Neoen has issued notices to proceed to Tesla and UGL for the construction of Western Downs Battery Stage 3, a 305 MW / 1,220 MWh facility in Queensland, Australia. The renewable energy company simultaneously announced the completion of Stage 2 construction, bringing the Western Downs Battery's current operating capacity to 540 MW / 1,080 MWh across Stage 1 and Stage 2.

The Stage 3 development will serve as Neoen's fourth asset within its Western Downs Green Power Hub, located on Barunggam country near the town of Chinchilla in Queensland. Tesla will supply the battery storage technology, while UGL, a member of the CIMIC Group, will handle balance-of-plant contracting for the project.

Technical Specifications and Infrastructure

The new Stage 3 battery will consist of 312 Tesla Megapack 2XL units configured as a four-hour battery system with grid-forming capabilities. The facility will connect to Powerlink's Western Downs substation, utilizing existing infrastructure at the Western Downs location. The battery is expected to begin operations during the Australian summer of 2027/28.

Stage 2, with a capacity of 270 MW / 540 MWh, was completed ahead of schedule and delivered in time to support virtual battery contracts with AGL Energy and Shell Energy. Both Stage 1 and Stage 2 are equipped with grid-forming inverters and are currently providing grid-reliability, frequency, and firming services to Australia's National Electricity Market.

Virtual Battery Agreements and Commercial Partnerships

As part of the announcement, Neoen has signed two new virtual battery contracts with ENGIE. The first agreement covers 25 MW / 50 MWh over two hours, supported by Western Downs Battery Stage 2. The second contract provides 50 MW/200 MWh over four hours and will be backed by the new Stage 3 facility.

These virtual battery agreements allow clients to hedge their own or their customers' load by virtually charging and discharging Western Downs Battery without developing, building, or operating battery facilities themselves. The new ENGIE contracts increase the company's contracted virtual battery capacity, helping manage intermittency in its renewable energy generation portfolio and customer load flexibility.

ENGIE already maintains existing virtual battery contracts with Neoen, making the new agreements the company's second and third such arrangements. Jules Dufournier, ENGIE Australia's Head of Energy Management & B2B, stated the agreements showcase "ENGIE's ability to trade innovative derivative products that create real value for our customers" and complement the company's existing battery portfolio.

Expansion Impact and Company Milestones

The Stage 3 launch brings Neoen's total battery storage capacity in Australia to 2 GW / 6.4 GWh in operation or under construction, establishing the company as Australia's largest owner and operator of big batteries. Once Stage 3 is operational, the combined Western Downs Battery will contribute 845 MW/2.3 GWh of storage capacity to support Queensland's energy transition.

The Western Downs Green Power Hub currently consists of a 460 MWp operating solar farm alongside the battery storage facilities. According to Xavier Barbaro, Neoen's Group CEO, the hub will eventually comprise 1.3 GW of capacity across solar and storage technologies. Both Stage 1 and Stage 2 batteries help reduce Queensland's reliance on coal and gas generators through their grid-forming capabilities.

Stage 3 represents Neoen's seventh storage project collaboration with Tesla and UGL. Jean-Christophe Cheylus, Neoen Australia's CEO, noted the project "further highlights Neoen's innovation and leadership in big batteries and takes us past 2 GW of storage capacity in Australia."

The development received support from multiple stakeholders, including Powerlink, AEMO, the local community, and Western Downs Regional Council. Barbaro described Western Downs as providing "an inspiring template for growth in other regions" as the company continues efforts to accelerate the energy transition in Australia and globally.

The virtual battery solution model underpins the expansion strategy, with ENGIE joining the customer base alongside existing clients. Dufournier emphasized that the agreements enable ENGIE to "offer shaped products and tailored solutions that meet our clients' specific needs" while helping customers achieve sustainability goals within Australia's dynamic energy landscape.

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