The AER is required to make determinations for Network Operators who are authorised or directed to undertake network infrastructure projects. We undertake this role as a Regulator under the NSW Electricity Infrastructure Investment Act 2020 (EII Act).
On 14 October 2022, the NSW Minister for Energy directed Transgrid as the Network Operator to carry out the Waratah Super Battery (WSB) project, which is classified as a Priority Transmission Infrastructure Project under the EII framework.
Throughout 2022, EnergyCo undertook a competitive process to select a service provider to provide the battery service component of the WSB project. The Ministerial direction required Transgrid to enter into a contract to procure services from the successful battery service provider.
On 17 October 2022, Transgrid submitted a revenue proposal to the AER for the System Integrity Protection Scheme SIPS (battery) Service component of the WSB project, seeking to recover the cost of payments it will make to the battery service provider. In December 2022 we made a determination setting out the amounts that Transgrid is to be paid.
Under the EII Act, Transgrid is required to be paid by the Scheme Financial Vehicle (SFV) in accordance with our determination. The SFV recovers these costs (and other NSW Roadmap costs) from NSW electricity distributors, who in turn recover these costs from NSW electricity customers via their retail bills.
SIPS battery service
The aim of the WSB project is to increase power transfer capacity on transmission lines that connect generation in the northern and southern regions of NSW to the Sydney, Newcastle and Wollongong region. The battery will operate as part of a broader System Integrity Protection Scheme (SIPS). The SIPS is designed to monitor transmission lines and enable the battery to act as a 'shock absorber' in the event of any sudden fault on the transmission system. The WSB project comprises the following four elements:
- SIPS battery service (contestable)
- Paired generation services (contestable)
- SIPS control system (non-contestable)
- Network augmentations (non-contestable)
The NSW Energy Corporation (EnergyCo), as the Infrastructure Planner for the WSB project, completed a competitive assessment process to select a service provider for the SIPS battery service. Akaysha Energy has been selected to construct and operate a battery that is capable of providing a guaranteed continuous active power capacity of at least 700 MW, and a guaranteed useable energy storage capacity of at least 1400 MWh.
Transgrid, as the Network Operator for the WSB project, is required under the Ministerial direction to enter into a contractual arrangement to procure the SIPS battery service from Akaysha Energy.