A battery power revenue-sharing agreement struck between the ACT government and an energy storage company offers a blueprint for other states and territories to attract similar investment, Chief Minister Andrew Barr has said.
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Mr Barr said the deal is with Eku Energy, in which the company will spend up to $400 million establishing a 250-megawatt, 500 megawatt-hour battery energy storage system at Williamsdale.
The project forms part of the government's Big Canberra Battery project, a network of battery storage facilities of varying sizes.
"There are three key reasons why we are doing this. The principal one is energy security. Secondly, to further develop the renewable energy sector in our economy," Mr Barr said on Thursday.
"And thirdly, to deliver a financial return to the territory."
Mr Barr said the details of quarterly payments the ACT government would pay Eku Energy over the 15-year contract were commercial in confidence.
"The risk-sharing arrangements appropriately apportion risk between the two parties, reflecting our capacity as obviously the procurer to provide [Eku Energy] of long-term payments," he said.
Eku Energy chief investment officer Daniel Burrows said the revenue sharing structure was a good model.
"It's something we've worked with the ACT on over a number of months through their procurement process. So it's a contract that can be used in other contexts," Mr Burrows said.
Mr Burrows said Eku Energy would take the structure of the arrangement to other governments as a potential model to launch future investment projects.
The ACT government had earlier described the revenue-sharing deal as "innovative".
Mr Barr also revealed he would travel to South Korea next week and meet with Hyundai, among other companies, for talks about electric vehicle procurement.
The territory budget in 2020-21 allocated $100 million over a five-year period to deliver the big battery project. ACT Labor committed to the project before the 2020 election.
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There will be batteries installed at 14 government-owned sites across the city as part of the second part, following the 250-megawatt battery at Williamsdale. Batteries are planned for sites in Fyshwick, Gungahlin, Belconnen, Chifley, Greenway, Kambah and Stromlo.
The third part will include the delivery of medium-sized neighbourhood batteries. The complete battery system could ultimately power more than one-third of the ACT, the government has said.
Work has already begun on a 100-megawatt, 200-megawatt hour battery near the NSW border, which French energy company Neoen committed to building when it won the ACT government's 2020 renewable energy auction.
Renewable energy storage capacity must grow significantly over coming decades to keep pace with rapidly rising electricity demand, a CSIRO report has said.
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Jasper Lindell
Jasper Lindell joined The Canberra Times in 2018. He is a Legislative Assembly reporter, covering ACT politics and government. He also writes about development, transport, heritage, local history, literature and the arts, as well as contributing to the Times' Panorama magazine. He was previously a Sunday Canberra Times reporter.
Jasper Lindell joined The Canberra Times in 2018. He is a Legislative Assembly reporter, covering ACT politics and government. He also writes about development, transport, heritage, local history, literature and the arts, as well as contributing to the Times' Panorama magazine. He was previously a Sunday Canberra Times reporter.
