Public Works Committee: emPowering SA Community Batteries Project

Ms HOOD (Adelaide) (11:32): By leave, on behalf of the member for Florey, I move:

That the 108^th report of the committee, entitled emPowering SA Community Batteries Project, be noted.

The submission from the Department for Energy and Mining, referred to as 'the department', proposes to construct a fleet of 16 community batteries across South Australia, with the goal of lowering electricity prices for low income households. The project will also provide key learnings and pave the way for future commercialisation and adoption of renewable energy technology.

South Australians who rent or are on low or fixed incomes have little opportunity to control their energy bills through investing in renewable energy. The community batteries project aims to provide an opportunity by harnessing excess power entering the grid to create a supply of stored power that will subsidise public housing.

The project will contract AGL to install a fleet of batteries in a front-of-meter configuration, which will be operated as part of a virtual power plant (VPP). The VPP will then generate revenue through wholesale energy market trading and be used to support electricity bills for 10½ thousand low income households. Potential households will be invited to accept a retail electricity plan that is priced 25 per cent below the default market offer, with the department stating that this will provide a typical household saving of approximately $560 annually. As part of the VPP, the batteries will also increase resilience to the state's electricity distribution network.

Additionally, the project will support the state's transition to a renewable energy economy by providing subcontractors experience in the growing industry and by developing knowledge and experience in the deployment, operation and maintenance of community-style batteries for similar projects in the future.

The project involves the construction of 16 modular battery energy storage systems, each comprised of six separate storage modules that combine to create a 1,350 kilowatt per hour system. The storage modules are anticipated to be Sungrow battery systems, although equivalent models from an alternative supplier may be substituted, provided that their capacity, performance and value for money are comparable.

The design will also ensure that each site has the flexibility to allow for hardware replacement, as well as cater for an increased capacity. The batteries will be connected to the South Australian Power Network via pad-mounted transformers and will be operated by AGL as part of the VPP. AGL will have full dispatch rights and, once fully commissioned and energised, the proposed fleet of batteries will have an aggregate capacity of 21,600 kilowatts per hour.

Beyond providing the previously discussed savings for low income households, the batteries will also store excess energy during daytime periods when demand is high, helping limit voltage disturbances to the state's power network. Initial modelling also indicates that the project will reduce carbon dioxide equivalents from the grid by an average of five tonnes per day.

The project is funded through joint contributions from the South Australian government, AGL and the Australian Renewable Energy Agency (ARENA). In June 2023, the department was awarded $1 million as part of the Australian government's Community Batteries for Household Solar Initiative to install South Australia's first two community batteries, and was then, in May 2024, invited by ARENA to commence contract negotiations for a $10.8 million grant towards an additional 16 batteries.

The South Australian government will match ARENA's capital expenditure, with an additional $4 million from AGL, bringing the total capital expenditure to supply, install and connect the 16 battery assets to $25.7 million. Once installed, AGL will be responsible for all operational and maintenance expenses over the 10-year life of each asset. In the event the project achieves a net positive return over the duration of the project, all parties have agreed to reinvest returns into emPowering SA, or a similar project in South Australia. It is expected that over that period the project will provide at least $59 million of value across nominated low income households. Once finalisation of the battery locations are complete, there will be 16 sites identified across the state.

Project procurement followed a two-stage process involving an open market expression of interest and an invitation to supply. Following the competitive expression of interest, AGL was selected as the preferred implementation partner. To complete the second stage of the procurement process, AGL will then submit a final and binding quotation to the department. The department's project management framework aligns to best practice and defines management processes, planning approaches, key tasks and execution during the project life cycle, with monthly performance reviews held.

Given the major project status, emPowering SA will receive dedicated management support from the department's project management office. In partnership with the department, AGL, as one of Australia's largest energy providers, is well placed to identify, manage and mitigate project risks. The provider will implement its bespoke project management framework to accommodate the challenges and demands of large-scale batteries across multiple sites, and a representative delivery manager will oversee the team responsible for coordinating preparation and construction.

This framework focusses on front-end loading to avoid schedule delays and incorporates project management controls to identify and mitigate risk. The project aims to commission the first stage of batteries in November of this year, with full project completion anticipated in November 2027. The department has designed a sustainability audit checklist, which considers each obligation relevant to the project and considers strategies required to meet each identified need. Sustainability considerations include:

minimising the impact of site locations on the environment;

monitoring and minimising environmental impact during design, demolition and construction;

considering stormwater management and controlling contaminated run-off;

efficient, ethical and responsible selection of materials;

consideration of waste management during construction and eventual operation;

minimising energy usage and carbon emissions; and

consideration of noise pollution.

The department will determine native title and Aboriginal heritage implications during the detailed site assessments and states that should a site be subject to or under consideration for native title they will seek an alternative site.

In the case of an Indigenous Land Use Agreement an alternative site may be selected, depending on timeframes. The department will engage local councils regarding Aboriginal heritage within their local government area and will seek guidance from the Attorney-General's Department if required. Further detailed site assessments will review local, state and commonwealth registers to determine whether there are local heritage concerns and should items or places be discovered advice will be sought from relative authorities.

The project team is in ongoing consultation with government departments, suppliers and relevant stakeholders. This includes working with local council to identify preferred battery locations; SA Housing Trust to identify the ten and a half thousand low income households; the Crown Solicitor's Office to create a retailer energy productivity scheme; the Department for Infrastructure and Transport for special project accreditation approval; the Country Fire Service and Metropolitan Fire Service to evaluate fire safety risk management; and ARENA concerning grant funding, contract negotiation and receipt of conditional funding approval.

The committee examined written and oral evidence in relation to the emPowering SA community batteries project. Witnesses who appeared before the committee were Scott Oster, Director, Major Projects, Department for Energy and Mining, and Travis Murphy, Manager, Projects, Department for Energy and Mining. I thank the witnesses for their time. I would also like to thank the member for Stuart, the member for Kavel and the member for Mawson for their written statements regarding this project in their respective electorates.

Based upon the evidence considered and pursuant to section 12C of the Parliamentary Committees Act 1991, the Public Works Committee reports to parliament that it recommends the proposed public work.

The Hon. G.G. BROCK (Stuart) (11:41): I congratulate the committee on this great initiative. I am led to believe that Port Pirie is going to be a recipient of one of those batteries. What I would like to say is that this is well and truly overdue because the aim of this is to provide people in our communities in the lower economic situation the opportunity for cheaper power.

From a council point of view, I attended our council meeting couple of weeks ago; they have to decide on a location for this. I will say that there was nearly an hour of council discussion on a preferred location for this particular community battery. I think the final design or final location is just adjacent to a substation in Grey Terrace, which is fairly close.

One thing that is going to be very beneficial to our community is being able to access cheaper power. As the member indicated, it is up to about $560 per annum cheaper and it is about 25 per cent below the market price. This is similar to a project of a previous member of the Port Pirie Regional Council, a James Holliman. He suggested some years ago that council go into partnership with a renewable energy company about providing batteries to people who have the panels on their roofs and they would be able to pay that off on a regular basis over a period of time through their pensions.

That was a great initiative from James Holliman at that particular point. Unfortunately, our council have not progressed that any further and have not continued doing that. But again, I congratulate the Public Works Committee on this one. The initiative is absolutely fantastic and I, as a local member and a resident of Port Pirie for many years, am looking forward to the installation of that battery and that the lower income pensioners will be able to get access to cheaper power. I commend the report to the parliament.

Motion carried.