Neoen Expands Grid-Forming Battery Storage in Queensland

Large-scale battery systems are increasingly used in applications such as renewable energy integration, grid-frequency support, load-shifting, and firming services. In Queensland, Australia, Neoen has advanced this trend by starting construction on Stage 3 of its Western Downs Battery, a four-hour storage installation designed to reinforce the region’s energy infrastructure.

Construction Launch of Western Downs Battery Stage 3
Neoen issued notices to proceed to Tesla, the supplier of the Megapack 2XL units, and to UGL, the balance-of-plant contractor from the CIMIC Group. This step marked the beginning of the construction of Western Downs Battery Stage 3, a 305 MW / 1,220 MWh asset at the Western Downs Green Power Hub near Chinchilla on Barunggam country.

Stage 3 will consist of 312 Megapack 2XL units equipped with grid-forming capabilities. Grid-forming inverters are increasingly used in hybrid and renewable-heavy networks because they help maintain voltage and frequency stability without relying solely on synchronous generators. The system will connect to Powerlink’s Western Downs substation and use the site’s existing electrical infrastructure. Neoen indicated that Stage 3 is scheduled to begin operating over the Australian summer of 2027/28.

Virtual Battery Contracts and Operational Progress
Ahead of this milestone, Neoen completed Western Downs Stage 2 (270 MW / 540 MWh) earlier than planned. It supports Neoen’s virtual battery contracts with AGL Energy and Shell Energy. Virtual battery agreements are financial arrangements that allow energy retailers or large consumers to hedge demand by virtually “charging” or “discharging” a real battery, without owning or operating a physical asset. These contracts facilitate load management and effective participation in wholesale markets.

Neoen recently signed two new virtual battery agreements with ENGIE. The first provides 25 MW / 50 MWh (two-hour duration) backed by Stage 2, and the second covers 50 MW / 200 MWh (four-hour duration) backed by Stage 3. For ENGIE, these contracts increase the volume of flexible, firming capacity available to balance the variability of renewable generation and customer demand.

Role of Western Downs Battery in the National Electricity Market
Stages 1 and 2 of the Western Downs Battery, with a combined capacity of 540 MW / 1,080 MWh, are currently delivering energy-market services such as frequency control, system resilience, and firming support to Australia’s National Electricity Market (NEM). Both stages use grid-forming inverters, which contribute to reducing Queensland’s operational reliance on coal- and gas-fired generation.

When Stage 3 becomes operational, Neoen’s total storage at the Western Downs site will reach 845 MW / 2.3 GWh. This expansion aims to strengthen Queensland’s energy transition by increasing dispatchable renewable capacity using proven battery technologies.

Neoen’s Growing Battery Portfolio in Australia
With the start of Stage 3, Neoen’s battery storage portfolio in Australia has reached 2 GW / 6.4 GWh, either operational or under construction, making the company the largest owner-operator of large-scale batteries in the country. Western Downs forms part of the broader Western Downs Green Power Hub, which is expected to include up to 1.3 GW of solar and storage capacity once fully developed.

www.neoen.com