Knott said.
As reported by Energy-Storage.news in March, New Zealand''s biggest publicly announced battery storage project is a 35MW system currently under construction by electricity distribution company WEL Networks and developer Infratec.
Also on the North Island, that project is nearing its expected completion date in December this year, with BESS technology provided by Saft and power conversion systems (PCS) by Power Electronics NZ.
The country''s first megawatt-scale battery storage system is thought to have been a 1MW/2.3MWh project completed in 2016 using the Tesla Powerpack, Tesla''s first iteration of an industrial and grid-scale BESS solution. However the first BESS to be connected to the high-voltage transmission grid in New Zealand came two years after that.
New Zealand''s transition to a renewable energy future has taken a significant step forward with the nation''s first grid-scale battery energy storage project now offering injectable reserves to the electricity market for the first time.
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