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Neoen powers up final stage of Australia’s largest BESS
8/10/2025
News
Renewable energy company Neoen has switched on the final phase of its 560 MW Collie battery energy storage system (BESS) in Australia. The project is the largest BESS currently operating in the country and the first to exceed 2 GWh of storage capacity.
Located in south-west Western Australia, the Collie BESS has been developed in two stages. Collie 1, with a capacity of 219 MW/877 MWh, went live a year ago. The second phase, the 341 MW/1,363 MWh Collie 2, was commissioned last week. The BESS will help address grid stability risks associated with the State’s retirement of coal power plants, high penetration of rooftop solar and increasing energy demand, reports Neoen.
At 560 MW/2,240 MWh, the four-hour Collie BESS can charge and discharge the equivalent of 20% of the average demand in the South West Interconnected System (SWIS), the electricity grid in south-western Australia that is managed by the Australian Energy Market Operator (AEMO), says Neoen.
The company has also announced plans to start of construction of the Muchea BESS, its third storage asset in Western Australia. At 164 MW/905 MWh, Muchea is Neoen’s first six-hour long-duration battery. It will connect into Western’s Power’s existing Muchea substation in SWIS. Once operational, the project ‘will deliver critical grid-stability and reliability services during Western Australia’s evening peaks’, says Neoen.
Muchea is backed by the Australian government’s Capacity Investment Scheme (CIS). The revenue underwriting programme is designed to encourage investment in renewable energy and clean dispatchable capacity, aiming to achieve the government’s 82% renewable energy by 2030 target. CIS provides revenue safety nets to large-scale energy projects through a competitive tendering process, ensuring revenue certainty via ‘cap and collar’ contracts. Under such contracts, if project revenue falls below an agreed ‘collar’, the government provides support. If revenue exceeds the ‘cap’, the project shares the excess with the government. The scheme provides underwriting for both renewable generation and energy storage, helping to fill grid reliability gaps as Australia phases out its ageing coal-fired power stations by 2030.
Analyst Jai Thomas, Energy Policy Western Australia’s Coordinator of Energy, comments: ‘It’s great to see the Western Australian government’s energy market arrangements delivering innovative projects like Neoen’s Muchea battery. The integration of new clean energy generation and battery storage projects is a crucial part of Western Australia’s energy transition and its journey to becoming a renewable energy powerhouse.’
The Collie and Muchea BESS projects will bring Neoen’s total storage capacity in Western Australia to 724 MW. The company has some 1.7 GW of storage capacity currently in operation or under construction in Australia, and 8.4 GW globally. It plans to install another 10 GW by 2030.
