“The new build of renewables is exactly what the driver is,” he said.
AGL has planning approvals for a 500MW battery at Liddell, the ageing 1660MW power station that is slated to close by April 2023.
The Liddell battery is part of an 850MW multi-site storage plan to be installed by June 2024 that the company announced on Thursday along with its earnings.
AGL reported a 22 per cent fall in underlying full-year profit and disappointed investors by providing a gloomier-than-expected outlook for the current financial year.
That 850MW plan, though, excludes some 330MW in batteries already announced by the company, meaning the full storage total could top 1.2 gigawatts, Mr Brokhof said.
The other announced plans include a 100MW battery at Wandoan in Queensland and four 50MW units with solar farm developer Maoneng in the NSW Riverina.
Mr Brokhof said the company was also preparing planning applications for a battery connected to its Torrens Island Power Station site in Adelaide.
AGL was looking at other sites, including in Victoria, with storage at its Loy Yang coal-fired power station one possible location.
“Battery prices are coming down so they are starting to compete with gas peakers,” he said, referring to the gas-fired power plants that can respond rapidly to changes in electricity demand.
“We want to be part of this energy transition” away from fossil fuels, Mr Brokhof said.
He declined to provide an estimate of the cost for the first phase of the Liddell battery, saying that would depend on the offers made by manufacturers.
The company will also see how the system performs before deciding whether the full build-out of 500MW will be completed the schedule closure of Liddell’s coal-fired units in 2023.
Mr Brokhof said AGL’s battery plan takes into account the federal government’s plan to develop its Snowy 2.0 pumped hydro project, which would add 2000MW of so-called dispatchable power to the grid.
John Grimes, head of the Smart Energy Council, said the scale of AGL’s battery ambitions was “extraordinary”.
Battery prices were following the path of solar panels, where each doubling of manufacturing capacity brought a 20 per cent drop in costs. For storage, the impetus is partly coming from a huge jump in demand for batteries as carmakers ramp up production of electric vehicles.
“This is a pretty sharp downward cost curve,” Mr Grimes said.
AGL’s decision also showed proposals to use taxpayer funds to bankroll an expansion of the gas industry to help revive the post-COVID economy were likely to leave many stranded assets, he said.
“The race has already been run and won,” Mr Grimes said. “The market is showing what the market solutions are.”
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Peter Hannam writes on environment issues for The Sydney Morning Herald and The Age.