The proposal by French-based company Neoen to build the battery next to Stockdill Drive near Ginninderry was referred to the federal environment department for approval due to the project being likely to impact on endangered woodland and grassland that's home to countless animal and plant species.

The battery facility would supply up to 300 megawatts and contain 50 battery packs on site up to 2.5 metres high and 12 metres long.

The referral to the department said five hectares of box-gum grassy woodlands would be lost as a direct result of the project

"The proposed action is likely to have a significant impact on [the woodland and grassland] as it will reduce the extent of the critically endangered ecological community," referral documents said.

"[Neoen] proposes to offset this impact by contributing to the NSW Biodiversity Conservation Fund."

A development application for the project had yet to be sent to the ACT government for approval.

While the referral to the federal department said the proposed site for the project may provide habitats for threatened species such as the pink-tailed worm-lizard, the battery development was unlikely to have a significant impact on the species.

A spokeswoman for Neoen said the project was in the early feasibility stage, but did not provide further comment.

Box-gum grassy woodlands were once common along the western slopes and tablelands of the Great Dividing Range between southern Queensland through to Victoria.

Plant and grasslands ecologist Sarah Sharp said the grasslands were significant due to the environment being home to multiple species of plants and animals, some of them threatened.

"It's not just trees and grasses, there's a range of plant species and shrubs and herbaceous species like grass and wildflowers and orchids," she said.

"These particular woodlands occur on deeper soils and have more fertile soils naturally."

Ms Sharp said while the environment used to cover millions of hectares, it had been extensively cleared over decades due to the soils being good for agriculture.

Government management plans said instances of the environment being unmodified were extremely rare.

The box-gum grassy woodlands were in several areas across the ACT, such as near Tidbinbilla.

Ms Sharp said while she supported the idea for the battery storage facility, the location needed to be changed to protect the environment.

"I find it very disappointing that they aren't finding other land for it," she said.

"I don't see why one has to replace the other."

The referral said the ecological impacts of the battery proposal would be handled through an environmental management plan.

"They will include appropriate measures to be implemented within the proposed action area to ensure that were are no substantial changes to surface water flows or groundwater levels likely to influence the condition of retained box-gum grassy woodlands," the referral said.

The battery was one of two facilities Neoen was set to build in the ACT, after the company was one of the successful bidders in a reverse auction in September last year.

Development plans were lodged earlier this year by Neoen for a battery storage facility at Jerrabomberra.

The big batteries were planned as part of ACT government initiatives to support the territory's energy grid and avoid blackouts during high-demand periods.

Submissions to the environment department on the west Belconnen battery close on March 9.

The ACT's Environment, Planning and Sustainable Development Directorate was finalising its submission to the referral.

A directorate spokesman said any development application submitted to the ACT government for the project, should the referral be approved, would need to be consistent with environment assessments.

"If the federal government determines the development to be a controlled action, the proposal may be assessed by the ACT through a bilateral environmental impact statement," the spokesman said.

"Any environmental impact statement will need to consider opportunities to avoid, mitigate or offset potential impacts on critically endangered species."

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