Is Eku Energy the next major player in Australia’s battery market?

Eku Energy is shaking up the Australian energy storage market, with an exclusive focus on this complex and growing area. 

Established by Macquarie’s Green Investment Group (GIG), Eku has 3GWh of utility-scale storage projects already underway across UK, Japan, Taiwan and Australia. 

Daniel Burrows, Chief Investment Officer and Head of Asia Pacific, sees the company as a critical enabler in the energy transition, buying governments and networks more time to assess need, and deliver the process of electrification.

The rise of Eku Energy

Eku develops, builds and actively manages long-term energy storage assets. Its overriding goal is to accelerate the energy transition, delivering safe, clean and reliable energy on demand. 
Incubated over several years by Macquarie and launched in November 2022, the company has a strong focus on risk management and the provision of flexible, cost-effective solutions. 

It currently has three major projects underway in Australia.

• Commissioning Canberra’s big battery
  Eku is partnering with the ACT government to design, build and manage a 250MW mass-scale battery at Williamsdale. The $300-$400 million battery should be online by 2025, with the capacity to store enough energy to power one-third of Canberra homes for two hours during peak periods.
• Converting Hazelwood coal-fired power 
  In the coal-fired heart of Victoria’s Latrobe Valley, Eku Energy has partnered with Engie and Fluence to rework the decommissioned Hazelwood coal-fired power station as a 150MW lithium-ion battery. According to Burrows, it’s a great way to leverage existing infrastructure to support the energy transition.
• Boosting Melbourne’s electricity supply
  Eku Energy, via Macquarie’s GIG, is partnering with Shell Energy to deliver a 200MW utility-scale battery at the Rangebank Business Park in fast-growing Cranbourne. Expected to be operational by late 2024/early 2025, Rangebank BESS will have the capacity to power around 80,000 Victorian homes, with stored electricity discharged during peak demand.
  

How does Eku differ from its competitors?

Eku Energy is not the only developer, builder and operator of large-scale battery solutions. Neoen, for instance, also works across the power plant life cycle, providing solar, wind and energy storage capacity both in Australia and overseas.

But Eku is one of the only specialists in large-scale batteries, with an exclusive focus on energy storage. 

“Our partners understand our business model,” Burrows says. “As energy storage systems get larger and more complex, they appreciate our focus on simplicity, and delivering best value for the end energy user.”

Their strongly collaborative approach also marks Eku out as different, according to Burrows. 

“We partner with state and federal governments, retailers, developers and other key stakeholders, using a ground-up approach to projects and challenges. Our Macquarie heritage also means exceptional risk assessment, essential in today’s marketplace.”

How is Australia’s energy storage market shaping up?

Things have come a long way since 2017, when Elon Musk’s 100MW ‘big battery’ in South Australia – then the largest in the world – showed what large-scale energy storage could do. With batteries now storing larger volumes of energy, for longer, what are the implications for the market?

According to Bloomberg NEF, global storage capacity is set to reach a total of 411 gigawatts by the end of 2030. This is more than 15 times the storage capacity of 27GW online at the close of 2021. 

Australia is well-placed to meet this need and capitalise on advances in energy storage, with a $2.7 billion project pipeline now underway around the country. 

As ARENA reported in December 2022, eight grid-scale lithium-ion batteries of 200-300MW capacity are being developed around Australia, with a combined capacity of 2GW/4.2GW. 

Neoen, Origin, AGL, FRV, Risen and TagEnergy have all received ARENA grants to develop batteries. At least one battery will be built in every state connected to the NEM, as part of the drive to net zero 2050. 

Better contracting and warranty packages are reducing the cost of capital in Australia, Burrows says. 

“Post-Musk, warranties now extend from five up to ten, fifteen, even twenty years. This gives investors certainty of longer asset life.”

Australia is also very interesting from a global perspective, he adds. 

“With a high degree of distributed energy, greater deregulation, and a real sophistication around our financial products to manage risk, we are getting attention on a global scale.”