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Renewable Energy M&A: Shell acquires rights to develop 500 MW/1GWh battery energy storage system (BESS) in Central West NSW

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The oil major has acquired the $400mn Wallerawang 9 BESS, located at the decommissioned Wallerawang Power Station, from Greenspot, an Australia-based company. Greenspot was formed in 2020 with the objective of acquiring and repurposing infrastructure assets, and the Wallerawang site - which it acquired from EnergyAustralia in Sep’2020 - is its flagship project. The BESS is in the early stages of development, with environmental approval secured in Aug’22. The battery will connect to the adjacent 330kV Wallerawang Substation, which facilitated the transmission of coal-fired electricity generation prior to the retirement of the power station in 2014. Beyond the high-voltage transmission network, the site benefits from access to major road and rail transport infrastructure, significant existing and proposed water infrastructure, and proximity to high-integrity data networks. The project will help support the 3 GW of onshore wind and solar power that is scheduled to be brought online in the Central-West Orana Renewable Energy Zone, by the middle of the decade. Financing for the BESS is yet to be closed.

As per Enerdatics’ research, the recent deal marks Shell’s 4th major climate-positive investment in Australia since the start of 2022, and the second initiative exclusively targetting the country’s battery sector. In Oct’22, the company formed a partnership with AMPYR to develop 500 MW of BESS, also in Central West NSW, while simultaneously announcing the acquisition of the Kondin Energy Center in partnership with the Foresight Group. The project, located in Western Australia, comprises 375 MW of wind, solar, and BESS facilities under development. 

During the previous five years, Shell has been solidifying its position across the energy value chain in Australia, making targeted acquisitions to supplement its strengths. The corporation wants to develop an integrated power and renewables branch in Australia, where it has legacy gas-producing assets and trading expertise. Shell entered the Australian power retail sector in November 2019 with the $419 million purchase of electricity reseller ERM Power. Through the transaction, Shell gained about a quarter of the commercial and industrial power retail market in Australia, second only to Origin Energy. Following up on the ERM Power acquisition, Shell agreed to buy Powershop Australia, an online energy retailer with over 185,000 consumers. Under the deal, Shell will acquire power purchase agreements (PPAs) and offtake agreements secured by PowerShop Australia's parent firm Meridian Energy Australia. Shell's home power platform in Australia will be called Powershop, and it will expand Shell's existing commercial and industrial power presence.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

 

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