Australia's Energy Services Limited has announced the results of South Australia's first Firm Energy Reliability Mechanism tender, with six battery energy storage projects awarded long-term contracts that together represent 1,334 megawatts of capacity and 5,336 megawatt-hours of storage, establishing what the scheme administrator describes as an initial pipeline of long-duration firm capacity for the state's electricity system.

Six Projects Secure Long-Term Revenue Contracts

The Firm Energy Reliability Mechanism Agreements, known as FERMAs, were awarded following a competitive tender process administered by ASL, which was appointed as the independent Scheme Administrator for SA FERM in late 2025.

The contracts are designed by the South Australian Government to provide revenue certainty intended to support investment in long-duration firm capacity, while placing obligations on projects to deliver reliable, dispatchable energy during periods of system stress.

Under the terms of the FERMAs, contracted projects must be able to dispatch continuously for at least eight hours during what the scheme defines as Forecast Loss of Reserve 2 and 3 events, periods when the supply-demand balance in South Australia becomes particularly tight.

The six successful projects will collectively provide a committed output capacity of 517 megawatts and 4,136 megawatt-hours to meet those obligations, a figure that is distinct from their total installed capacity of 1,334 megawatts.

ASL Chief Executive Officer Nevenka Codevelle said the tender attracted robust competition and that successful projects performed strongly against the key assessment criteria.

She said ASL's evaluation prioritized projects with a clear and credible pathway to commercial operation, a meaningful contribution to system reliability, and strong value for South Australian electricity consumers.

Staggered Delivery Across Two Horizons

The awarded projects are expected to come online in two tranches. The first tranche is required to deliver a committed output capacity of 375 megawatts and 3,000 megawatt-hours by November 2028. A further 142 megawatts and 1,136 megawatt-hours of committed output capacity are required to be operational by November 2029.

ASL noted that Tender 1 was delivered within a compressed timeframe and sought long-duration capacity across these multiple delivery horizons. The scheme's Financial Vehicle, which was established in February 2026 to hold and administer scheme funds and act as counterparty to the FERMAs, will underpin the contractual arrangements for the successful projects.

Context: South Australia's Renewable Energy Transition

The tender outcomes sit within South Australia's broader ambition to reach 100 percent renewable electricity by 2027. Codevelle noted that the state's electricity system has already undergone substantial transformation, with renewable generation now supplying more than 70 percent of the state's electricity.

The projects secured through Tender 1 are intended to strengthen the power system by adding additional reliable, long-duration dispatchable capacity alongside that growing renewable share.

The SA FERM scheme has been designed specifically to address the reliability challenges that can accompany high penetrations of variable renewable generation.

By contracting for capacity that must be able to sustain output over extended periods during stress events, the mechanism targets the gaps in firm dispatchable supply that intermittent generation sources cannot reliably fill on their own.

Scheme Structure and Administrative Arrangements

Tenders under SA FERM are conducted by ASL in accordance with directions from the South Australian Minister for Energy and Mining. ASL's responsibilities as Scheme Administrator include administering the competitive tender process, assessing bids, and overseeing the establishment of the scheme overall.

The Financial Vehicle established in February 2026 serves as the legal counterparty to the FERMAs, providing the contractual structure through which scheme funds are held and distributed to support the long-term revenue certainty that the agreements are designed to deliver.

Further details on the successful projects and ASL's assessment of the bids have been published in the SA FERM Tender 1 Market Briefing Note, which was released alongside the announcement.

Further Rounds Planned

ASL has confirmed that additional SA FERM tender rounds are planned to support further long-duration firm capacity procurement as South Australia continues its transition toward its renewable electricity target.

Codevelle described the Tender 1 outcomes as a solid foundation for the scheme and indicated ASL looks forward to delivering future rounds to enable additional long-duration capacity to support the ongoing security and reliability of the state's electricity system.

No specific timeline or scale for future tender rounds was provided in the announcement, beyond the confirmation that further rounds are planned.

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